Daily Game Plan

TODAY’S GAME PLAN:  from the trading
desk, this is not research

TODAY’S ECONOMIC DATA:  8:30ET Fed’s Goolsbee on CNBC; 10:30ET Dallas Fed Manf. Activity; 2:00ET Fed’s Daly speaks

HIGHLIGHTS and News:  

• The Justice Department is considering whether to bring criminal charges against Boeing
• Israel will soon end major operations in Gaza and redeploy forces to northern Israel where fighting with Hezbollah has escalated
• Trump said he’s chosen his running mate, and his pick is expected to attend Thursday’s debate
• Meta held talks with Apple about integrating its generative AI model into Apple Intelligence: WSJ
• The Edmonton Oilers have a chance to become only the second team in NHL history to overcome a 3-0 series deficit to win the Stanley Cup

Global shares steadied, after two days of losses, as investors look ahead to US price data that is expected to show a renewed moderation in inflation. Friday will
bring inflation data from the euro area as well as the Federal Reserve’s preferred gauge of consumer costs, the PCE deflator. Geopolitics are also among top concerns with the first US presidential debate due Thursday, presidential elections in Iran this Friday
and the first round of voting in the French election this weekend. France’s far-right National Rally party and its allies were seen leading the first round of the country’s elections with 35.5% of the vote, according to a poll published on Sunday. Minutes
of the BOJ’s last policy meeting out today showed there was much discussion about tapering its bond buying and raising rates. In other news, China has agreed to enter talks with the EU over its decision to impose higher tariffs on imports of Chinese electric
vehicles.

EQUITIES:

US equity futures are muted as traders awaited the Fed’s key inflation gauges due at the end of this week, which are expected to show mild advances and provide more reason for the central
bank to begin cutting interest rates. Boeing Co (BA) risks potential criminal charges as US prosecutors reportedly recommend legal action against the aerospace giant, after the company allegedly breached a 2021 deferred prosecution agreement following two
fatal 737 MAX crashes. The Justice Department has until July 7 to decide on prosecuting Boeing, which could result in huge penalties. The NYT reported it could offer a second settlement. Apple was hit with a fresh EU warning over allegedly illegal practices
on the App Store that may lead to more fines.

Futures ahead of the bell: E-Mini S&P ~flat, Nasdaq -0.2%, Russell 2000 +0.2%, DJI +0.2%.

In pre-market trading, Broadcom (AVGO) rose as much as 1.4% after Reuters reported the semiconductor device maker is working with ByteDance on developing an advanced AI processor, while
Micron Technology rose ahead of its earnings report due Wednesday. Cryptocurrency-linked companies fell as Bitcoin extended losses amid cooling demand for the largest digital asset’s exchange-traded funds and uncertainty over monetary policy. Nvidia (NVDA
US) shares fell 2.0%, with the stock set to extend losses for a third consecutive session, after already erasing over $220 billion in market capitalization. RXO (RXO US) jumps 11% after agreeing to buy UPS’s asset-light freight brokerage business Coyote Logistics
for more than $1 billion in a deal that adds scale, according to analysts. Alnylam Pharmaceuticals’ (ALNY) soars 36% after the company said its heart drug vutrisiran succeeded in a late-stage trial. Altimmune (ALT) rises 11% after the drug developer presented
data from a mid-stage trial of its experimental obesity drug. ResMed (RMD) sinks 11% as Citi downgrades the breathing-machine maker following additional clinical data from Eli Lilly that showed its weight-loss drug tirzepatide reduced the severity of obstructive
sleep apnea.

Tech Software Sector ETF relative to the S&P 500 at top of descending trend channel.

European gauges move higher, led by autos after news Beijing has suggested Germany’s luxury car manufacturers could benefit if Berlin convinces the European Union to drop tariffs on Chinese
electric vehicle exports. Markets are heading into a period filled with political risks, with the first voting round of the French parliamentary election on Sunday and polls showing gains for the far-right National Rally. In Paris, Eurofins Scientific SE dropped
as much as 24% after Muddy Waters Capital LLC disclosed a short position in the laboratory services firm. Prudential shares jumped over 6% after the UK insurer announced a $2 billion buyback. On the economic front, Germany’s business outlook unexpectedly declined
for the first time in five months. Stoxx 600 +0.5%, DAX +0.6%, CAC +0.9%, FTSE 100 +0.5%. Autos +2.1%, Banks +1.6%, Chemicals +1.3%, Telecomm +1%. Retail -0.4%, Technology -0.03%.  

Asian stocks fell, led by declines in tech shares, as risk-off sentiment prevailed ahead of key US inflation data this week.  The MSCI Asia Pacific Index dropped 0.2%, slipping for a
third session. TSMC and SK Hynix were among the biggest drags. Benchmarks in Taiwan and mainland China dropped the most, while Japanese stocks bucked the region’s slump as the yen’s recent decline supported exporters. Shanghai-listed stocks erased its year-to-date
gains, as a weak macro picture continues to weigh on investor sentiment. Chinese EV stocks were mixed ahead of tariff talks with the European Union. Vietnam -2.2%, Taiwan -1.9%, Shanghai Composite -1.2%, ASX 200 -0.8%, Kospi -0.7%, CSI 300 -0.5%, Hang Seng
Index was flat. Sensex +0.2%, Topix +0.6%, Philippines +1.8%.

FIXED INCOME: 
 

Treasury yields edge higher and remain within about a basis point of Friday’s closing levels at the start of a week that includes PCE deflator data, Treasury auctions
and the first US presidential debate. US 10-year is around 4.27% while curve spreads are also within a basis point of Friday’s close. Treasury coupon issuance resumes Tuesday with $69 billion 2-year note offering, followed by $70 billion 5-year and $44 billion
7-year Wednesday and Thursday. 

METALS: 

Gold inched up, erasing some of Friday’s losses as the dollar weakened. Attention now turns to economic data due at the end of this week, including inflation figures
from the euro area and the Federal Reserve’s preferred gauge of consumer costs, the PCE deflator. Spot gold +0.2%, silver +0.2%.

ENERGY:   

Oil prices firmed slightly as traders weighed support from expected summer demand and geopolitical tensions with escalating attacks on ships near Yemen. A ramp-up
in Ukrainian drone attacks on Russian refineries are also underpinning oil prices. In Ecuador, state oil company Petroecuador has declared force majeure on deliveries of Napo heavy crude for export after the shutdown of a key pipeline and oil wells owing to
heavy rain, sources said on Friday. WTI +0.4%, Brent +0.4%, US Nat Gas +0.3%, RBOB -0.05%.

CURRENCIES:   

In currency markets, the dollar is slightly weaker but remained close to an almost eight-week high, while the yen languished near the 160 level, drawing verbal warnings
from Japanese authorities as intervention fears grip markets. Japan’s top currency official was out early to voice disapproval with the yen’s latest drop which saw the dollar near 160 versus the yen. Masato Kanda said authorities are ready to intervene to
support it 24 hours a day, if needed. Demand for carry trades has also seen both the Australian and New Zealand dollars reach 17-year peaks on the yen. US$ Index -0.2%, GBPUSD +0.15%, EURUSD +0.35%, USDJPY -0.1%, AUDUSD +0.1%, NZDUSD +0.05%, USDCHF -0.1%.

Spot Bitcoin -4%, Ethereum -3.4%. Bitcoin extended its drop, hurt by a six-day streak of outflows from US ETFs for the token.

TECHNICAL LEVELS:  

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

• Upgrades
• Carrier Global (CARR) Raised to Buy at Citi; PT $74
• Cinemark (CNK) Raised to Buy at Roth MKM; PT $26
• Digimarc (DMRC) Raised to Buy at Needham; PT $40
• Planet Fitness (PLNT) Raised to Buy at TD Cowen; PT $92
• Sirius XM (SIRI) Raised to Inline at Evercore ISI; PT $3.25
• Solid Biosciences (SLDB) Raised to Outperform at Leerink; PT $12
• Synovus (SNV) Raised to Overweight at Barclays; PT $46
• Downgrades
• Comcast (CMCSA) Cut to Neutral at Seaport Global Securities
• Liberty SiriusXM (LSXMA) Cut to Inline at Evercore ISI; PT $27
• Sharecare (SHCR) Cut to Hold at Nephron Research; PT $1.43
• Werner Enterprises (WERN) Cut to Negative at Susquehanna; PT $27
• Initiations
• Accenture (ACN) Rated New Neutral at Goldman; PT $335
• Agilysys (AGYS) Rated New Outperform at William Blair
• Ally Financial (ALLY) Reinstated Buy at Citi; PT $50
• Bridger Aerospace Group (BAER) Rated New Buy at Canaccord; PT $5.50
• Celsius Holdings (CELH) Rated New Outperform at BNPP Exane; PT $87
• Church & Dwight (CHD) Rated New Neutral at BNPP Exane; PT $114
• Clorox (CLX) Rated New Underperform at BNPP Exane; PT $130
• Coca-Cola (KO) Rated New Outperform at BNPP Exane; PT $72
• Cognizant (CTSH) Rated New Neutral at Goldman; PT $72
• Colgate-Palmolive (CL) Reinstated Outperform at BNPP Exane; PT $109
• Elevance (ELV) Reinstated Overweight at Morgan Stanley; PT $643
• Envoy Medical (COCH) Rated New Buy at Ascendiant Capital Markets
• Epam Systems (EPAM) Rated New Neutral at Goldman; PT $200
• GE Vernova (GEV) Rated New Outperform at Haitong Intl; PT $211.83
• Geely Auto (175 HK) Zeekr Intelligent Technology Holding ADRs Rated New Buy at Citi
• Globant (GLOB) Rated New Buy at Goldman; PT $200
• Humana (HUM) Rated New Equal-Weight at Morgan Stanley; PT $374
• IBM (IBM) Rated New Buy at Goldman; PT $200
• IperionX (IPX AU) ADRs Rated New Buy at ThinkEquity; PT $20
• Keurig Dr Pepper (KDP) Rated New Neutral at BNPP Exane; PT $36
• Kimberly-Clark (KMB) Reinstated Neutral at BNPP Exane; PT $146
• Monster Beverage (MNST) Rated New Underperform at BNPP Exane; PT $48
• P&G (PG) Reinstated Outperform at BNPP Exane; PT $187
• PepsiCo (PEP) Rated New Neutral at BNPP Exane; PT $174
• Praxis Precision (PRAX) Rated New Buy at Needham; PT $145
• Ryder (R) Rated New Overweight at Morgan Stanley; PT $165
• Softchoice (SFTC CN) Rated New Neutral at Goldman
• Sunrun (RUN) Rated New Outperform at Haitong Intl; PT $19.49
• TaskUS (TASK) Rated New Sell at Goldman; PT $12
• Thoughtworks (TWKS) Rated New Sell at Goldman; PT $2.50

Data sources: Bloomberg, Reuters, CQG