Daily Game Plan

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

TODAY’S ECONOMIC DATA:  10:00ET Wholesale Inventories, Wholesale Trade Sales MoM; 11:00ET NY Fed 1-Yr Inflation
Expectations; 1:00ET Apple product launch

HIGHLIGHTS and News:  

• Irani Revolutionary Guards commander denied reports that Iran sent ballistic missiles to Russia
• Activist Investor Starboard Challenges Murdoch’s News Corp Control
  
• Biden’s plan to block US Steel takeover alarms foreign investors
  

Global stocks fluctuated at four-week lows after a selloff triggered by cooling US jobs data that left economists and traders at odds as to how aggressively the Federal
Reserve will cut interest rates. September is proving to be a volatile month for markets with stocks and commodities both sliding amid concern about waning global growth. The carry trade unwind remains a risk factor for stocks, Morgan Stanley’s Michael Wilson
said. China’s core inflation cooled in August to its weakest in more than three years, prompting calls for more measures to prevent falling corporate revenue, wages and spending. On Thursday, the ECB rate decision is due where a 25bps cut is expected.  

EQUITIES:  

US equity futures are higher as investors contemplate whether the Fed will look to start easing gradually or to front-load rate cuts, with Wednesday’s US consumer-inflation numbers next
up on the radar. Weak US non-farm payrolls data on Friday sparked concern that the Federal Reserve is moving too slowly to support the world’s largest economy. Nasdaq futures outperform after testing its key 200 day moving average on Friday. In corporate news,
Boeing offered to increase wages by 25% over four years and committed to build its next plane in the Seattle area as part of a deal aimed at averting a strike by its biggest union. Oracle reports post-market, with investors hopeful for continued momentum in
the firm’s cloud infrastructure business. Apple investors are bracing for the company’s most important event of the year today when it rolls out its latest iPhones and set the stage for a new artificial intelligence platform.

Futures ahead of the bell: E-Mini S&P +0.55%, Nasdaq +0.7%, Russell 2000 +0.15%, DJI +0.6%

In pre-market trading, Boeing (BA) rises 4.6% on optimism that a labor deal with its largest union will help the troubled US aircraft manufacturer avoid a potentially crippling strike
at its Seattle-area factories. Palantir Technologies (PLTR) climbs 8.5% and Dell (DELL) rises 5.5% following news that the companies will join the S&P 500. Savara (SVRA) rallies 5.7% after the drug developer gave additional data from a late stage trial of
its investigative therapy for patients with a rare lung disease. Summit Therapeutics (SMMT) soars 34% after management presented over the latest data of its lung cancer drug, ivonescimab, which showed “statistically significant improvement” in progression-free
survival compared to Merck’s Keytruda. Merck (MRK) slips 1.7%.

European gauges advanced, rebounding after the worst week in 18 months, as traders’ attention turns to key US inflation data and the European Central Bank rates decision later in the
week. The Euro Stoxx 600 is holding early gains, paring some of last week’s 3.5% loss. Real Estate shares declined the most, while travel & leisure, banks and technology sectors outperform. OCI NV gained as it agreed to sell its methanol business to Methanex
Corp. in a deal worth more than $2 billion. Stoxx 600 +0.6%, DAX +0.5%, CAC +0.6%, FTSE 100 +0.7%. Travel & Leisure +1.7%, Banks +1.5%, Technology +1.25%. REITs -0.3%.

Shares in Asia fell, as technology stocks slid on concerns over US economic growth. The MSCI Asia Pacific Index fell 1.3%, with chipmakers Taiwan Semiconductor Manufacturing Co. and Samsung
Electronics among the biggest drags. Japanese shares pared losses, with the Nikkei 225 Average closing 0.5% lower after plummeting more than 3% during the day, helped by a weakening yen. Hong Kong benchmarks ended with a fifth straight day of losses. Chinese
stocks slumped as weak producer and consumer price data today pointed to continued deflationary pressures. China said it will fully open its manufacturing sector to foreign investments and is also allowing more room for overseas capital in its health sector.
Hang Seng Index -1.4%, Taiwan -1.35%, CSI 300 -1.2%, Topix -0.7%, Vietnam -0.5%, Kospi -0.3%, ASX 200 -0.3%, Thailand +0.25%, Sensex +0.45%, Philippines +0.7%, Singapore +1.2%.  

FIXED INCOME: 
 

Bonds reversed some of their recent gains, with the 10-year Treasury yield jumping as much as five basis points, the first increase in five days.  The yield curve
is slightly flatter. Focus is on Wednesday’s August CPI data as policymakers are in a self-imposed quiet period until the September 18 rate decision.  10-year yield around 3.75% is ~4bp cheaper on the day. Treasury auctions resume Tuesday with $58b 3-year
new issue, followed by $39b 10-year and $22b 30-year reopenings Wednesday and Thursday.

METALS: 

Gold steadied after falling 0.8% on Friday, as the Federal Reserve’s pivotal September meeting draws closer. Weekend data showing China’s central bank kept its gold
holdings unchanged for a fourth straight month had little impact on prices. While the People’s Bank of China has paused purchases, gold bars and coins are increasingly popular as investors seek to safeguard their wealth in a weak economy. Spot gold ~ flat,
silver +0.6%.

ENERGY:   

A potential hurricane approaching the US Gulf Coast helped oil prices to recover some of the previous week’s heavy losses. Prices of Brent crude had fallen in each
of the past six trading sessions, retreating by more than 11%, or nearly $9 a barrel, to register the lowest closing price since December 2021 on Friday. A weather system in the southwestern Gulf of Mexico will strengthen into a tropical storm Monday and is
forecast to become a hurricane before it reaches the northwestern US Gulf Coast, the National Hurricane Center said on Sunday. WTI +1.2%, Brent +1.1%, US Nat Gas -4.5%, RBOB +2%.

CURRENCIES:   

In currency markets, the dollar climbed against all G-10 peers except the Loonie, extending Friday’s rebound, as Treasury yields rose at the start of a week marked
by US inflation data and a presidential debate. The yen fell after a report showed Japan’s GDP expanded at an annualized pace of 2.9% in the second quarter, slightly lower than the preliminary estimate. US$ Index +0.5%, GBPUSD -0.35%, EURUSD -0.4%, USDJPY
+0.9%, AUDUSD -0.2%, USDNOK +1%, USDCHF +0.7%, NZDUSD -0.6%, USDCAD -0.1%.

Spot Bitcoin +1.7%, Spot Ethereum +1.8%.  US Bitcoin ETFs posted the longest run of daily net outflows since listing at the start of the year, pulling close to $1.2
billion over the eight days through Sept. 6. 

• Upgrades
• Celestica (CLS CN) Raised to Buy at Stifel; PT C$78.70
• ExlService (EXLS) Raised to Buy at Jefferies; PT $42
• LGI Homes (LGIH) Raised to Neutral at Wedbush; PT $125
• MarineMax (HZO) Raised to Buy at Citi; PT $44
• Nucor (NUE) Raised to Overweight at JPMorgan; PT $174
• Steel Dynamics (STLD) Raised to Neutral at JPMorgan; PT $131
• Thomson Reuters (TRI CN) Raised to Outperform at National Bank; PT C$260
• Travere Therapeutics Inc (TVTX) Raised to Buy at Guggenheim; PT $25
• U.S. Steel (X) Raised to Overweight at JPMorgan; PT $42
• Ultrapar (UGPA3 BZ) ADRs Raised to Outperform at Grupo Santander; PT $5.50
• Walmex (WALMEX* MM) ADRs Raised to Buy at Jefferies; PT $36.36
• Downgrades
• Alamos Gold (AGI CN) Cut to Sector Perform at National Bank; PT C$28
• BRP Inc. (DOO CN) Cut to Sector Perform at Scotiabank; PT C$91
• Cut to Neutral at CIBC; PT C$92
• Cut to Hold at Desjardins; PT C$94
• Camden Property (CPT) Cut to Sector Perform at RBC; PT $122
• Church & Dwight (CHD) Cut to Equal-Weight at Morgan Stanley; PT $110
• Colgate-Palmolive (CL) Cut to Hold at Deutsche Bank
• Consensus Cloud (CCSI) Cut to Underweight at JPMorgan; PT $21
• DHT Holdings (DHT) Cut to Hold at Arctic Securities; PT $10.90
• Fox Corp (FOXA) Cut to Neutral at Seaport Global Securities
• Frontline PLC (FRO) Cut to Hold at Arctic Securities; PT $24.14
• Huntington Ingalls (HII) Cut to Neutral at JPMorgan; PT $285
• Intl Seaways (INSW) Cut to Hold at Arctic Securities; PT $53
• Invitation Homes (INVH) Cut to Sector Perform at RBC; PT $36
• National Storage (NSA) Cut to Sector Weight at KeyBanc
• Nordic American Tankers (NAT) Cut to Hold at Arctic Securities
• Initiations
• Atmos Energy (ATO) Reinstated Buy at Ladenburg Thalmann; PT $144
• BBB Foods (TBBB) Rated New Hold at Jefferies; PT $33
• Block (SQ) Rated New Neutral at New Street Research; PT $70
• Enliven Therapeutics (ELVN) Rated New Buy at HC Wainwright; PT $37
• Galapagos (GLPG NA) ADRs Rated New Market Perform at Leerink; PT $24
• GE Healthcare (GEHC) Rated New Neutral at JPMorgan; PT $90
• Geron (GERN) Rated New Outperform at Leerink; PT $7
• Immunocore (IMCR) ADRs Rated New Buy at Kempen & Co; PT $70
• Ironwood (IRWD) Rated New Market Perform at Leerink; PT $5
• Jasper Therapeutics (JSPR) Rated New Market Outperform at JMP; PT $70
• Merchants (MBIN) Rated New Equal-Weight at Morgan Stanley; PT $54
• Protagonist Therapeutics (PTGX) Rated New Buy at Truist Secs; PT $60
• Shopify (SHOP CN) Rated New Buy at Phillip Secs
• Southern States Bancshares (SSBK) Rated New Outperform at Hovde Group
• Wave Life Sciences (WVE) Rated New Overweight at JPMorgan; PT $10

Data sources: Bloomberg, Reuters, CQG

David Wienke