Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Housing Starts, Building Permits, Current Account Balance; 2:00ET FOMC Rate Decision*;
2:30ET Fed’s Powell speaks

Highlights and News:  

• Honda, Nissan Explore Merger
• At least 100,000 bodies in Syrian mass grave, US advocacy group says
• Biden to Announce Chinese Semiconductor Probe in Coming Days
  
• Fed Expected to Cut Today; Focus on Dot Plot
  

Global stocks rebounded as investors awaited the Federal Reserve’s final policy decision of the year, with a quarter point cut fully priced in. The Bank of England
meets on Thursday and is not expected to make any changes to monetary policy. UK inflation rose 2.6% to an eight-month high in November, but the rise in services prices – watched closely by the Bank of England as an underlying measure of inflationary pressures
– held steady at 5%. Inflation in the euro region picked up less than initially reported in November, adding to arguments of more European Central Bank interest-rate cuts. In Brazil, the selloff that sent the real plunging to a record low is engulfing everything
from stocks to local-currency debt to dollar bonds, with traders even piling into hedges against a sovereign default.  

EQUITIES:  

US equity futures are higher, led by small caps ahead of the anticipated “hawkish” rate cut from the Fed. The Fed is expected to cut rates by a quarter point, while signaling a cautious
stance on easing monetary policy in the coming year. Focus will be on updated economic projections and the dot plot, which could provide insights into interest rate trends through 2025 and 2026.

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.2%, Russell 2000 +0.9%, DJI +0.4%.

In pre-market trading, Corvus Pharmaceuticals (CRVS) rises 10% ahead of a data update today from an early trial of its experimental treatment for patients with eczema.
Jabil (JBL) gains 9.7% boosting outlook and said it saw strength in key end markets lead to quarterly results above its own expectations. Heico (HEI) shares fall 5.5% after the aerospace parts manufacturer’s sales fell short of estimates, driven by a decline
across the electronic technologies group. General Mills (GIS) slips 3% as the company targets organic sales for the full year at the lower end of previously given ranges due to higher promotional investments. Heico (HEI) declines 4% after the manufacturer’s
sales fell short of estimates, driven by a decline across the electronic technologies group. Ollie’s Bargain Outlet (OLLI) gains 3% after Citi double-upgraded the closeout retailer to buy, removing the stock’s only negative rating. Post Holdings (POST) rises
2% after the packaged-food company said it agreed to acquire Potato Products of Idaho LLC.

European gauges inch higher as they look to snap a four-day losing streak. The Stoxx 600 is holding in positive territory, helped by gains in energy, technology and
bank shares. Commerzbank AG rose after UniCredit SpA said it has boosted its stake in the German lender. Renault SA, Nissan’s biggest shareholder, rose as much as 7.4% in Paris on reports that Honda and Nissan were exploring a merger. Stoxx 600 +0.1%, DAX
+0.2%, CAC +0.1%, FTSE 100 ~flat.  Energy +0.9%, Technology +0.9%, Banks +0.75%, Autos +0.5%. Food & Bev -0.8%, Utilities -0.5%. 

Shares in Asia were mixed, with the MSCI Asia Pacific Index eking out a small gain. Tech heavyweights such as TSMC and Samsung Electronics among the biggest contributors.
Chinese stocks rose after local regulators issued guidelines stipulating state-owned firms to improve and strengthen market value management over their holding companies. Hong Kong-listed Chinese tech stocks shrugged off news that the US is set to initiate
a trade investigation into Chinese semiconductors in the coming days. In Japan, sentiment remained cautious ahead of the central bank’s monetary policy decision this week. Shares of Nissan Motor Co. jumped the most since at least 1974 on news that the ailing
carmaker is exploring a possible merger with Honda Motor Co.   Kospi +1.1%, Hang Seng Index +0.8%, Taiwan +0.6%, CSI 300 +0.5%, Vietnam +0.3%. ASX 200 -0.05%, Topix -0.3%, Philippines and Singapore -0.5%, Sensex -0.6%, Indonesia -0.7%. 

FIXED INCOME: 
 

Treasuries are steady before the Fed decision with US 10-year yields up 1bp at 4.41% and the curve slightly steeper. Price action is limited ahead of Fed policy announcement
at 2pm EST. European bonds broadly underperform US rates, led by gilts, where money markets have pared wagers on BOE interest-rate cuts ahead of Thursday’s monetary-policy meeting.

METALS: 

Gold traded in a narrow band ahead of the Fed’s upcoming rate decision, with traders looking for clues about next year’s monetary-policy path. Traders will also be
monitoring US data for further clues about the 2025 outlook, with gross domestic product and the core personal consumption expenditures index — the Fed’s preferred gauge of underlying inflation — due later this week. Spot gold -0.05%, Silver -0.5%, Copper
+0.2%.

ENERGY:   

Oil prices rose slightly as investors stayed cautious ahead of an expected interest rate cut by the US Federal Reserve, while a sizable draw in US crude inventories
offered further support. US crude inventories fell by 4.7 million barrels last week; the API reported. That would be a fourth straight decline and will cut total holdings to the lowest since September if confirmed by the EIA today.  WTI +0.8%, Brent +0.7%,
US Nat Gas +1%, RBOB +1%.

CURRENCIES: 

In currency markets, the dollar traded at multi-month, and even multi-year, highs against a range of currencies, including the Australian, New Zealand and Canadian
dollars. Sterling dipped initially after data showed UK consumer inflation rose a touch more than expected in November. The Canadian dollar slid to its lowest level since March 2020. Brazil took extraordinary measures to stem a collapse in the real, selling
over $3 billion in local markets. Australia’s dollar fell as its budget is expected to slip deeper into deficit in the years ahead due to rising government spending and a weakening in key trade partner China, a mid-year fiscal update showed.  US$ Index -0.02%,
GBPUSD +0.05%, EURUSD +0.05%, USDJPY +0.1%, AUDUSD -0.3%, NZDUSD -0.35%, USDCHF +0.1%.     

Spot Bitcoin -1.5%, Spot Ethereum -1.7%. Bitcoin’s soaring value has caught the attention of high-end fashion brands and retailers, prompting further interest in
offering cryptocurrencies as a means of payment.

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
• Azenta Inc (AZTA) Raised to Overweight at Stephens; PT $60
• BILL Holdings Inc (BILL) Raised to Overweight at KeyBanc; PT $115
• Citizens Financial (CFG) Raised to Strong Buy at Raymond James; PT $55
• Dow (DOW) Raised to Outperform at Evercore ISI; PT $56
• Expedia (EXPE) Raised to Buy at BofA; PT $221
• Fiserv (FI) Raised to Overweight at Stephens; PT $255
• Liberty Formula One (FWONA) Raised to Overweight at Morgan Stanley
• MSCI (MSCI) Raised to Buy at Goldman; PT $723
• Oceaneering (OII) Raised to Equal-Weight at Barclays; PT $26
• Ollie’s Bargain (OLLI) Raised to Buy at Citi; PT $133
• Packaging Corp (PKG) Raised to Buy at Jefferies; PT $280
• Principal Financial (PFG) Raised to Overweight at Piper Sandler
• Q2 Holdings (QTWO) Raised to Overweight at KeyBanc; PT $126
• Quebecor (QBR/B CN) Raised to Outperform at RBC; PT C$39
• RioCan REIT (REI-U CN) Raised to Outperform at BMO; PT C$20.50
• Transocean (RIG) Raised to Overweight at Barclays; PT $4.50
• Westlake Corp (WLK) Raised to Buy at Citi; PT $140
• Workiva (WK) Raised to Buy at Stifel; PT $130
• Xometry (XMTR) Raised to Overweight at JPMorgan; PT $45
• Downgrades
• Angi Inc (ANGI) Cut to Neutral at JPMorgan
• Antero Midstream Corp (AM) Cut to Equal-Weight at Wells Fargo; PT $16
• Axalta (AXTA) Cut to Neutral at Citi; PT $41
• Boardwalk REIT (BEI-U CN) Cut to Market Perform at BMO; PT C$73
• Eastman Chemical (EMN) Cut to Neutral at Citi; PT $104
• Electronic Arts (EA) Cut to Hold at Stifel; PT $167
• Enterprise Products (EPD) Cut to Equal-Weight at Wells Fargo; PT $35
• Fluence Energy (FLNC) Cut to Neutral at Baird; PT $20
• Fluor (FLR) Cut to Neutral at Baird; PT $58
• Getty Images (GETY) Cut to Underweight at JPMorgan
• Gibson Energy (GEI CN) Cut to Equal-Weight at Wells Fargo; PT C$25
• Halliburton (HAL) Cut to Equal-Weight at Barclays; PT $33
• Match Group (MTCH) Cut to Neutral at JPMorgan; PT $33
• Oneok (OKE) Cut to Equal-Weight at Wells Fargo; PT $107
• Pactiv Evergreen (PTVE) Cut to Hold at Jefferies; PT $18
• Pembina Pipeline (PPL CN) Cut to Equal-Weight at Wells Fargo; PT C$57
• Plains All American (PAA) Cut to Equal-Weight at Wells Fargo; PT $20
• Plains GP (PAGP) Cut to Equal-Weight at Wells Fargo; PT $20
• Playstudios (MYPS) Cut to Underweight at JPMorgan
• RenaissanceRe (RNR) Cut to Hold at Jefferies; PT $282
• Rivian (RIVN) Cut to Neutral at Baird; PT $16
• SBA Comms (SBAC) Cut to Market Perform at BMO; PT $230
• South Bow (SOBO CN) Cut to Underweight at Wells Fargo; PT C$31
• Tesla (TSLA) Cut to Sell at Punto Casa de Bolsa; PT $364.44
• Valaris (VAL) Cut to Equal-Weight at Barclays; PT $49
• Initiations
• Academy Sports & Outdoors (ASO) Rated New Buy at Citi; PT $65
• Blend Labs (BLND) Rated New Market Outperform at JMP; PT $7
• Box (BOX) Reinstated Buy at DA Davidson; PT $45
• CompoSecure (CMPO) Rated New Buy at TD Cowen; PT $20
• CrowdStrike (CRWD) Rated New Neutral at CTBC Securities; PT $392
• DoubleVerify (DV) Rated New Outperform at Raymond James; PT $25
• Finwise (FINW) Rated New Outperform at Raymond James; PT $21
• Kairos Pharma (KAPA) Rated New Buy at Rodman & Renshaw; PT $12
• Lantheus (LNTH) Rated New Buy at Goldman; PT $143
• On Holding (ONON) Rated New Neutral at Citi; PT $65
• Palvella Therapeutics In (PVLA) Rated New Overweight at Cantor; PT $30
• Quince Therapeutics Inc (QNCX) Rated New Buy at Brookline Capital
• Real Brokerage (REAX) Rated New Buy at BTIG; PT $6
• Rocket Pharma (RCKT) Rated New Buy at Jefferies; PT $29
• Spotify (SPOT) Rated New Buy at SPDB Intl HK; PT $555
• Strawberry Fields REIT (STRW) Rated New Buy at Janney Montgomery
• Tencent Music (TME) ADRs Rated New Buy at SPDB Intl HK; PT $14.50
• Tetra Technologies (TTI) Rated New Buy at Clear Street; PT $8
• US Gold (USAU) Reinstated Buy at Roth Capital Partners; PT $10

Data sources: Bloomberg, Reuters, CQG

David Wienke