Daily Game Plan

by Contributor
on December 19, 2024

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

TODAY’S ECONOMIC DATA:  8:30ET GDP, Personal Consumption, Core PCE Price Index, Philadelphia Fed Business Outlook,
Jobless Claims; 10:00ET Leading Index, Existing Home Sales; 11:00ET KC Fed; 1:00ET 5-year TIPS auction

Highlights and News:  

  • Amazon workers go on strike in the US as union seeks contract talks
  • Bank of Japan keeps rates unchanged
  • Putin says Russia is ready to compromise with Trump on Ukraine war
  • Israel Attacks Yemen’s Capital Sanaa After Houthi Missile Strike

 

Global stocks fell as the US Federal Reserve’s projection of a slower path of interest-rate cuts knocked down investors’ risk appetite globally. The BOJ held rates
steady, and its governor offered few clues on how soon it could push up borrowing costs. Norges Bank stood pat while the Riksbank cut their policy rate by 25 bps, both as expected. The Bank of England kept borrowing costs unchanged at 4.75%, also as expected,
and signaled it will keep easing gradually.  Meanwhile, Putin said that he was ready to compromise over Ukraine in possible talks with Donald Trump on ending the war.   

 

EQUITIES:  

 US equity futures are seeing a partial recovery a day after the surprisingly hawkish Fed messaging sparked the biggest rout in US stocks since early August. The Dow slid more than 1,000
points, posting its longest losing streak since 1974. Micron tumbled post-market in extended trading after its revenue forecast missed projections. Goldman Sachs strategists recommended overweights in US materials, software and services, health care, utilities,
and real estate for the next six months. A stopgap funding deal to keep the US government running collapsed following opposition from Trump and Elon Musk. The president-elect wants lawmakers to include an increase to the debt ceiling in the package.   

Futures ahead of the bell: E-Mini S&P %, Nasdaq %, Russell 2000 %, DJI %.

In pre-market trading, Micron Technology (MU) tumbles 11% after its revenue forecast missed projections, hurt by sluggish demand for smartphones and personal computers. Accenture (ACN)
rises 5% after the IT services company reported its first-quarter results and raised its revenue forecast for the full year. Baidu (BIDU) slips 2% after Reuters reports that Apple is in talks with Tencent and Bytedance to integrate their AI models into iPhones
sold in China. Darden Restaurants (DRI) rises 8% after the Olive Garden-owner’s raised full-year sales outlook topped estimates. IonQ (IONQ) rises 5% as DA Davidson initiates with a buy recommendation. KBR (KBR) rises 5% after the Wall Street Journal reported
that activist investor Irenic Capital Management built a stake in the firm. Lamb Weston (LW) slides 17% after the French-fry supplier cut its sales and adjusted earnings per share guidance for the full year. Lennar Corp. (LEN) drops 8% after the homebuilder
forecast new orders for the first quarter that missed the average analyst estimate. Sangamo Therapeutics (SGMO) rises 18% after the biotech reached a license agreement with Astellas. Soho House (SHCO) soars 58% after saying it received an offer from a new
third-party consortium to buy company for $9/share. Vertex Pharmaceuticals (VRTX) falls 10% after the company’s nonaddictive drug helped patients with lower back pain in a mid-stage trial, but performed similar to a placebo, causing shares to decline. Worthington
Steel (WS) declines 10% after posting fiscal 2Q revenue that dropped 9% from the year-ago quarter.

The NYSE Advance/Decline Line has been a negative this month.

European gauges dropped, tracking losses in the US and Asia, after the Federal Reserve’s hawkish comments signaled fewer interest-rate cuts than anticipated next year.
The Stoxx Europe 600 Index fell more than 1%, with all sectors in the red. Semiconductor stocks dropped after Micron Technology posted a disappointing revenue forecast, dragging down European chip equipment makers. The UK’s FTSE 100 index pared a decline slightly
after the Bank of England maintained its main rate at 4.75% and signaled it will keep easing gradually in 2025.  Among individual movers, Roche Holding AG dropped after the pharma producer said its experimental Parkinson’s disease drug failed in a clinical
trial. Zurich Insurance Group and Munich Re fell after analysts at UBS Group AG cut their recommendation on the stocks. Stoxx 600 -1.3%, DAX -1%, CAC -1.2%, FTSE 100 -1.2%. Financial Services -2.2%,, Technology -2%, Media -1.7%. 

Shares in Asia recorded their biggest decline in over two months after the Federal Reserve dialed back expectations for rate cuts next year. The MSCI Asia Pacific Index
fell 1.6% with TSMC, Samsung and Commonwealth Bank of Australia the biggest contributors to the decline. China erased earlier declines amid expectations the government will maintain a loose policy in 2025.  Bank of Japan held its benchmark rate, with Governor
Ueda saying there’s a need to watch momentum heading into the spring wage negotiations. Shares of Chinese computing-equipment makers rose after the city of Shenzhen introduced subsidies for infrastructure development to boost the artificial intelligence industry.
Kospi -1.95%, Indonesia -1.8%, ASX 200 -1.7%, Thailand -1.5%, Sensex -1.2%, Philippines -1.1%, Taiwan -1%, Vietnam -0.9%, Nikkei 225 -0.7%, Hang Seng Index -0.6%, Singapore -0.4%, Topix -0.2%. CSI 300 +0.1%.

FIXED INCOME: 
 

Treasuries are mixed with the curve steeper as traders continue to digest Wednesday’s market reaction to the Fed policy announcement and revised dot-plot forecasts.
US session focus includes weekly jobless claims and GDP, while 5-year TIPS reopening is due later. 2-year yields richer by around 4bp on the day while 30-year yields rise around 2bp, steepening 2s10s and 5s30s spreads by 6bp and 4bp on the day; US 10-year
yields trade around 4.535%, just off session highs.

 

 

METALS: 

Gold is seeing a partial recovery after tumbling more than 2% in the previous session, triggered by the Federal Reserve’s more cautious tone on the pace of rate cuts
next year. Fed Chair Powell said that while the bank was “on track to continue to cut,” officials would first have to see more progress on inflation.  Spot gold +0.5%, Silver -0.5%, Copper -1.7%.

 

 

ENERGY:   

 

Oil prices fluctuated after the US Federal Reserve signaled that it would slow the pace of interest rate cuts in 2025, potentially impacting fuel demand. The Fed’s
hawkish shift dampened an early rebound in oil prices that had been supported by data that showed lower-than-expected US oil inventories. WTI +0.01%, Brent -0.05%, US Nat Gas +3.8%, RBOB -0.1%

 

 

CURRENCIES: 

In currency markets, the Japanese yen tumbled more than 1% against the dollar after Bank of Japan Governor Ueda offered little indication that he was preparing to
raise interest rates in January, instead signaling that more information is needed on wages and the policies of Donald Trump before making a decision. New Zealand’s dollar reversed an earlier decline on data showing the economy suffered a deeper-than-expected
recession in the second and third quarters as high interest rates curbed demand.  The Norwegian krone rose after its central bank held borrowing costs unchanged at a 16-year high and said the benchmark rate will most likely be reduced in March.  US$ Index
~flat, GBPUSD +0.3%, EURUSD +0.4%, USDJPY +1.3%, AUDUSD +0.5%, NZDUSD +0.5%, USDCHF -0.5%, USDCAD -0.6%.

 

 

 

Spot Bitcoin +1.1%, Spot Ethereum -0.1%.

 

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
    • Block (SQ) Raised to Outperform at Oppenheimer
    • Bread Financial Holdings (BFH) Raised to Overweight at Morgan Stanley
    • C4 Therapeutics (CCCC) Raised to Overweight at Wells Fargo; PT $12
    • Cadence Bank (CADE) Raised to Overweight at Barclays; PT $44
    • Canadian National (CNR CN) Raised to Outperform at Evercore ISI
    • DT Midstream (DTM) Raised to Buy at Stifel; PT $106
    • Fortinet (FTNT) Raised to Overweight at KeyBanc; PT $115
    • Graco (GGG) Raised to Outperform at BNPP Exane; PT $105
    • Hexcel (HXL) Raised to Outperform at RBC; PT $74
    • HP Enterprise (HPE) Raised to Buy at Deutsche Bank; PT $25
    • Kulr Technology Group (KULR) Raised to Buy at Benchmark; PT $5
    • LPL Financial (LPLA) Raised to Buy at TD Cowen; PT $413
    • MannKind (MNKD) Raised to Outperform at RBC; PT $10
    • North West Co (NWC CN) Raised to Outperform at BMO; PT C$58
    • Northwestern (NWE) Raised to Overweight at Barclays; PT $56
    • Okta (OKTA) Raised to Overweight at KeyBanc; PT $115
    • Pinnacle Financial (PNFP) Raised to Overweight at Barclays; PT $135
    • RTX Corp (RTX) Raised to Outperform at RBC; PT $140
    • SentinelOne (S) Raised to Buy at Jefferies; PT $30
    • Stanley Black & Decker (SWK) Raised to Outperform at Mizuho Securities
    • Synchrony Financial (SYF) Raised to Overweight at Morgan Stanley
    • Tapestry (TPR) Raised to Buy at Jefferies; PT $80
    • TD Bank (TD CN) Raised to Outperform at BMO; PT C$90
    • Tegna (TGNA) Raised to Overweight at Wells Fargo; PT $23
    • Zoom Communications Inc (ZM) Raised to Buy at Jefferies; PT $100
  • Downgrades
    • ALX Oncology (ALXO) Cut to Hold at Jefferies; PT $2
    • Brilliant Earth Group (BRLT) Cut to Market Perform at Telsey; PT $2
    • C3.ai (AI) Cut to Underweight at KeyBanc; PT $29
    • Cabaletta Bio (CABA) Cut to Equal-Weight at Wells Fargo; PT $6
    • European Wax (EWCZ) Cut to Market Perform at Telsey; PT $6
    • General Dynamics (GD) Cut to Sector Perform at RBC; PT $290
    • Heico (HEI) Cut to Sell at CFRA
    • Imperial Oil (IMO CN) Cut to Underweight at JPMorgan
    • Micron (MU) Cut to Neutral at BofA
    • Monte Rosa (GLUE) Cut to Equal-Weight at Wells Fargo; PT $11
    • Nice Ltd (NICE IT) ADRs Cut to Hold at Jefferies; PT $200
    • NuVista Energy (NVA CN) Cut to Sector Perform at National Bank; PT C$16
    • Pactiv Evergreen (PTVE) Cut to Sector Perform at RBC; PT $18
    • V2X Inc (VVX) Cut to Sector Perform at RBC; PT $58
    • Viridian Therapeutics Inc (VRDN) Cut to Equal-Weight at Wells Fargo
    • Western Digital (WDC) Cut to Hold at Benchmark
  • Initiations
    • Avalo Therapeutics (AVTX) Rated New Buy at BTIG; PT $40
    • Baker Hughes (BKR) Rated New Overweight at Piper Sandler; PT $53
    • Bruker Corp (BRKR) Rated New Buy at Guggenheim; PT $72
    • Camping World (CWH) Rated New Buy at BofA; PT $30
    • Cartesian Therapeutics (RNAC) Rated New Buy at BTIG; PT $42
    • Commercial Metals (CMC) Reinstated Equal-Weight at Morgan Stanley
    • Crispr Therapeutics (CRSP) Rated New Hold at Clear Street; PT $45
    • Cryoport (CYRX) Rated New Buy at Guggenheim; PT $11
    • Danaher (DHR) Rated New Buy at Guggenheim; PT $275
    • Editas (EDIT) Rated New Buy at Clear Street; PT $4
    • Five Star Bancorp (FSBC) Rated New Outperform at Raymond James; PT $38
    • Halliburton (HAL) Rated New Overweight at Piper Sandler; PT $36
    • Hive Digital Technologie (HIVE CN) Rated New Buy at Roth Capital Partners
    • HUTCHMED China (HCM LN) ADRs Rated New Buy at Daiwa; PT $23
    • Innodata (INOD) Rated New Outperform at Wedbush; PT $48
    • IonQ (IONQ) Rated New Buy at DA Davidson; PT $50
    • Lithium Americas (LAC CN) Rated New Neutral at Wedbush; PT C$7.19
    • Maravai (MRVI) Rated New Neutral at Guggenheim
    • Mirion Technologies (MIR) Rated New Outperform at Baird; PT $22
    • Monro (MNRO) Rated New Outperform at Wedbush; PT $31
    • MSA Safety (MSA) Rated New Buy at DA Davidson; PT $195
    • Neogen (NEOG) Rated New Buy at Guggenheim; PT $15
    • NEXTracker (NXT) Rated New Hold at TD Cowen; PT $41
    • NOV Inc (NOV) Rated New Neutral at Piper Sandler; PT $17
    • Ocular Therapeutix (OCUL) Rated New Buy at Clear Street; PT $19
    • Oklo (OKLO) Rated New Outperform at Wedbush
    • Onestream (OS) Rated New Outperform at Wedbush; PT $40
    • Ormat (ORA) Rated New Neutral at Piper Sandler; PT $78
    • Pennant Group (PNTG) Rated New Equal-Weight at Wells Fargo; PT $33
    • Premium Brands (PBH CN) Rated New Outperform at Raymond James; PT C$100
    • Ranpak (PACK) Rated New Overweight at Cantor; PT $11.50
    • SLB (SLB) Rated New Neutral at Piper Sandler; PT $47
    • SolarWinds (SWI) Rated New Outperform at Wedbush; PT $20
    • Sunnova Energy (NOVA) Rated New Hold at TD Cowen; PT $5
    • Sunrun (RUN) Rated New Buy at TD Cowen; PT $21
    • TechnipFMC (FTI) Rated New Overweight at Piper Sandler; PT $39
    • Tempus AI (TEM) Rated New Buy at Baptista Research; PT $56.40
    • TuHURA Biosciences Inc (HURA) Rated New Buy at Rodman & Renshaw; PT $11
    • Viking Holdings (VIK) Rated New Buy at Citi; PT $54
    • Vizsla Silver (VZLA CN) Rated New Outperform at National Bank; PT C$4.75
    • Weatherford (WFRD) Reinstated Neutral at Piper Sandler; PT $87

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

Categories:

Charts

Tags:

aucldxesngqqqsp500tyusdvixwtiX

Comments are closed