Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET New York Fed Services Business Activity, Retail Sales, Import Price Index, Export
Price Index; 10:00ET Business Inventories, NAHB Housing Market Index; 2:45ET Fed’s Adriana Kugler speaks

*US JUNE RETAIL SALES UNCHANGED M/M; EST. -0.3%

HIGHLIGHTS and News:  

• SECRET SERVICE TO BRIEF HOUSE OVERSIGHT PANEL TODAY
• Over a dozen tornado warnings were issued last night across northern Illinois, including downtown Chicago, with as many as ten tornadoes on the ground at the same time
  
• Biden urged Congress to pass a form of national rent control
• Trump will quickly demand peace talks between Russia and Ukraine if he wins the presidential election, Hungary’s Viktor Orbán claimed

Global shares dipped as investors mull over what Donald Trump’s victory would mean for the rest of the world. The MSCI All-World index inched lower but remained in
sight of record highs. Expectations are that US interest rates will fall, keeping investors bullish, although geopolitics pose the biggest risk to that scenario, the Bank of America’s global fund manager survey showed. Global growth expectations dropped by
the most month-on-month since March 2022, with this metric falling to -27% from -6%, the survey showed.         

EQUITIES:
The S&P 500 index made an intraday high for 9-straght days 

US equity futures are higher with small caps outperforming as traders await US retail sales data for fresh insights on whether inflation and growth have cooled enough to satisfy policymakers
who are weighing when it’s safe to begin bringing down interest rates. Results from Morgan Stanley and Bank of America will also influence the mood in markets today after fellow banking giant Goldman Sachs Group reported a surge in earnings Monday. Bank of
America rose pre-market after it beat on net interest income and equity trading revenue. Fund managers’ ownership of the “Magnificent Seven” stocks is the most crowded trade “by a country mile”, according to BofA’s global fund manager survey.

Futures ahead of the DATA: E-Mini S&P +0.15%, Nasdaq +0.25%, Russell 2000 +0.9%, DJI +0.2%

In pre-market trading, Bank of America (BAC) rises 2.4% after the lender said it sees fourth-quarter net interest income on a fully taxable-equivalent basis of about $14.5 billion, ahead
of analyst estimates. Chegg (CHGG) gains 7% as Morgan Stanley raises the stock to equal-weight. Match Group (MTCH) jumps 9% after Starboard Value built a stake in the dating-app company. Trump Media (DJT) falls 9.6% after the owner of Truth Social registered
38 million shares that could be sold as part of a pact with Yorkville Advisors. Verizon Communications (VZ) ticks 0.3% higher as the carrier explores selling thousands of mobile-phone towers across the country.

European gauges fell, driven lower by a handful of earnings misses and the prospect of intensifying trade tensions with the United States under a second Trump administration. The Stoxx
Europe 600 index slipped as the impact of China’s slowing economy was on full display as earnings continued to trickle out. Hugo Boss slumped as much as 10% after the German fashion retailer cut its profit guidance, citing weakness in key markets such as China
and the UK. Another luxury brand Richemont posted solid sales but shares slid after it said demand had plunged in China. UK grocery price inflation fell to its lowest level since September 2021. Miners were the worst-performing industry group, as Rio Tinto
Group declined after giving disappointing guidance on its copper operations. Stoxx 600 -0.5%, DAX -0.5%, CAC -0.8%, FTSE 100 -0.5%. Basic Resources -1.9%, Insurance -1.4%, Autos -1.3%. Construction is the only sector in the green and is up only 0.02%.

Asian equities were mixed following a slew of political and economic news from the US. Investors will also look for developments from China’s Third Plenum, where high local government
debt levels and a push for advanced manufacturing will be on the agenda. Shares in mainland China climbed while stocks in Hong Kong declined the most in the region. Some stocks in China remained lower after Trump’s selection of JD Vance as his running mate
triggered further trade and geopolitical concerns in the region. New tariffs of 60% on all Chinese exports to the US would more than halve China’s annual growth rate, according to UBS Group. India’s Nifty 50 hit an all-time high as the country is set to present
its union budget for financial year 2025 next week. CSI 300 +0.6%, Taiwan +0.5%, Topix +0.3%, Kospi +0.2%, Vietnam +0.1%, Sensex +0.5%. Hang Seng Index -1.6%, Indonesia -0.7%, Thailand -0.5%, Philippines -0.3%, ASX 200 -0.2%.

FIXED INCOME: 
 

Treasuries rose, with the 10-year benchmark yield trading near the lowest since March, as traders put their faith in the Federal Reserve to begin an easing cycle
in September. Markets have now fully priced in a quarter-point rate cut from the Fed in September, with a total easing of 68 basis points expected by the end of the year. The curve flatter as Monday’s aggressive steepening move is slightly unwound. Similar
gains seen across European rates as traders price in two quarter-point rate Bank of England cuts this year, following UK grocery price inflation data. Treasury yields richer on the day by up to 5bp across long-end of the curve with 2s10s spread flattening
by 1.5bp; 10-year yields around 4.175%.

METALS: 

Gold rose, nearing a record high as traders increasingly bet on three Fed rate cuts this year. Comments from Fed Chair Jerome Powell bolstered the case for a September
rate cut, while investors awaited more US economic data for further monetary policy cues. Traders have been adding bets there will be three cuts this year after Goldman Sachs said conditions were ripe for easing, with “a solid rationale” for officials to lower
rates as soon as July. Spot gold +0.8%, silver +0.5%.

ENERGY:   

Oil prices dropped sharply, driven by concern that a slowing Chinese economy could dent energy demand. Anticipation for stronger stimulus measures at the Third Plenum
may face the risk of disappointment, according to IG strategists. Some analysts cautioned about being overly bullish as expected weakness in some macroeconomic data from the US could still indirectly hurt oil demand in the near term. WTI -1.8%, Brent -1.6%,
US Nat Gas +1.3%, RBOB -1.7%.

CURRENCIES:   

In currency markets, the yen slid against a slightly firmer dollar, prompting more warnings from Japanese officials that the government stands ready to take all possible
measures to counter excessively volatile currency moves. The yen declined against the greenback on wagers that the Japanese currency will remain weak during a second Trump term. The dollar is gaining on growing speculation that Donald Trump may win the US
presidential election, even as expectations for a Fed interest rate cut grow. FX strategists at ING Bank NV suggest that while the US macro picture and dovish Fed expectations argue against major USD rallies, the potential for markets to price in a Trump reelection
effect could tilt risks towards the upside for the greenback in the near term. US$ Index +0.05%, GBPUSD ~flat, EURUSD +0.05%, USDJPY +0.2%, AUDUSD -0.25%, NZDUSD -0.1%, USDCHF -0.05%.

Spot Bitcoin is ~flat, Ethereum -0.6%.

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
• Alpha Cognition (ACOG CN) Raised to Outperform at Raymond James; PT C$2
• Buenaventura (BUENAVC1 PE) ADRs Raised to Buy at Kallpa Securities; PT $20.20
• Chegg (CHGG) Raised to Equal-Weight at Morgan Stanley; PT $3.25
• Cooper Cos (COO) Raised to Buy at Jefferies; PT $115
• Datadog (DDOG) Raised to Outperform at Mizuho Securities; PT $155
• Epam Systems (EPAM) Raised to Buy at Jefferies
• European Residential REIT (ERE-U CN) Raised to Outperform at Raymond James
• Profound Medical (PRN CN) Raised to Buy at Stifel; PT C$16.40
• Shopify (SHOP CN) Raised to Buy at BofA
• Sweetgreen (SG) Raised to Equal-Weight at Morgan Stanley; PT $25
• Downgrades
• Corus Entertainment (CJR/B CN) Cut to Sell at TD Cowen; PT 5 Canadian cents
• Dollar Tree (DLTR) Cut to Neutral at Piper Sandler; PT $112
• GrafTech (EAF) Cut to Underweight at JPMorgan
• JPMorgan (JPM) Cut to Accumulate at Phillip Secs; PT $231.19
• Palantir (PLTR) Cut to Underperform at Mizuho Securities; PT $22
• Reddit (RDDT) Cut to Hold at Loop Capital; PT $75
• Starbucks (SBUX) Cut to Inline at Evercore ISI
• Stelco Holdings (STLC CN) Cut to Hold at Stifel Canada; PT C$70
• Yum (YUM) Cut to Inline at Evercore ISI
• Zscaler (ZS) Cut to Neutral at Mizuho Securities; PT $220
• Initiations
• Alphabet (GOOGL) Reinstated Outperform at Wolfe; PT $240
• Amazon (AMZN) Rated New Outperform at Wolfe; PT $250
• American Express (AXP) Rated New Neutral at Compass Point; PT $260
• Bread Financial Holdings (BFH) Rated New Buy at Compass Point; PT $54
• Bumble (BMBL) Reinstated Outperform at Wolfe; PT $14
• Chewy (CHWY) Reinstated Peerperform at Wolfe
• Cloudflare (NET) Rated New Peerperform at Wolfe
• Didi Global (DIDI) ADRs Rated New Buy at 86Research; PT $6
• DoorDash (DASH) Reinstated Outperform at Wolfe; PT $130
• Duolingo (DUOL) Reinstated Peerperform at Wolfe
• EBay (EBAY) Reinstated Peerperform at Wolfe
• Etsy (ETSY) Rated New Peerperform at Wolfe
• GeoVax Labs (GOVX) Rated New Buy at Roth MKM; PT $20
• Instacart (CART) Rated New Peerperform at Wolfe
• Integer (ITGR) Rated New Outperform at Oppenheimer; PT $135
• Kingstone Cos (KINS) Rated New Buy at Janney Montgomery; PT $6.50
• Lamar (LAMR) Rated New Buy at TD Cowen; PT $135
• Lyft (LYFT) Rated New Peerperform at Wolfe
• Magnite Inc (MGNI) Rated New Outperform at Wolfe; PT $16
• Match Group (MTCH) Reinstated Outperform at Wolfe; PT $36
• Meta Platforms (META) Rated New Outperform at Wolfe; PT $620
• Option Care Health (OPCH) Rated New Market Outperform at JMP; PT $36
• Outfront Media (OUT) Rated New Hold at TD Cowen; PT $16
• Peloton (PTON) Rated New Peerperform at Wolfe
• Pinterest (PINS) Rated New Peerperform at Wolfe
• Progyny (PGNY) Rated New Market Outperform at JMP; PT $36
• PubMatic (PUBM) Rated New Outperform at Wolfe; PT $25
• Shopify (SHOP CN) Reinstated Outperform at Wolfe; PT C$109.34
• Simulations Plus (SLP) Rated New Market Perform at JMP
• Snap (SNAP) Rated New Peerperform at Wolfe
• Synchrony Financial (SYF) Reinstated Buy at Compass Point; PT $56
• Uber (UBER) Rated New Outperform at Wolfe; PT $90
• Yelp (YELP) Rated New Peerperform at Wolfe

Data sources: Bloomberg, Reuters, CQG