Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET
Employment Report**; 8:45ET Fed’s John Williams speaks; 11:00ET Fed’s Christopher Waller speaks

HIGHLIGHTS and News:  

• Oil headed for its biggest weekly loss in almost a year
• Hunter Biden pleaded guilty to federal tax charges in a surprise move
  
• Georgia Charges Father Of School Shooter With Murder, Manslaughter
  
• COOK REPORT MOVES SEVERAL HOUSE RACE RATINGS IN DEMOCRATS FAVOR

World stocks held near three-week lows as investors braced for jobs data that could decide the size and speed of coming rate cuts in the world’s largest economy.
Globally, jittery investors poured $61 billion into cash-like money market funds in the week to Wednesday, Bank of America said. About $600 million was redeemed from European equity funds in the week through Sept. 4, while US stocks suffered the first outflow
in 10 weeks. Next week, UK employment and wage data and economic growth figures will be released, and the next monetary policy meeting for the ECB will take place following its summer break. The US, Qatar and Egypt will present a new cease-fire proposal to
Israel and Hamas in the coming days, Antony Blinken said.  

EQUITIES:  

US equity futures fell as traders braced for jobs data that will be critical in determining the health of the US economy and the size of a Federal Reserve interest rate cut later this
month. Analysts are looking for the number of new jobs, due before the bell, to rise by 160,000 and for the unemployment rate to dip to 4.2%. Fed governor Christopher Waller and New York Fed President John Williams are due to speak just after the jobs data,
which could give markets more clues on the scale of a Fed rate cut on September 18. Nasdaq underperforms as chipmakers slid following disappointing guidance by Broadcom.   

Futures ahead of the data: E-Mini S&P -0.5%, Nasdaq -1%, Russell 2000 -0.5%, DJI -0.4%

In pre-market trading, Broadcom (AVGO) shares fall 8.8% after the chipmaker delivered a disappointing sales forecast, hurt by the portion of its business that isn’t linked with artificial
intelligence. Mobileye (MBLY) drops 4.9% after Bloomberg reported Intel was considering options for its stake in the automated driving systems provider. DocuSign (DOCU) shares decline 1.6% after the e-signature company reported billings growth that analysts
viewed as weak. Samsara (IOT) shares rise 3.6% after the application software company raised its full-year forecast. UiPath (PATH) shares rise 9.5% after the software company’s full-year revenue forecast came ahead of estimates.

Equal weight S&P 500 ETF versus SPY

European gauges slipped for a fifth straight session and set for the biggest weekly decline in almost a year. Germany’s DAX weakened after data showed the country’s industrial production
fell by 2.4% in July, compared with analysts’ prediction of a 0.3% drop. A key measure of euro-zone wage growth eased, proving further assurance to European Central Bank officials seeking to lower interest rates next week. The Euro Stoxx 600 has fallen ~2.5%
after closing last week at a record high. Among individual names, Raiffeisen Bank International AG slid after a court in Russia ordered shares of the company’s unit there to be frozen. Stoxx 600 -0.3%, DAX -0.5%, CAC -0.2%, FTSE 100 -0.25%. Basic Resources
-1.6%, REITs -1.5%, Energy -1.4%. Healthcare +0.5%, Media +0.5%, Fin Services +0.2%. 

Shares in Asia were mixed amid muted trading as Hong Kong’s market was halted due to a typhoon. The MSCI Asia Pacific Index added 0.1%, erasing earlier losses, with TSMC and Commonwealth
Bank of Australia among the biggest boosts. A rebound in tech stocks helped Taiwan’s benchmark close higher, while Thailand’s equities gained after the nation’s lower house of parliament passed its budget for the fiscal year. Mainland China shares slid after
news that the US administration plans export controls on critical technologies. Japan’s gauges fell as the yen jumped, weighing on the outlook for Japanese exports. The Nikkei 225 is down about 4% this week. Hong Kong stock markets were shut ahead of Super
Typhoon Yagi’s expected landfall along the coast of Hainan province. Thailand +1.7%, Taiwan +1.2%, Indonesia +0.5%, Vietnam +0.5%, ASX 200 +0.4%. Singapore -0.1%, CSI 300 -0.8%, Topix -0.9%, Kospi -1.2%, Sensex -1.2%.

FIXED INCOME: 
 

Treasury yields slipped, extending their declines this week. The Fed’s Austan Goolsbee told MarketWatch that the longer-run data trend justifies cutting rates soon,
and then steadily over the next year. Mary Daly told the WSJ that further slowing in the labor market “would be unwelcomed.”  Two-year Treasury yields are down around 20 basis points so far this week to around 3.71%, trading around their lowest since early
2023. 10-year yield dropped two basis points to 3.7% ahead of the employment report. Companies are rushing to the US debt market, with a record-breaking $80 billion in bonds sold since Labor Day and an additional $28 billion in leveraged loans.

METALS: 

Gold is steady, holding its advance above $2,500 an ounce ahead of US economic data this morning that may prove key in shaping the Federal Reserve’s rate cut this
month. Bullion rose 0.8% Thursday following a report that showed US companies added the fewest jobs last month since the start of 2021. The figures were more evidence that the labor market is shifting into a lower gear, boosting chances the central bank’s
expected pivot to monetary easing will be the first in a series of cuts. Spot gold ~flat, silver -0.1%.

ENERGY:   

Oil prices edge higher but are facing the worst week since October 2023 as demand worries weigh against a big withdrawal from US inventories and a delay to output
increases by OPEC+ producers. OPEC’s plan to delay boosting output won’t prevent the oil market from entering a sizable surplus next year, Citi said. WTI and Brent wiped out 2024 gains this week, with analysts citing fears over a global economic slowdown.
With oil slumping, OPEC+ said on Thursday it would extend voluntary oil production cuts of 2.2 million barrels a day for two months to the end of November. The reductions will be “gradually phased out on a monthly basis starting December 1. WTI +0.4%, Brent
+0.4%, US Nat Gas +0.9%, RBOB +0.9%.

CURRENCIES:   

In currency markets, the dollar headed for a third daily drop and the yen rose to its highest in a month ahead of the US August payrolls report. The yen is higher
for a fourth straight day, bringing the weekly gain to roughly around 3%. Currency strategists see a strong chance the yen will test its August high versus the dollar if the payrolls data boost bets for a 50 basis-point move. JPMorgan is adding positions to
its existing yen longs on the view that Friday’s US jobs data will disappoint, paving the way for the Fed to cut the policy interest rate by 50 basis points this month. US$ Index -0.1%, GBPUSD -0.1%, EURUSD -0.05%, USDJPY -0.3%, AUDUSD -0.05%, USDNOK -0.05%,
USDCHF -0.1%.  

Spot Bitcoin -0.4%, Spot Ethereum +0.2% (at 7:45ET)

• Upgrades
• Amneal Pharma (AMRX) Raised to Neutral at JPMorgan; PT $9
• Carrier Global (CARR) Raised to Peerperform at Wolfe
• Coinbase (COIN) Raised to Equal-Weight at Barclays; PT $169
• Eaton Corp (ETN) Raised to Peerperform at Wolfe
• Fortive (FTV) Raised to Outperform at Mizuho Securities; PT $90
• Hubbell (HUBB) Raised to Buy at Deutsche Bank; PT $441
• Intra-Cellular (ITCI) Raised to Overweight at Piper Sandler; PT $92
• NIO Inc. (NIO) ADRs Raised to Overweight at JPMorgan; PT $8
• OMA (OMAB MM) ADRs Raised to Overweight at Morgan Stanley; PT $77
• Reddit (RDDT) Raised to Buy at President Capital Management; PT $74
• Robinhood (HOOD) Raised to Equal-Weight at Barclays; PT $20
• U.S. Steel (X) Raised to Outperform at BNPP Exane; PT $40
• Downgrades
• Bloom Energy (BE) Cut to Hold at Jefferies; PT $11
• Ciena (CIEN) Cut to Neutral at BofA; PT $59
• Fortive (FTV) Cut to Peerperform at Wolfe
• Frontier (FYBR) Cut to Equal-Weight at Wells Fargo; PT $38.50
• KBR (KBR) Cut to Hold at TD Cowen
• Organon (OGN) Cut to Underweight at JPMorgan; PT $20
• Super Micro Computer (SMCI) Cut to Neutral at JPMorgan
• Initiations
• Alarm.com (ALRM) Reinstated Neutral at Goldman; PT $64
• Allurion Technologies (ALUR) Rated New Buy at Roth Capital Partners
• Amicus (FOLD) Rated New Buy at Jefferies; PT $18
• Archrock (AROC) Rated New Overweight at JPMorgan; PT $24
• Bicycle Therapeutics (BCYC) ADRs Rated New Outperform at RBC; PT $35
• Booking (BKNG) Rated New Hold at Truist Secs; PT $4,100
• Burford Capital (BUR LN) Rated New Buy at Deutsche Bank; PT $18
• Chord Energy (CHRD) Rated New Hold at Jefferies; PT $160
• Dakota Gold (DC) Rated New Outperform at BMO; PT $6
• Expedia (EXPE) Rated New Hold at Truist Secs; PT $148
• Janux Therapeutics (JANX) Rated New Buy at Stifel; PT $70
• MicroStrategy (MSTR) Rated New Overweight at Barclays; PT $146
• Oklo (OKLO) Rated New Neutral at Seaport Global Securities
• OneSpan Inc (OSPN) Rated New Buy at Rosenblatt Securities Inc; PT $20
• ORIC Pharma (ORIC) Rated New Buy at Stifel; PT $20
• Perpetua Resources Corp (PPTA CN) Rated New Outperform at National Bank

Data sources: Bloomberg, Reuters, CQG

David Wienke