Daily Game Plan

by Contributor
on November 15, 2024

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

TODAY’S ECONOMIC DATA:  8:30ET Empire Manufacturing, Retail Sales Advance, Import Price Index, Export Price Index,
Fed’s Goolsbee speaks on CNBC; 9:00ET Fed’s Collins speaks; 9:15ET Industrial Production, Capacity Utilization, Manufacturing (SIC) Production; 10:00ET Business Inventories; 10:30ET Fed’s Collins speaks on BTV; 1:15ET Fed’s Williams speaks; 2:05ET Fed’s Goolsbee
speaks on BTV; 3:00ET Fed’s Barkin speaks

Import Prices 0.3 MoM, Exp. -0.1%; Import Prices 0.8% YoY, Exp. 0.3%; Export Prices 0.8% MoM, Exp. -0.1%; Export Prices -0.1% YoY, Exp. -1.7%  

Highlights and News:  

  • For the first time since September 2022, both CPI and PPI inflation are officially back on the rise
  • Traders Pare Back Rate Cut Bets After Powell Comments
  • Investors poured a record $6 billion into crypto funds in the latest week

 

World stocks ease after Fed Chair Jerome Powell signaled the Federal Reserve was in no rush to cut interest rates, and unease built over the composition of President-elect
Donald Trump’s cabinet. Powell said on Thursday the central bank does not need to rush to lower interest rates, citing ongoing economic growth, a solid job market and sticky inflation. Data today showed Japan’s GDP came in better than expected and China’s
retail sales rose 4.8%. Retail sales in China expanded at the fastest in eight months in October, factory output held above a critical level and home-price declines abated, hinting at economic stabilization.  The UK economy cooled by more than expected last
quarter, with most industries experiencing subdued growth amid growing concerns over Labour’s first budget
.  The Israeli attack on Iran in late October destroyed an active top secret nuclear weapons research facility in Parchin, US and Israeli officials tell Axios.     

 

EQUITIES:  

US equity futures are lower as the post-election rally wavers with the S&P now giving back about a third of the gains since the election.  Traders pared expectations for a December rate
cut after Jerome Powell said the “remarkably good” US economy leaves room to ease more carefully.  “The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said. His comments have pushed odds on a December rate cut to less
than 60% from roughly 80% a day earlier. More clarity on the Fed’s path could emerge today as the US releases retail sales data and a host of Fed officials are set to speak.   

Futures ahead of the data: E-Mini S&P -0.5%, Nasdaq -0.8%, Russell 2000 -0.05%, DJI -0.3%. 

In pre-market trading, Alibaba ADRS (BABA) rises 3% as a profit beat offset revenue that came in below analyst estimates. Applied Materials (AMAT) drops 8% after the
semiconductor capital equipment company gave an outlook that raised concerns over chip spending. Despegar.com (DESP) rises 13% after the online travel booking services company reported third-quarter revenue that beat estimates. Domino’s Pizza (DPZ) rises 6%
after Berkshire Hathaway bought stock in the pizza chain. Moderna (MRNA) and other vaccine makers fell after President-elect Trump said he was tapping prominent vaccine skeptic Robert F. Kennedy Jr. to lead the Department of Health and Human Services. Moderna
-2%, Novavax (NVAX) -1%. Palantir (PLTR) gains 2% after the AI software maker said it was transferring its stock listing to Nasdaq from NYSE.

European gauges trim early losses, though the Stoxx 600 eyes a fourth weekly decline. Healthcare and tech lead declines while miners and energy shares outperform. 
Vaccine makers were hit particularly hard after Trump nominated Robert F. Kennedy Jr. to lead the top US health body. Evotec SE soared after attracting takeover interest from Nasdaq-listed biotech firm Halozyme Therapeutics.  Stoxx 600 -0.5%, DAX -0.2%, CAC
-0.2%, FTSE 100 +0.05%. Basic Resources +1.6%, Energy +0.9%, Banks +0.9%, Travel +0.7%. Healthcare -2.5%, Technology -1.8%.

Shares in Asia were mixed as a weaker yen supported Japanese exporters and offset the drag from a decline in Chinese shares. The MSCI Asia Pacific Index climbed 0.3%, 
notching its first gain this week. Samsung Electronics provided the biggest boost as the South Korean chipmaker rose the most in four years. Positive earnings results from Japan’s biggest banks supported the sector’s shares. Shares in China dropped as concerns
over a deepening rift with the US outweighed signs of economic stabilization. Philippines +1.8%, ASX 200 +0.7%, Topix +0.4%, Singapore +0.2%,Taiwan +0.1%. Kospi -0.1%, Thailand -0.5%, Indonesia -0.7%, Vietnam -1.1%, CSI 300 -1.75%.

FIXED INCOME: 
 

Treasuries are mixed with front-end outperforming, recouping some of the losses from late Thursday after comments by Fed Chair Powell curbed wagers on a December
rate cut. Yield curve is steeper, likewise reversing part of the flattening reaction to Powell. The Fed’s Susan Collins told the WSJ a December cut is on the table but isn’t “a done deal.”  Front-end yields are richer by more than 5bp with 30-year slightly
cheaper on the day; 2s10s and 5s30s curves are nearly 4bp steeper near session wides, erasing about half of Thursday’s flattening. 10-year yield around 4.425%.

 

 

METALS: 

Gold stabilized after dipping to a two-month low in Thursday’s session. Bullion has fallen six days in a row and is set for a weekly loss of more than 4%, the most
since June 2021. Traders pared back expectations for lower rates in December and policy-sensitive US bond yields jumped after Powell said that the central bank will be in no rush to cut given the “remarkably good” performance of the economy. Spot gold +0.3%,
Silver +1%, Copper +1.6%.

 

 

 

 

ENERGY:   

 

Oil prices are slightly lower and on track for weekly losses, plagued by a jump in the US dollar and continued worries over demand from China. Government data from
China showed refinery throughput fell 4.6% year-over-year in October, according to Reuters. Investors are also weighing the potential impact of Donald Trump’s policies following his presidential election victory last week, ranging from efforts to increase
domestic oil production and tighter enforcement of sanctions on Iran. Doug Burgum will lead the Department of the Interior, Donald Trump said, in a position that would give him significant influence over plans to boost domestic energy production. WTI -0.35%,
Brent -0.4%, US Nat Gas -2.8%, RBOB +0.3%.

 

 

CURRENCIES: 

In currency markets, the US dollar eases as markets pivot from Trump trades to the Fed’s cautious tone on interest-rate cuts. The greenback stayed below two-year
highs hit on Thursday but is set for its seventh straight weekly gain. The euro bounced but is still on track for its worst week in seven months. Sterling edges higher after its worst weekly fall since January 2023 and is back at the level it started the year.
The yen reversed early losses after Japan’s Finance Minister Katsunobu Kato said authorities are monitoring the forex market with a high sense of urgency and will respond to any excessive moves. US$ Index -0.1%, GBPUSD +0.1%, EURUSD +0.4%, USDJPY -0.5%, AUDUSD
+0.3%, NZDUSD +0.4%, USDCHF -0.25%, USDNOK -0.8%. 

 

 

 

 

Spot Bitcoin +1.9%, Spot Ethereum -0.4%. Bitcoin edged higher again but held off its recent highs. Investors poured a record $6 billion into crypto funds in the week
through Nov. 13, according to BofA and EPFR data. Yesterday the Pennsylvania House of Representatives introduced legislation that would enable the state to hold Bitcoin on its balance sheet as a reserve asset.

 

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
    • Autolus Therapeutics (AUTL) ADRs Raised to Buy at Redburn; PT $13
    • Bloom Energy (BE) Raised to Overweight at Piper Sandler; PT $20
    • BrightView (BV) Raised to Outperform at William Blair
    • Comerica (CMA) Raised to Equal-Weight at Wells Fargo; PT $73
    • Descartes Systems (DSG CN) Raised to Equal-Weight at Barclays
    • First Advantage (FA) Raised to Outperform at RBC; PT $22
    • Independence Realty (IRT) Raised to Market Perform at BMO; PT $21
    • Kulicke & Soffa (KLIC) Raised to Buy at Needham; PT $55
    • Microsoft (MSFT) Raised to Buy at First Shanghai; PT $500
    • Morgan Stanley (MS) Raised to Equal-Weight at Wells Fargo; PT $142
    • Rocket Cos. (RKT) Raised to Neutral at BofA; PT $15
    • Sally Beauty (SBH) Raised to Market Perform at Raymond James
    • UGI (UGI) Raised to Outperform at Mizuho Securities; PT $30
    • Zedcor Inc (ZDC CN) Raised to Buy at Paradigm Capital; PT C$3.80
  • Downgrades
    • Advance Auto (AAP) Cut to Sell at CFRA
    • Alexandria Real Estate (ARE) Cut to Hold at Deutsche Bank; PT $112
    • Applied Materials (AMAT) Cut to Neutral at Fubon; PT $200
    • AtkinsRealis (ATRL CN) Cut to Reduce at Veritas Investment Research Co
    • Bilibili (BILI) ADRs Cut to Neutral at ICBC Research; PT $21.10
    • Bionano Genomics Inc (BNGO) Cut to Neutral at Ladenburg Thalmann
    • Bluebird Bio (BLUE) Cut to Neutral at BofA
      • Cut to Underweight at JPMorgan
    • Digital Turbine (APPS) Cut to Underperform at BofA
    • Dorel Industries (DII/B CN) Cut to Hold at TD Cowen; PT C$4.50
    • European Wax (EWCZ) Cut to Underweight at Morgan Stanley; PT $5
    • Gogoro (GGR) Cut to Neutral at Citi; PT 50 cents
    • Kulicke & Soffa (KLIC) Cut to Neutral at Fubon; PT $45
    • Landstar (LSTR) Cut to Market Perform at Raymond James
    • Maxeon Solar (MAXN) Cut to Underweight at Morgan Stanley; PT $4
    • Netflix (NFLX) Cut to Hold at First Shanghai; PT $823
    • Nice Ltd (NICE IT) ADRs Cut to Market Perform at Oppenheimer
    • Predictive Oncology (POAI) Cut to Neutral at HC Wainwright
    • RBC (RY CN) Cut to Hold at TD Cowen; PT C$180
    • SolarEdge (SEDG) Cut to Underweight at Morgan Stanley; PT $9
    • SOW GOOD INC (SOWG) Cut to Neutral at Roth Capital Partners; PT $4
      • Cut to Hold at Craig-Hallum; PT $4.50
    • Stock Yards Bancorp (SYBT) Cut to Equal-Weight at Stephens; PT $76
    • TPI Composites (TPIC) Cut to Underweight at Morgan Stanley; PT $2
    • TreeHouse (THS) Cut to Equal-Weight at Consumer Edge Research
  • Initiations
    • AbbVie (ABBV) Reinstated Outperform at Wolfe; PT $205
    • Alaska Air (ALK) Reinstated Buy at Goldman; PT $70
    • Allegiant Travel (ALGT) Reinstated Neutral at Goldman; PT $83
    • American Air (AAL) Reinstated Neutral at Goldman; PT $15
    • Amgen (AMGN) Reinstated Peerperform at Wolfe
    • Biogen (BIIB) Reinstated Peerperform at Wolfe
    • BioMarin (BMRN) Rated New Outperform at Wolfe; PT $95
    • Bristol Myers (BMY) Rated New Peerperform at Wolfe
    • CDW (CDW) Rated New Buy at Redburn; PT $230
    • Comfort Systems USA (FIX) Rated New Buy at Stifel; PT $524
    • Core Scientific (CORZ) Rated New Buy at Roth Capital Partners
    • Delta Air Lines (DAL) Reinstated Buy at Goldman; PT $83
    • Doximity (DOCS) Reinstated Neutral at Goldman; PT $58
    • Eli Lilly (LLY) Rated New Outperform at Wolfe; PT $1,000
    • Everus Construction Group (ECG) Rated New Buy at Stifel; PT $71
    • Gilead (GILD) Rated New Outperform at Wolfe; PT $110
    • Grail (GRAL) Rated New Peerperform at Wolfe
    • HealthEquity (HQY) Reinstated Neutral at Goldman; PT $108
    • Insight Enterprises (NSIT) Rated New Buy at Redburn; PT $220
    • JetBlue (JBLU) Reinstated Sell at Goldman; PT $5.50
    • Johnson & Johnson (JNJ) Rated New Outperform at Wolfe; PT $190
    • Limbach Holdings (LMB) Rated New Buy at Stifel; PT $108
    • Merck & Co (MRK) Rated New Peerperform at Wolfe
    • Moderna (MRNA) Rated New Underperform at Wolfe; PT $40
    • Pfizer (PFE) Rated New Underperform at Wolfe; PT $25
    • Regeneron (REGN) Rated New Outperform at Wolfe; PT $1,150
    • Simulations Plus (SLP) Rated New Overweight at Stephens; PT $39
    • SkyWest (SKYW) Reinstated Neutral at Goldman; PT $119
    • Southwest Air (LUV) Reinstated Sell at Goldman; PT $28
    • Sun Country Airlines (SNCY) Reinstated Neutral at Goldman; PT $17
    • Teladoc (TDOC) Reinstated Buy at Goldman; PT $14
    • United Airlines (UAL) Reinstated Buy at Goldman; PT $119
    • Veracyte (VCYT) Rated New Outperform at Wolfe; PT $50

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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