Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET ADP Employment Change; 8:30ET Employment Cost Index; 9:45ET MNI Chicago PMI; 10:00ET
Pending Home Sales; 2:00ET FOMC Rate Decision; 2:30ET Fed Chair Powell’s Press Conference*

HIGHLIGHTS and News:  

• Trump in Chicago Today Speaking At National Association Of Black Journalists Convention
• Hamas leader Ismail Haniyeh killed in Iran, stoking fears of wider Middle East war
  
• IRAN: US ALSO BEARS RESPONSIBILITY FOR HANIYEH’S KILLING
• The BOJ raised its key rate to around 0.25%
  
• 18 gold medals are up for grabs today, with Simone Biles competing in four individual event finals
• Covid seems to be ripping through the aquatics center, forcing Olympians to mask up

World equities gained in an action-packed Wednesday where central banks dominated investor attention. Investors were also assessing contrasting results from Microsoft
and chipmaker AMD that suggested a divide in the AI landscape. The Biden administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers.
But shipments from allies including Japan, the Netherlands and South Korea will be excluded, limiting the impact of the rule. Places whose exports would be affected include Israel, Taiwan, Singapore and Malaysia. Meanwhile, Hamas leader Ismail Haniyeh was
assassinated early on Wednesday morning in Iran, the Palestinian militant group and Tehran said, drawing threats of revenge on Israel.  The United States on Tuesday carried out a strike in Iraq that US officials described as self-defense, as regional tensions
rose after an Israeli airstrike in Beirut that Israel said killed Hezbollah’s most senior commander.     

EQUITIES:  

US equity futures are higher with Nasdaq futures outperforming overnight after a bullish forecast from Advanced Micro Devices bolstered struggling chip stocks. AMD gave an upbeat revenue
forecast for the current quarter, signaling that its new artificial intelligence processors are helping bolster growth.  Chip stocks such as AI favorite Nvidia, Intel, Marvell Technology, Qualcomm, Broadcom and Arm Holdings jumped between 2% and 5%.  Microsoft
is down 2.6% after tumbling over 8% post-market after saying it plans to spend more this fiscal year to build its AI infrastructure, even as growth in its cloud business slowed. Meta Platforms (META) is expected to report a 20% rise in quarterly revenue, helped
by strong ad sales driven by the Olympics and elections in several countries, but investors will want to see if its spending on AI is starting to yield returns. Focus turns to a much anticipated monetary policy decision from the Federal Reserve later in the
day, where it is expected to hold rates steady and open the door for a September rate cut.

Futures ahead of the bell: E-Mini S&P +1.1%, Nasdaq +2%, Russell 2000 +0.5%, DJI +0.2%

In pre-market trading, AMD soared 9% after it increased its 2024 forecast for artificial-intelligence-chip sales. Microsoft shares fell (MSFT now down 2%) as cloud revenue missed, and
the company warned Azure growth will continue to slow. Nvidia (NVDA) surged ~7% after it was renamed the top chip stock pick by Morgan Stanley for the first time in six months. Starbucks (SBUX) rose 3% after reaffirming its full-year guidance. Pinterest (PINS)
plunged 11% as its third-quarter revenue outlook missed. BorgWarner (BWA) climbs 3% after posting 2Q profit that beat the average analyst estimate. Dupont de Nemours (DD) gains 4% after 2Q profit exceeded investor expectations as AI-driven demand for semiconductors
drove gains in its electronics business. Groupon (GRPN) slides 17% after the online coupon company lowered its adjusted Ebitda forecast for the year. Humana (HUM) falls 8% after cutting its year profit forecast. Match Group (MTCH) jumps 10% after the dating-app
company said it plans to cut 6% of its global staff as it shuts down livestreaming services across some of its dating apps. O-I Glass (OI) drops 16% after the producer of glass bottles cut its yearly profit forecast.  T-Mobile (TMUS) rises 2% after posting
2Q postpaid net customers that beat analyst estimates.

S&P 500 Growth has underperformed Value by nearly 12% since July 10.

European gauges followed Asian indexes higher ahead of central bank meetings in the US and Britain, with gains led by a rally in semiconductor stocks. Euro-area inflation unexpectedly
quickened, with consumer prices rising 2.6% y-o-y in July, an outcome that may make the European Central Bank more cautious about cutting interest rates further. Core inflation held at 2.9% for a third month. The Euro Stoxx 600 is up ~1% with technology shares
leading gains, while the bank sector underperforms. ASML surged as much as 11%, leading a rally in European technology shares after reports the Biden administration planned to exempt chip-equipment makers in Japan, the Netherlands and South Korea from upcoming
export restrictions. Second-quarter earnings releases also helped sentiment, with Airbus SE gaining as much as 7.2% after the airplane manufacturer’s second-quarter results topped expectations.  Switzerland is halted because of exchange issues. Stoxx 600 +0.8%,
DAX +0.5%, CAC +1.1%, FTSE 100 +1.2%.  Technology +2.6%, Energy +2.4%, Basic Resources +2.2%. Banks -1%, Telecomm -0.3%.

Shares in Asia advanced as Chinese shares recouped some of their recent losses, while Japanese gauges erased earlier declines after the Bank of Japan raised interest rates. The MSCI Asia
Pacific Index rose 2.1%, boosted by gains in semiconductor shares after a report the US planned to exempt chip-equipment makers in some US allies from export restrictions. Today’s move helped the regional benchmark score its third-straight monthly advance.
Mainland China and Hong Kong climbed about 2%, with the CSI 300 Index capping its best day since February. Australian stocks rose after the nation’s core inflation unexpectedly decelerated last quarter, supporting the case for central bank easing. China’s
CSI Real Estate Index +5.1%, CSI 1000 +4%, CSI 300 +2.2%, Hang Seng Index +2%, ASX 2– +1.75%, Nikkei 225 +1.5%, Kospi +1.2%, Vietnam +0.5%, Singapore +0.4%, Sensex +0.35%. Taiwan -0.1%.

FIXED INCOME: 
 

Treasuries marginally richer across the curve, maintaining yields within 1bp of Tuesday’s close, amid outperformance by European bonds. Gilts lead gains in European
government debt ahead of the Bank of England decision on Thursday. Bunds are off the highs after euro-area inflation unexpectedly accelerated in July. US 10-year yields around 4.13%, 2-year yield ~4.35%, curves a tad steeper. Ahead of Fed policy announcement
at 2pm EST, Fed-dated OIS fully prices in a 25bp rate cut for September and roughly 66bp of easing by the end of the year. Fed Chair Powell may signal a view on a September cut in comments about the July meeting. Treasury will project auction sizes in 8:30ET.

METALS: 

Gold advanced as tensions in the Middle East spiked and the Bank of Japan kicked off a flurry of central-bank meetings by raising interest rates, with a Federal Reserve
decision due later in the day. Bullion is building on a 1.1% gain in the previous session, after Hamas blamed Israel for killing its political leader. The attack followed an Israeli strike on Beirut that targeted a Hezbollah commander, with the potential for
more violence across the region underscoring gold’s haven appeal. Spot gold +0.4%, silver +0.8%, copper +2%.

ENERGY:   

Oil prices are sharply higher on rising geopolitical risks after Hamas said Israel killed its political leader with an airstrike, stoking tensions in a region that
produces around a third of the world’s crude. Hamas said that Ismail Haniyeh was killed in an airstrike in Iran. It followed an earlier attack by Israel on Beirut that killed a senior Hezbollah commander. Iran’s Ayatollah Ali Khamenei said Israel has “prepared
the ground for its severe punishment.”  API said crude inventories fell by 4.5 million barrels last week. If confirmed by official figures later today, it would mark the longest streak of declines since January 2022. Traders are also awaiting an OPEC+ committee
meeting that will take place on Thursday. WTI +3.4%, Brent +3.1%, US Nat Gas +0.5%, RBOB +2.6%.

CURRENCIES:   

In currency markets, the Japanese yen jumped against the US dollar after the Bank of Japan raised its benchmark interest rate and unveiled plans to halve bond purchases.
Governor Kazuo Ueda pledged to keep hiking if the central bank’s price outlook materializes. The dollar eased ahead of the Federal Reserve decision later today. The Aussie$ slid to its lowest since May after core inflation came lower than expected, reducing
the chances of another rate hike. US$ Index -0.45%, GBPUSD -0.05%, EURUSD +0.1%, USDJPY -1.7%, EURJPY -1.6%, AUDUSD -0.5%, USDNOK -0.4%, USDCHF -0.25%.

Spot Bitcoin -0.1%, Spot Ethereum +1.2%.

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
• ACNB (ACNB) Raised to Outperform at Hovde Group; PT $45
• Addex Therapeutics (ADXN SW) ADRs Raised to Buy at HC Wainwright; PT $30
• American States Water (AWR) Raised to Equal-Weight at Wells Fargo
• California Water (CWT) Raised to Equal-Weight at Wells Fargo
• Cemex (CEMEXCPO MM) ADRs Raised to Overweight at Barclays; PT $9
• Clearway Energy (CWEN/A) Raised to Overweight at Morgan Stanley; PT $36
• Corning (GLW) Raised to Buy at Deutsche Bank
• Cryoport (CYRX) Raised to Buy at B Riley; PT $15
• Ecolab (ECL) Raised to Buy at BofA
• Raised to Buy at Citi; PT $265
• Edwards Life (EW) Raised to Outperform at Daiwa; PT $72
• LegalZoom (LZ) Raised to Buy at Jefferies; PT $8
• Lockheed (LMT) Raised to Buy at BofA
• LPL Financial (LPLA) Raised to Buy at BofA(Earlier)
• PayPal (PYPL) Raised to Outperform at Bernstein; PT $78
• Pegasystems (PEGA) Raised to Market Outperform at JMP; PT $85
• Raised to Outperform at William Blair
• Renasant (RNST) Raised to Outperform at Raymond James
• RTX Corp (RTX) Raised to Buy at BofA
• Upstart (UPST) Raised to Outperform at Mizuho Securities; PT $31
• Woodward (WWD) Raised to Buy at Jefferies; PT $190
• Downgrades
• Albemarle (ALB) Cut to Hold at Berenberg
• American Water (AWK) Cut to Underweight at Wells Fargo
• Appian (APPN) Cut to Neutral at DA Davidson; PT $33
• Axos Financial (AX) Cut to Market Perform at KBW; PT $79
• CarParts.com Inc (PRTS) Cut to Sector Perform at RBC; PT $1.30
• Charter Communications (CHTR) Cut to Peerperform at Wolfe
• Definitive Healthcare (DH) Cut to Underweight at JPMorgan; PT $5
• Everi Holdings (EVRI) Cut to Hold at Stifel; PT $14.25
• Filo Corp (FIL CN) Cut to Neutral at Roth MKM; PT C$33
• Cut to Hold at Jefferies; PT C$33
• IPG Photonics (IPGP) Cut to Hold at Benchmark
• MacroGenics (MGNX) Cut to Neutral at B Riley; PT $5
• Cut to Neutral at Guggenheim
• Mawson Infrastructure Group (MIGI) Cut to Neutral at HC Wainwright
• McDonald’s (MCD) Cut to Hold at TD Cowen; PT $280
• Mobileye (MBLY) Cut to Neutral at JPMorgan; PT $24
• NextEra Energy Partners (NEP) Cut to Underweight at Morgan Stanley
• Penumbra (PEN) Cut to Equal-Weight at Wells Fargo; PT $150
• Cut to Neutral at Citi; PT $178
• SmartRent (SMRT) Cut to Neutral at DA Davidson; PT $2
• Initiations
• Angel Oak Mortgage REIT (AOMR) Rated New Buy at BTIG; PT $13.50
• Applied Therapeutics (APLT) Rated New Outperform at William Blair
• AZZ (AZZ) Rated New Peerperform at Wolfe
• Black Diamond Therapeutics (BDTX) Rated New Outperform at Raymond James
• Blink Charging (BLNK) Rated New Buy at Benchmark; PT $5
• Cemex (CEMEXCPO MM) ADRs Rated New Buy at HSBC; PT $9.50
• HomeTrust Banc (HTBI) Rated New Outperform at Hovde Group; PT $42
• Navigator Holdings (NVGS) Rated New Buy at Citi; PT $22
• Nurix (NRIX) Rated New Buy at Truist Secs; PT $36
• On Holding (ONON) Rated New Outperform at Raymond James; PT $46
• SQM (SQM/B CI) ADRs Rated New Hold at Berenberg; PT $35

Data sources: Bloomberg, Reuters, CQG