TODAY’S GAME PLAN: from the trading
desk, this is not research
TODAY’S ECONOMIC DATA: 10:00ET Fed’s Barr speaks; 11:00ET Fed’s Cook speaks; 12:15ET Fed’s Bowman speaks; 1:00ET
20-Year Bond Auction; 4:00ET Fed’s Collings speaks
Highlights and News:
- Putin Open to Discussing Ukraine Ceasefire with Trump –
Reuters - The US will provide Ukraine with land mines
- The US embassy in Kyiv closed after it was informed of a “potential significant air attack” today
- Comcast to spin off cable-TV channels including MSNBC, CNBC and USA
- California voters rejected a ballot measure to raise the statewide minimum wage to $18 per hour
World stocks nudge higher as a tensions cooled between Russia and the West injecting some confidence among investors ahead of earnings from the world’s most valuable
company, Nvidia, later in the day. Putin said he is open to discussing a Ukraine ceasefire deal with Donald Trump but rules out making any major territorial concessions and insists Kyiv abandon ambitions to join NATO. A Kremlin spokesman cautioned, “freezing
this conflict will not work for us.” In the UK, the latest inflation reading came in hotter than anticipated, with traders paring back expectations for Bank of England rate cuts. Data also showed euro-zone wages jumped by the most since 1999, rising 5.4%
from a year ago, up from 3.5% in the latest quarter.
EQUITIES:
US equity futures edge higher after the benchmarks recovered from a bout of volatility yesterday following the escalation in Russia’s war against Ukraine. Investors await Nvidia’s earnings
results after the close to gauge if spending on artificial intelligence hardware will remain strong. The options market implies a move of almost 9% in either direction for the stock, which is looking for a fifth consecutive quarterly earnings beat. Traders
are also monitoring Trump’s administration picks, especially his selection for the Treasury secretary role. Target shares are lower pre-market after reporting earnings, with the company saying is working to respond to weak demand and offset higher costs.
Futures ahead of the bell: E-Mini S&P +0.25%, Nasdaq +0.3%, Russell 2000 +0.1%, DJI +0.35%.
In pre-market trading, Target Corp. (TGT) plunged 20% after trimming its full-year earnings outlook after a flat sales quarter and a buildup in inventory hurt profitability. Shares are
trading today without the right to receive a dividend payout. Powell Industries (POWL) slipped as much as 14%, after the electrical infrastructure company missed revenue estimates. Lemonade Inc (LMND) advanced 6% as Morgan Stanley upgraded the online insurance
company after an investor day event. Kingsoft Cloud Holdings ADRs (KC) soared 22% as the company reported that revenue growth will accelerate in the fourth quarter. AppLovin (APP) shares rise 2.4% after Piper Sandler initiated coverage on the mobile technology
company with an overweight recommendation. EVgo Inc (EVGO) shares gain 3.8% after JPMorgan placed the electric vehicle charging company on a positive catalyst watch. Global-e Online (GLBE) shares gain 9.6% after the application software company boosted its
full-year revenue forecast. Keysight Technologies (KEYS) shares rise 9.1% after the measurement instruments company reported a beat. Newell Brands (NWL) shares gain 4.3% after Barclays upgraded the consumer-goods company to overweight. Wix.com (WIX) shares
jump 12% after the web-platform company boosted its full-year revenue forecast.
NVDA continues to outperform the Semiconductor ETFs
European gauges rise as traders waited to see if the upcoming earnings release from Nvidia Corp. will sustain the rally in tech shares. Data showing euro-area wages
rising the most since 1999 had little immediate impact on European indexes. Miners and technology shares lead gains while autos and real estate lag. Among individual movers, Sage Group was up as much as 22% after the software firm announced a £400 million
($507 million) buyback and reported stronger revenues. French lottery operator La Française de Jeux SAEM shares fell as much as 6.9% after a shareholder sold 4.7 million shares in the gaming equipment company at a discount. Stoxx 600 +0.5%, DAX +0.4%, CAC
+0.4%, FTSE 100 +0.1%. Technology +1.1%, Basic Resources +1.1%. Financial Services +0.9%. Real Estate -0.5%, Autos -0.3%.
Shares in Asia were mixed to lower as gains in Hong Kong, China and South Korea were offset by weakness in Taiwan, Australia and Japan. The MSCI Asia Pacific Index
dipped 0.5% after advancing 1% in the previous session. Technology stocks weighed on the benchmark most, followed by financial shares. In Japan, Tokyo Gas Co.’s shares jumped 13% after Elliott Investment Management said it now held a major stake in the company
and may make “important proposals” to the utility. Shares of Seven & i Holdings gained after Japanese broadcaster NHK reported the founding family of the retail giant is looking to complete a deal to take the company private by February. Philippines +2.5%,
Vietnam +0.9%, Shanghai Composite +0.7%, Kospi +0.4%, CSI 300 +0.2%, Hang Seng Index +0.2%. Taiwan -0.7%, ASX 200 -0.6%, Topix -0.4%, Singapore -0.4%.
FIXED INCOME:
US Treasuries are marginally lower, weighed by small risk-on tone as Putin hints at peace talks with Trump. The 10-year yield climbed three basis points after falling
yesterday as investors fled to haven assets. Gilts lead a selloff in European government bonds after UK inflation accelerated more than forecast in October, prompting traders to trim bets on the Bank of England’s interest-rate cuts path. US yields are 2bp-3bp
cheaper across a slightly steeper curve; 10-year around 4.42%, about 2bp higher on the day. Treasury’s $16b 20-year new-issue has WI yield around 4.68%, about 9bp cheaper than last month’s auction result.
METALS:
Gold fluctuated with traders closely monitoring geopolitical developments related to the Kremlin’s war in Ukraine. Russia said it’s ready to talk with US President-elect
Donald Trump about a potential cease-fire with Ukraine, though Western officials are skeptical. Gold will rally to $2,900 by the end of next year, UBS said, echoing a call from Goldman for further gains as central banks expand their holdings. Copper rose for
a fourth day after the recent pullback helped stimulate demand from China. Spot gold +0.03%, Silver -0.45%, Copper +0.7%.
ENERGY:
Oil prices move higher as an industry report signaled a build in US crude inventories ahead of official government figures today. The escalating war between major
oil producer Russia and Ukraine has kept a floor under the market this week. China’s imports of Russian crude surged to the highest level in seven months. Oil’s longstanding geopolitical risk premium has evaporated as traders interpret Trump’s foreign policy
agenda as bearish. WTI +0.9%, Brent +0.7%, US Nat Gas +4%, RBOB +0.9%.
CURRENCIES:
In currency markets, US dollar strength resumes its post-election rally after a three-day slide while the yen is the weakest of the G-10 currencies as safe-haven
demand fades. The pound briefly spiked before reversing those gains after UK inflation came in hotter than anticipated. Consumer-price inflation rose to 2.3% from 1.7% in September after a jump in energy bills, above the 2.2% forecast by the BOE. US$ Index
+0.3%, GBPUSD -0.1%, EURUSD -0.3%, USDJPY +0.7%, AUDUSD -0.3%, NZDUSD -0.5%, USDCHF +0.25%, USDNOK +0.4%.
Spot Bitcoin +1.8%, Spot Ethereum +0.2%. Bitcoin set another all-time high.
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
- AeroVironment Inc (AVAV) Raised to Buy at Jefferies
- Chewy (CHWY) Raised to Buy at BofA; PT $40
- Energizer Holdings (ENR) Raised to Neutral at JPMorgan; PT $39
- First Advantage (FA) Raised to Overweight at Barclays; PT $22
- Gaming and Leisure (GLPI) Raised to Buy at Deutsche Bank
- Lemonade (LMND) Raised to Equal-Weight at Morgan Stanley; PT $42
- Merck & Co (MRK) Raised to Buy at CFRA
- National Bank of Canada (NA CN) Raised to Buy at Jefferies; PT C$153
- Newell Brands (NWL) Raised to Overweight at Barclays; PT $10
- SolarEdge (SEDG) Raised to Neutral at Guggenheim
- Warner Bros Discovery (WBD) US Raised to Buy at President Capital Management; PT $11
- XPeng (XPEV) ADRs Raised to Buy at CMB International; PT $16
- Downgrades
- Block (SQ) Cut to Neutral at BNPP Exane
- Bloom Energy (BE) Cut to Hold at HSBC; PT $24.50
- DMC Global (BOOM) Cut to Hold at Stifel
- Energizer Holdings (ENR) Cut to Equal-Weight at Barclays
- Fabrinet (FN) Cut to Sell at B Riley; PT $178
- Fannie Mae (FNMA) Cut to Market Perform at KBW; PT $3
- Fidelity National (FIS) Cut to Underperform at BNPP Exane
- Freddie Mac (FMCC) Cut to Market Perform at KBW; PT $4
- JPMorgan (JPM) Cut to Perform at Oppenheimer; PT $40
- Milestone Scientific (MLSS) Cut to Speculative Buy at Benchmark
- Northern Oil & Gas Inc (NOG) Cut to Sector Perform at RBC; PT $45
- Oaktree Specialty (OCSL) Cut to Neutral at JPMorgan; PT $15
- Cut to Market Perform at JMP
- Toast (TOST) Cut to Neutral at BNPP Exane
- Weibo (WB) ADRs Cut to Neutral at CCB Intl; PT $9.90
- Initiations
- AppLovin (APP) Rated New Overweight at Piper Sandler; PT $400
- Cameco (CCO CN) Reinstated Buy at William O’Neil
- Capri Holdings (CPRI) Reinstated Equal-Weight at Barclays; PT $21
- Cava Group (CAVA) Rated New Market Perform at Bernstein; PT $145
- Chain Bridge Rated New Market Perform at Hovde Group; PT $26
- Fidelity National (FIS) Reinstated Buy at Compass Point; PT $126
- Fiserv (FI) Rated New Buy at Compass Point; PT $278
- Ingram Micro (INGM) Rated New Neutral at JPMorgan; PT $28
- Tapestry (TPR) Reinstated Equal-Weight at Barclays; PT $57
- Tectonic Therapeutic (TECX) Rated New Outperform at Raymond James
- Toast (TOST) Rated New Buy at Compass Point; PT $49
Data sources: Bloomberg, Reuters, CQG
David Wienke
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