Cabrera capital: Daily Game Plan

Monday September 21, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES: 
8:00ET  Fed’s Kaplan speaks; 8:30ET Chicago Fed National Activity Index; 10:00ET Fed’s Evans speaks; 12:00ET Fed’s Williams speaks

The Federal Reserve holds an open meeting on the Community Reinvestment Act at 10:00ET. Fed Chairman Jerome Powell is due to appear before Congressional
committees later this week.

TODAY’S HIGHLIGHTS:

• Trevor Milton out at Nikola Motor
  
  link Nikola Plummets 30%
• TikTok says it already committed to government oversight of U.S. data security –
  
  link
• U.S. faces a smoldering COVID-19 pandemic nationwide as flu season starts
  
  link
• Trump mulling Appeals Court judges Barbara Lagoa, Amy Coney Barrett
  for Supreme Court
• Nikola Plummets 25% After Founder Milton Unexpectedly Resigns As Chairman Amid SEC Probe
• European Banks See Biggest Drop In Months After Massive FinCEN Leak
  
• China’s ByteDance says TikTok will be its subsidiary under deal with Trump
  

Global markets tumbled on Monday, with European stocks falling the most since July as investors worried about tighter virus restrictions and
a report detailing suspicious transactions at international banks. Bank shares are taking a hit this morning after a report published over the weekend pointed to more than $2 trillion in transactions over an almost 20-year period which were flagged as possible
money laundering.   

EQUITIES:

S&P 500 equity futures sank 1.8%, indicating U.S. stocks are poised to extend three weeks of losses. Bank shares are leading losses following
a report detailing suspicious transactions at international banks. JPMorgan Chase was one of the top banks named in the suspicious money laundering report. Market concerns also include covid resurgence fears and the upcoming US elections. The death of Ruth
Bader Ginsberg on Friday has set off a high-stakes battleover whether to fill the vacancy on the Supreme Court ahead of the election.  Nikola Corp. plunged 30% in U.S. pre-market trading. The electric-vehicle startup that recently partnered with General Motors
said its founder stepped down as executive chairman.

December E-mini S&P futures -1.6%,
Nasdaq -1.45%, Russell 2000 futures -2.1%, Dow futures -2%. The settle below the
50dma
was technically negative on Friday and we now look for a possible move towards the
200dma.

QQQ will remain short term negative below its
50dma.
250.50 area is the first key Fibonacci retracement support and target.

Small caps have been outperforming over the last two weeks, but we continue to view the 200dma in IWM versus SPY as pivotal resistance. IWM is
down 2.15% pre-market and has 145.40 area as key s/t support.

In Europe, the Stoxx 600 Index plunged 2.8%, with banks and travel stocks among the worst performers as all 19 industry groups were in the red.
Airlines and travel companies are down sharply as expectations are growing for a reintroduction of restrictions in London. Britain’s Chief Medical Officer Chris Whitty warned on Monday that the nation needed to take the virus “very seriously” for the next
six months amid signs that the spread is accelerating. Germany’s health minister said the trend of cases is “worrying.”  European bank shares are the worst performers after a report by the International Consortium of Investigative Journalists that said lenders
“kept profiting from powerful and dangerous players” in the past two decades even after the U.S. imposed penalties. Shares in Deutsche Bank dropped more than 7.5%, while HSBC fell to a 25-year low. Bank sector -6%, Travel and Leisure -5.5%, Autos -3.8%, FTSE
100 -3.5%, CAC -3.3%, DAX -3.3%

Asian stocks fell, led by materials and finance. Hong Kong shares slid 2%, dragged by financials after reports said HSBC and Standard Chartered
were among banks moving allegedly illicit funds over the past two decades. The Shanghai Composite Index retreated 0.6% and the MSCI Asia Pacific Index slipped 0.7%, with Japan’s markets closed for a holiday. South Korean shares ended 1% lower on concerns over
surging coronavirus cases in Europe and fading U.S. fiscal stimulus hopes.

FIXED INCOME:

U.S. Treasuries advanced as fears over spiking coronavirus cases weighed on stocks and raised concern over the recovery in the global economy.
Risk-off backdrop supports long-end of the curve with 30-year bonds yield down by as much as six basis points, flattening 5s30s by 3.1bp. Auctions this week start Tuesday with $52b 2-year notes, followed by $53b 5-year Wednesday and $50b 7-year Thursday.

METALS:

Gold fell to its lowest in nearly two weeks on Monday hurt by a stronger dollar, while investors looked to U.S. Federal Reserve policymakers’
speeches this week for clues on further stimulus measures to revive the coronavirus-battered economy. Spot gold dropped 1% to its lowest level since September 9th. It seems unlikely that there will be any clarity on how the Fed is going to arrive at its inflation
targets and on monetary policy until at least the end of the U.S. election.

ENERGY:

Oil prices fall after Libya lifts force majeure on some fields. Furthermore, rising Covid-19 cases added to the concerns regarding fuel demand,
however a tropical storm passing towards the US Gulf of Mexico restricted further losses. Oil major Royal Dutch Shell shut some oil production and began evacuating workers from a platform in the US Gulf of Mexico. After being disrupted by Hurricane Sally,
energy producers were in the process of restarting their offshore oil and gas operations over the weekend.

October WTI is holding the 50dma initial resistance for a third straight day. We continue to view the 200dma as closing key. A break below 39.75
area would likely see some downside momentum shift.

November Nat Gas has pivotal support around 1.920/1.950

CURRENCIES:

Sterling was under pressure as headwinds in the banking sector hit investors’ risk appetite, while rising COVID-19 cases prompted Britain to
consider a second national lockdown. The yen hit a six-month high against the dollar, gaining for a sixth consecutive session against the greenback as stock markets tumbled and pushed investors to the perceived safety of the Japanese currency. The US Dollar
Index is up 0.4%.

TECHNICAL LEVELS:
(futures)    

Colors within the report:
Green
is always the 200 period (day, week). Red is always 21,
Blue = 50,
Brown =
100  *Stars have added importance

Equity movers in early trading, as of 7:35am ET:

Advancers

• CRMD +8.2% (+$0.38); CorMedix Rated New Buy at Truist Secs
• OLN +6.6% (+$0.84)
• AXGT +6.6% (+$0.27)
• PIC +6.1% (+$0.74)
• AVDL +5.8% (+$0.34)
• AGRX +5.3% (+$0.20)
• CRDF +3.9% (+$0.34)
• ORCL +3.7% (+$2.21); Oracle TikTok Deal Wins Trump’s Blessing: Deal at a Glance
• CCXX +3.3% (+$0.37)
• GERN +2.6% (+$0.05)
• SBE +2.3% (+$0.33)
• WVE +2.3% (+$0.44)
• FRTA +2.1% (+$0.24); Forterra Raised to Outperform at RBC

Decliners

• HDB -2% (-$0.98)
• XPEV -2.1% (-$0.40)
• AZN -2.3% (-$1.28)
• BTI -2.3% (-$0.79)
• API -2.3% (-$1.11)
• NIO -2.4% (-$0.46)
• AZUL -2.4% (-$0.38)
• PHG -2.4% (-$1.12)
• STOR -2.5% (-$0.71)
• SVC -2.6% (-$0.21)
• APLE -2.6% (-$0.27)
• ERIC -2.7% (-$0.30)
• NKLA -29.8% (-$10.2); NKLA: Nikola Says Trevor Milton Steps Down as Executive Chairman
• LEGN -15.6% (-$5); Genscript Bio Says Chairman Under Residential Surveillance
  • Legend Biotech Names New CFO and Interim CEO
• ACET -13% (-$2.79)
• KODK -12.3% (-$1.49)
• UEC -10.9% (-$0.14); Uranium Energy to Offer Units at $1.20/Unit
• GNFT -10.1% (-$0.48)
• ING -8% (-$0.62)
• CNHI -7.9% (-$0.64)
• THC -7.9% (-$2.23); Tenet Cut to Underweight at JPMorgan; PT $20

David Wienke

Cabrera Capital Markets, LLC