Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:00ET FHFA House Price Index,
S&P CoreLogic home prices; 10:00ET JOLTS Job Openings, Consumer Confidence; 10:30ET Dallas Fed Services Activity

HIGHLIGHTS and News:  

• Tesla recall issued amid crash risk for 1.8 million cars
• Venezuela’s Opposition Says It Has Proof of Election Fraud  
• The US won bronze in men’s team gymnastics, ending a 16-year medal drought
• The Seine remains unsafe for swimming and the men’s triathlon was postponed until tomorrow

Global stock markets traded cautiously ahead of central bank meetings and a slew of major corporate earnings reports. The MSCI All-World index, which is heading for
a third straight monthly gain, was flat. Euro-area GDP rose 0.3%, more than expected in the second-quarter despite a surprise contraction in Germany. Both France and Spain beat estimates and Italy kept growing, offsetting a 0.1% drop in Germany. A separate
report in Spain showed inflation there weakened much more than expected to 2.9% in July. Ireland showed the strongest growth in the region with GDP rising 1.2%. Focus will now turn to monetary policy decisions from the Bank of Japan and the US Federal Reserve
on Wednesday, followed by the Bank of England on Thursday.     

EQUITIES:  

US equity futures are moderately higher as traders prepared for a raft of economic data releases, US tech earnings and central bank decisions that will be critical in shaping the trajectory
of market. The Dow is slightly lower after earnings from MRK and PG weighed. The Fed is set to begin its two-day policy meeting later in the day, with investors anticipating a rate cut as early as September.  Meanwhile, investors will be watching whether big
tech megacaps can reap returns from spending on artificial intelligence after an underwhelming start to the reporting season. Microsoft and chipmaker AMD are due to publish earnings after the close.  

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.3%, Russell 2000 +0.1%, DJI -0.1%

In pre-market trading, CrowdStrike (CRWD) slips 4% after a CNBC report about Delta Air Lines hiring attorney David Boies to seek potential damages from the cyber security company and
Microsoft following the widespread outage earlier this month. Amkor Technology (AMKR) falls 6% after the chip-packaging company provided a disappointing 3Q forecast. Beyond Inc. (BYON) climbs 7% as the household products retailer reported a smaller-than-expected
adjusted loss per share for the 2Q. F5 (FFIV) jumps 13% after the communications equipment company raised its full-year revenue guidance. Howmet Aerospace (HWM) rises 7% after the company boosted its adjusted earnings per share guidance for the full year.
JetBlue Airways (JBLU) gains 4% after saying it will cut $3 billion in capital spending through 2029. Lattice Semiconductor (LSCC) falls 15% after the chipmaker forecast revenue for the 3Q that came in below estimates. Novavax (NVAX) slides 8% after JPMorgan
downgraded the vaccine maker. PayPal (PYPL) rises 4% after boosting its forecast for 2024 profit. Rambus (RMBS) slumps 6% after the technology company forecast product revenue for the 3Q below estimates. Sprouts Farmers Market (SFM) jumps 17% after the natural
and organic food retailer boosted its full-year projections for comparable sales and profit. Symbotic (SYM) drops 19% after the warehouse robotics and automation firm forecast revenue for the 4Q that came in below estimates.
Shares in Procter & Gamble fell over 4% as second quarter organic sales growth fell short of market expectations. Merck’s (MRK) stock drops 2.5% as mixed outlook offsets earnings
beat.

European gauges are mostly higher after data showed the euro-area economy grew more than expected in the second quarter. The Stoxx 600 is near the highs of the day, led by gains in technology
shares. The FTSE 100 underperforms as material names weigh on the broader market. Among individual stocks, spirits maker Diageo (DGE.L), was the biggest weight on the STOXX 600 index, falling as much as 10% after it reported a 4.8% decline in annual profit.
Basic resources fell more than 1% as base metals prices slipped due to slowing global growth momentum and risk-off sentiment, with aluminum and zinc hitting three-month lows. BP gained as much as 2% after the oil giant reported an earnings beat, while increasing
its dividend and extending its share repurchasing program. Standard Chartered (STAN.L) jumped 5.7% after the bank announced its largest share buyback of $1.5 billion and raised its annual earnings forecast. St James’s Place soared 25% as the British wealth
manager said it plans to cut tens of millions of pounds of costs. Stoxx 600 +0.4%, DAX +0.4%, CAC +0.4%, FTSE 100 -0.15%. Technology +0.9%, Insurance +0.9%, Banks +0.85%, Construction +0.8%. Basic Resources -1.5%, Food & Bev -0.5%.

Shares in Asia fell as investors trimmed holdings before a number of key central bank decisions in coming days. Chinese shares extended recent losses amid weak sentiment despite the nation’s
top leaders signaling more economic support. China’s ruling Communist Party pledged to make boosting consumer spending a greater policy focus, as weak domestic demand threatens the nation’s annual growth target despite an export boom. The MSCI Asia Pacific
index dropped 0.5% and is heading for its first monthly drop since April. Shares in Hong Kong led losses while Japanese benchmarks were mixed. Hang Seng Index -1.4%, Kospi -1%, Indonesia -0.6%, CSI 300 -0.6%, ASX 200 –0.5%, Topix -0.2%, Vietnam -0.1%. Sensex
+0.1%, Nikkei 225 +0.15%, Taiwan +0.3%.

FIXED INCOME: 
 

Treasuries hold small gains ahead of JOLTS job openings data that are anticipated to show a decline after an unexpected rebound in May. The US session also includes
July consumer confidence gauge. This week’s main events begin Wednesday, which include Treasury’s quarterly refunding announcement and a Fed policy decision that some expect to lay the groundwork for a September interest-rate cut.  Swap traders are currently pricing a
full cut for the September-meeting and as much as two further reductions before the end of the year. Yields are lower by less than 1bp with curve spreads little changed. 

METALS: 

Gold is slightly higher as investors anticipate the Federal Reserve’s commentary on monetary policy and upcoming US economic data. The Federal Reserve is expected
to maintain current interest rates at the conclusion of its two-day meeting on Wednesday. However, the central bank may signal potential policy easing as early as September, citing inflation approaching its 2% target. Spot gold +0.1%, silver -0.2%.

ENERGY:   

Oil prices extend the recent decline to its lowest levels since early June, unable to shake off recent weakness tied to concerns about the outlook for demand from
China, the world’s largest crude importer. China’s sluggish economy is overshadowing escalating tensions in the Middle East. Some support could come from the latest US inventory reports due this week, which are expected to show lower crude and fuel stocks.
Meanwhile, Israel is expected to retaliate against the Iran-backed militia Hezbollah, after a rocket fired from Lebanon killed 12 children. WTI -0.6%, Brent -0.8%, US Nat Gas -1.8%, RBOB -0.8%.

CURRENCIES:   

In currency markets, the Japanese yen fell for a second day, briefly going beyond 155 per dollar for the first time in a week as the Bank of Japan kicked off a two-day
policy meeting. The possibility that the BOJ will announce some policy normalization has prompted an unwind of short positions.  JPMorgan estimates that around 40% of the overall Group-of-10 currency carry trade buildup has been unwound in recent weeks, according
to its analysis of CFTC and DTCC option data. “There still remains a solid stock of Yen shorts left to rinse,” they added. The euro inched higher, showing little reaction to a flurry of data from the bloc. US$ Index +0.05%, GBPUSD -0.1%, EURUSD +0.05%, USDJPY
+0.55%, AUDUSD -0.2%, USDNOK -0.25%, USDSEK -0.3%.

Spot Bitcoin -1%, Spot Ethereum +0.4%.

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
• Affirm Holdings (AFRM) Raised to Buy at BofA
• Aon PLC (AON) Raised to Outperform at KBW; PT $380
• BrightView (BV) Raised to Outperform at Baird; PT $17
• Collegium (COLL) Raised to Buy at HC Wainwright; PT $47
• Sprouts Farmers (SFM) Raised to Equal-Weight at Wells Fargo; PT $90
• Raised to Market Perform at BMO; PT $102
• Varonis Systems (VRNS) Raised to Outperform at Baird; PT $60
• Downgrades
• Abbott (ABT) Cut to Hold at Edward Jones
• Bank of Montreal (BMO CN) Cut to Sector Perform at RBC; PT C$118
• Cognition Therapeutics (CGTX) Cut to Neutral at Cantor
• Criteo (CRTO) ADRs Cut to Sector Weight at KeyBanc
• Filo Corp (FIL CN) Cut to Sector Perform at Scotiabank; PT C$33
• Flushing Financial (FFIC) Cut to Neutral at Piper Sandler; PT $16.50
• Frontier Airlines (ULCC) Cut to Underweight at JPMorgan
• Gentex (GNTX) Cut to Neutral at BNPP Exane; PT $34
• Healthcare Realty Trust (HR) Cut to Underweight at Wells Fargo
• Integra LifeSciences (IART) Cut to Sell at Citi; PT $23
• Cut to Sell at BTIG; PT $22
• Merchants (MBIN) Cut to Outperform at Raymond James
• Novavax (NVAX) Cut to Underweight at JPMorgan; PT $8
• Olin (OLN) Cut to Neutral at BofA; PT $51
• Sage Therapeutics (SAGE) Cut to Hold at TD Cowen; PT $10
• Shore Bancshares (SHBI) Cut to Neutral at Janney Montgomery; PT $15.50
• Silicom (SILC) Cut to Hold at Needham
• Williams Cos (WMB) Cut to Neutral at Seaport Global Securities
• Initiations
• Adaptimmune (ADAP) ADRs Rated New Buy at HC Wainwright; PT $4
• BrightView (BV) Rated New Buy at Loop Capital; PT $18
• Corbus Pharmaceuticals (CRBP) Rated New Outperform at Wedbush; PT $85
• Corebridge Financial (CRBG) Rated New Market Perform at Raymond James
• CyberArk (CYBR) Rated New Buy at Citic Securities; PT $325
• Gryphon Digital Mining (GRYP) Rated New Neutral at HC Wainwright
• Ligand Pharma (LGND) Rated New Outperform at RBC; PT $130
• Movano (MOVE) Rated New Speculative Buy at Benchmark; PT $2
• Northview Residential REIT (NRR-U CN) Rated New Sector Perform at National Bank; PT C$18.50
• Repare Therapeutics (RPTX) Rated New Outperform at LifeSci Capital
• Rubellite Energy (RBY CN) Rated New Outperform at ATB Capital; PT C$3.75
• Xtract One Technologies (XTRA CN) Rated New Buy at Eight Capital

Data sources: Bloomberg, Reuters, CQG