Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Empire Manufacturing, *CPI, Hourly Earnings; 9:20ET Fed’s Barkin speaks; 10:00ET
Fed’s Kashkari speaks; 11:00ET Fed’s Williams speaks; 12:00ET Fed’s Goolsbee speaks; 2:00ET Fed’s Beige Book

US DEC. CORE CPI RISES 0.2% M/M; EST. +0.3%

Highlights and News:  

• TikTok preparing for US shut-off on Sunday, The Information reports
• The IDF and Shin Bet strikes dozens of terrorist targets throughout the Gaza Strip overnight
• Israel, Hamas Trade Accusations for Delaying Gaza Ceasefire Deal
  
• China adds four more US firms to unreliable entity list
• BlackRock CEO Calls Record Client Cash ‘Just the Beginning’
  
• Goldman Sachs Wealth Management Results Smash Estimates
  
• CITIGROUP TO BUY BACK $20B IN STOCK
  

Global stocks grind higher ahead of US consumer price data for December, the main scheduled global economic release of the week. Inflation concerns ease a bit as
UK Dec CPI was weaker than expected, following the weaker PPI print out of the US yesterday. British inflation slowed unexpectedly last month to 2.5% in December from 2.6% in November, while core CPI fell more sharply to 3.2% from 3.5%.  The bond market got
some respite from the recent heavy selling, as yields on US Treasuries ticked lower and German 10-year bunds broke their second-longest stretch of price losses in over 40 years. Germany’s economy shrank for a second consecutive year in 2024, only the second
time since 1950 that output has contracted for two years in a row. Bank of Japan Governor Ueda joined his deputy in strengthening market expectations for a potential interest-rate hike next week, signaling the central bank is doing its utmost to avoid a global
market crash that followed July’s hike.  Meanwhile, sources in Israel are saying the ceasefire deal will be announced tonight or tomorrow morning and the first hostage release will be on Sunday.    

EQUITIES:  

US equity futures climbed as big US banks posted estimate-topping results and investors awaited a crucial inflation print.  BlackRock, Bank of New York Mellon, JPMorgan Chase and Goldman
Sachs beat estimates for the fourth quarter. BlackRock hauled in an annual record of $641 billion in client cash. Goldman shares rose after trading revenues beat across the board. Its equity traders delivered their best year on record. The US will unveil more
regulations to prevent advanced chips from being sold to China, people familiar said. The planned rules, targeting producers including TSMC, Samsung, and Intel, may be announced as soon as today.

Futures ahead of the data: E-Mini S&P +0.4%, Nasdaq +0.4%, Russell 2000 +0.3%, DJI +0.5%.

In pre-market trading, BlackRock (BLK) climbs 3% as total assets stood at almost $11.6 trillion on Dec. 31 and are set to grow this year following a year of dramatic
deal-making. BNY Mellon (BK) rises 2% as 4Q profit, net interest income top expectations. Citigroup (C) climbs 2% after reporting stronger-than-expected Q4 results, with revenue rising across all main business lines. Goldman Sachs (GS) climbs 2% after the
bank cruised past estimates as its equity traders delivered their best year on record. JPMorgan (JPM) rises less than 1% as traders scored their biggest fourth-quarter haul ever. Wells Fargo (WFC) climbs 3% after the bank took a $647 million severance charge
in the fourth quarter, as Chief Executive Officer Charlie Scharf continues to whittle headcount as part of broader efforts to slash costs and remake the bank. Amplify Energy (AMPY) gains 2% after announcing a plan to combine with Juniper Capital’s upstream
Rocky Mountain portfolio companies. Compass (COMP) gains 10% after the residential real estate brokerage boosted its revenue guidance for the fourth quarter. Keros Therapeutics (KROS) falls 16% after the drug developer said it is halting all dosing in a combination
trial of its experimental therapy for patients with a lung disorder.

European gauges gained for the first time in four sessions as investors were heartened by data showing UK consumer prices rose less than forecast in December, keeping
alive hopes of a Bank of England interest-rate cut next month. Shares in Britain jumped at the open, led by gains in rate-sensitive UK homebuilders after data showed an unexpected cooling in British inflation. The ECB will continue lowering interest rates
as the region’s economy struggles to grow, according to Vice President Luis de Guindos. ECB’s Villeroy said it makes sense to cut rates to 2% by summer. The Stoxx 600 is near the highs of the day with real estate, chemicals and retail stocks leading gains. 
Among individual movers, Ubisoft Entertainment SA rose after a report that the French video-game company’s founding Guillemot family and Tencent Holdings are considering creating a new venture. Stoxx 600 +0.6%, DAX +0.8%, CAC +0.5%, FTSE 100 +0.7%. Real Estate
+1.8%, Chemicals +1.4%, Retail +1.3%, Insurance +1%. Personal Goods -0.2%.

Shares in Asia were mostly higher, as a rally in Indonesian shares after a surprise interest-rate cut helped to counter losses in Taiwan and mainland China. The MSCI
Asia Pacific Index gained 0.3%, with Japanese banks among the biggest boosts to the gains given expectations that the Bank of Japan will raise interest rates next week. Chinese equities were mixed, with a gauge of mainland-listed shares declining 0.6% while
Hong Kong benchmarks ticked higher, as investors gauged local policymakers’ efforts to revive the economy. The People’s Bank of China injected a near-historic amount of short-term funds into its financial system today amid a cash squeeze ahead of Lunar New
Year holidays. Chinese electric vehicle stocks mostly fall Wednesday after Morgan Stanley says a price war among China auto makers is likely to start after the Lunar New Year break. Indonesia +1.8%, Thailand +1%, Vietnam +0.6%, Philippines +0.5%, Hang Seng
Index +0.3%, Topix +0.3%, Sensex +0.3%. Taiwan -1.2%, CSI 300 -0.6%, Singapore -0.4%, ASX 200 -0.2%, Kospi was flat.  

FIXED INCOME: 
 

Treasuries hold gains amid a bigger rally in gilts after UK inflation eased more than expected in December. US 10-year yields slipped about four basis points ahead
of the consumer price index report. US yields are richer by 1bp-4bp across maturities with the 5s30s curve steepening by ~1bp and 2s10s flatter by 3bps. IG credit new-issue calendar is dormant with US banking giants beginning to report quarterly results. 
 

METALS: 

Gold edged higher as traders awaited a key inflation report that may offer more clues on the Federal Reserve’s monetary easing path. Bullion traded near $2,685 an
ounce, after climbing 0.5% on Tuesday when a report showed the US producer price index unexpectedly cooled in December. Still, some of its components that also feed into the Fed’s preferred inflation gauge — which is due later in January — were mixed last
month. Spot gold +0.3%, Silver +0.3%, Copper +0.3%.

ENERGY:   

Oil prices tick higher as traders assess updated monthly forecasts from OPEC and the IEA while awaiting official weekly data on U.S. crude and fuel inventories. Global
oil markets face a smaller surplus this year than previously expected amid stronger demand and new risks to supply, the International Energy Agency said. The latest US sanctions targeting Russian and Iranian oil, announced last Friday, could significantly
disrupt Russia’s oil supply chains, the IEA said in its monthly report. World inventories are set to expand by 725,000 barrels a day in 2025, rather than the 950,000 barrels a day previously projected. OPEC forecast another year of steady oil demand growth,
driven by India and China, in its first detailed assessment of 2026. WTI +0.6%, Brent +0.3%, US Nat Gas -2%, RBOB +1.1%. 

CURRENCIES: 

In currency markets, the yen is the notable mover in currency space, rising 0.7% against the greenback after comments from Bank of Japan Governor Ueda and his deputy
strengthened market expectations for a potential interest-rate hike next week.  Sterling fell after the inflation figures were published but then reversed course to be broadly unchanged on the day. The euro erased losses to trade little changed.  US$ Index
-0.1%, GBPUSD -0.01%, EURUSD -0.05%, USDJPY -0.6%, AUDUSD +0.05%, NZDUSD -0.02%, USDCHF -0.02%.

Spot Bitcoin +0.5%, Spot Ethereum -0.3%.   

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
• Adobe (ADBE) Raised to Neutral at BNPP Exane; PT $425
• CareDx (CDNA) Raised to Equal-Weight at Wells Fargo; PT $24
• CBRE (CBRE) Raised to Overweight at Morgan Stanley; PT $160
• Centerspace (CSR) Raised to Buy at Janney Montgomery; PT $72
• Devon (DVN) Raised to Outperform at Bernstein; PT $45
• Digital Realty (DLR) Raised to Buy at Deutsche Bank; PT $194
• Edison International (EIX) Raised to Neutral at Ladenburg Thalmann
• EQT Corp (EQT) Raised to Outperform at Bernstein; PT $73
• Healthpeak Properties (DOC) Raised to Overweight at Morgan Stanley
• KB Home (KBH) Raised to Neutral at Seaport Global Securities
• Macerich (MAC) Raised to Equal-Weight at Morgan Stanley; PT $20
• NNN REIT Inc (NNN) Raised to Overweight at Morgan Stanley; PT $48
• Northwestern (NWE) Raised to Buy at Ladenburg Thalmann; PT $57.50
• Shyft Group Inc/The (SHYF) Raised to Buy at DA Davidson; PT $15
• Stella-Jones (SJ CN) Raised to Outperform at CIBC; PT C$86
• Sun Life Financial (SLF CN) Raised to Outperform at National Bank
• Weyerhaeuser (WY) Raised to Outperform at CIBC; PT $35
• Downgrades
• Aris Water Solutions Inc (ARIS) Cut to Inline at Evercore ISI; PT $27
• Cloudflare (NET) Cut to Hold at CFRA
• Douglas Emmett (DEI) Cut to Neutral at Janney Montgomery; PT $18.50
• Gaming and Leisure (GLPI) Cut to Equal-Weight at Morgan Stanley; PT $53
• Helmerich & Payne (HP) Cut to Inline at Evercore ISI; PT $39
• Intuit (INTU) Cut to Underperform at BNPP Exane; PT $530
• Lam Research (LRCX) Cut to Peerperform at Wolfe
• NNN REIT Inc (NNN) Cut to Neutral at Janney Montgomery; PT $43
• Noble Corp. (NE) Cut to Inline at Evercore ISI; PT $41
• NOV Inc (NOV) Cut to Inline at Evercore ISI; PT $18
• Safehold Inc (SAFE) Cut to Equal-Weight at Morgan Stanley; PT $19
• SentinelOne (S) Cut to Neutral at UBS; PT $25
• SLB (SLB) Cut to Inline at Evercore ISI; PT $44
• Tidewater (TDW) Cut to Inline at Evercore ISI; PT $68
• Transocean (RIG) Cut to Inline at Evercore ISI; PT $5
• Valaris (VAL) Cut to Inline at Evercore ISI; PT $59
• XP Inc. (XP) Cut to Neutral at Grupo Santander; PT $13
• XPO Inc (XPO) Cut to Hold at Stifel; PT $124
• Initiations
• Affirm Holdings (AFRM) Rated New Outperform at William Blair
• Cheetah Mobile (CMCM) ADRs Rated New Accumulate at Guotai Junan Sec
• CNX Resources (CNX) Reinstated Hold at TD Cowen; PT $27
• Curbline Properties Rated New Neutral at Compass Point; PT $24
• Enbridge (ENB CN) Rated New Buy at TD Cowen; PT C$66
• Gibson Energy (GEI CN) Rated New Hold at TD Cowen; PT C$25
• Keyera (KEY CN) Rated New Hold at TD Cowen; PT C$45
• Pembina Pipeline (PPL CN) Rated New Buy at TD Cowen; PT C$66
• SoFi Technologies (SOFI) Rated New Outperform at William Blair
• South Bow (SOBO CN) Rated New Hold at TD Cowen; PT C$34
• TC Energy (TRP CN) Rated New Buy at TD Cowen; PT C$73

Data sources: Bloomberg, Reuters, CQG

David Wienke