Cabrera Capital: Daily Game Plan

Wednesday September 23, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES: 
9:00ET Fed’s Mester speaks; 9:45ET Markit Manufacturing PMI, Services PMI; 10:00ET Fed Chair Powell testifies on coronavirus; 11:00ET Fed’s Evans speaks; 12:00ET Fed’s Rosengren speaks; 1:00ET Fed’s Kashkari, Bostic speaks, $53b 5-year note Auction; 2:00ET
Fed’s Quarles speaks; 3:00ET Fed’s Daly speaks

Top executives, activists and policy makers gather today for the third annual Bloomberg Equality Summit. The conference kicks off this morning
with a discussion with Dr. Anthony Fauci.

TODAY’S HIGHLIGHTS:

• Chinese state-run media are denouncing the TikTok deal as “an American trap” 
• Anarchists miffed by Trump’s designation of NYC as Anarchist Jurisdiction
  
  link
• Michael
  Bloomberg pays fines for 32,000 felons in Florida so they can vote
  
  link
• Trump to speak to state attorneys general on social media abuses
• Johnson and Johnson is starting a one dose phase 3 trial on 60k adults; Expect To Have Answer If Vaccine Works By Y/E 2020 Or Early 2021
• NYC Health Department has identified a new cluster of COVID-19 cases in Brooklyn
• Secretary of State Michael Pompeo is ramping up his domestic appearances
  before overwhelmingly Republican audiences

World shares are rising with overnight gains of stay-at-home tech companies helping balance concerns that new restrictions to counter resurging
coronavirus infections will hurt the economic recovery. 

EQUITIES:

Futures contracts on U.S. equity indexes jumped, signaling Tuesday’s rebound will be extended after the recent 10% correction in S&P 500 futures.
Investors are waiting on speeches from Federal Reserve Chairman Jerome Powell and other policymakers later in Washington. Powell will appear before the House Select Subcommittee on the coronavirus to discuss the central bank’s response.

Tesla fell 4.8% in premarket trading as the goals announced at Tuesday’s “Battery Day” event disappointed. Tesla was named as a new bearish pick
at Baird; raised to Buy at Deutsche Bank. Nike’s shares were set to open at a record high this morning (+12%) after posting stellar quarterly results, driven by online sales.

December E-mini S&P futures +0.25%,
Nasdaq -0.3%, Russell 2000 futures +0.25%, Dow futures +0.7%. The 50dma
at 3348 in SPX will be key short term resistance, especially on a closing basis. 3366 is the .382 retracement from the September
all-time highs. Use this area to sell into…   

FAANG stocks (as a bucket) hold the key Fibonacci retracement support this week, a positive for the broader market for the most part.

Growth has been outperforming Value this month, even with the correction in the overall market.

The bank sector continues to underperform. Using the .618 retracement in KBWB (bank ETF) as key support

In Europe, the Stoxx 600 Index climbed 1.5%, the biggest gain in two weeks, helped by a jump German stocks after manufacturing data rose to a
two-year high. However, a PMI survey showed euro zone business growth ground to a halt this month as the service industry shifted into reverse, knocked by a resurgence in coronavirus cases that pushed governments to reintroduce restrictions. Auto companies
and travel stocks led the advance in Europe, with gains of 2.8% for both. Adidas jumped 6% and Puma rose 4.5% after US sportswear maker Nike reported strong earnings and forecast better-than-expected sales for 2020. FTSE 100 outperforms, rising as much as
2.5%, CAC 40 +1.9%, Eurostoxx 50 rises 1.7% and the DAX +1.6%.

DAX is positive overall above its 200 day moving average

Asian stocks were little changed, with health care rising and energy falling. Hong Kong shares followed the US rebound to end 0.1% higher, though
persistent concerns about the prospects of fresh Sino-U.S. trade tensions and a slower-than-expected global economic growth capped gains. Indian shares fell for a fifth straight session as surging coronavirus cases fueled investor concerns.  Australian shares
climbed the most in over two months, up 2.4%, as expectations grew that the central bank would cut interest rates in two weeks. The Shanghai Composite Index rose 0.2% following the previous session’s decrease of 1.3%. Only 1 of 5 sectors were higher, led by
industrial stocks.

FIXED INCOME:

Treasuries steadied before Federal Reserve Chairman Jerome Powell and other policy makers speak later in Washington. Treasury yields are slightly
cheaper in early U.S. trading as equity indices rise above Tuesday’s high. Yields are cheaper by about 0.5bp from intermediates to long end with 10-year around 0.675%. The Treasury auction cycle resumes with $53b 5-year note at 1pm ET. IG credit issuance slate
includes Ontario Teachers 3Y, 10Y, Swedish Export Credit $1.25b 3Y, Korea National Oil Corp 5Y, 10Y and TSMC 5Y, 7Y, 10Y.

Fixed income has been outperforming relative to equities shown by the simple asset allocation model (TLT vs SPY), but holding below the 200 day
moving average in the pair is a positive for stocks.

METALS:

Gold slid more than 1% to a six-week low as the dollar extended its rally, while a lack of additional stimulus to aid the recovery of the coronavirus-battered
global economy further weighed on sentiment.

Copper is lower for a second day and we will use the 50dma as key s/t support

ENERGY:

Oil edged up after a report said U.S. fuel inventories fell, although rising crude supply and growing numbers of coronavirus cases that raise
concern of stalling demand capped gains. Official inventory numbers from the Energy Information Administration are due later today. Surging infections in countries including India, France and Spain and new restrictions in Britain have renewed worries about
demand. OPEC faces a new challenge in that Libya, an OPEC member exempt from the supply cut, is aiming to boost supply after an easing of the country’s conflict.

CURRENCIES:

Sterling is having its worst month in four years and extended its fall against the dollar and euro after new long-lasting coronavirus restrictions
in Britain were announced. The Pound dropped as much as 0.5% after Foreign Secretary Dominic Raab said that he cannot rule out a nationwide shutdown before trading little changed. The euro hit a seven-week low on concerns about coronavirus infections and after
the lukewarm European surveys. The dollar rose to an eight-week high after a top Federal Reserve official struck a hawkish tone by mentioning the prospect of raising interest rates. Chicago Fed President Charles Evans said the U.S. economy risked a longer,
slower recovery, if not an outright recession, without another fiscal support package. Evans added that the Fed still needed to discuss its new average inflation target but that it “could start raising rates before we start averaging 2%.”

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

• MNOV +29.1% (+$1.61)
• VTVT +28.3% (+$0.53)
• ACET +24.2% (+$2.46)
• NKE +12.5% (+$14.6); Nike Jumps 13% Premarket; Likely to Open at Record
• GHIV +12.5% (+$1.35); UWM to Go Public Via Merger With Gores Spac: Dow Jones
• WMC +12.2% (+$0.25)
• ATHX +10.7% (+$0.21); Athersys Jumps on MultiStem Cell Therapy’s RMAT Designation
  
• JFIN +7.1% (+$0.23)
• PIC +6.2% (+$0.79)
• DKS +4.9% (+$2.77)
• JKS +4.8% (+$1.33); JinkoSolar Second Quarter Revenue 3.4% Above Estimates
• WDC +4.6% (+$1.68); Western Digital Forms Flash and HDD Technology Units
• SAVA +4.2% (+$0.44); Cassava Sciences Inc Raised to Buy at HC Wainwright; PT $20
• YNDX +3.9% (+$2.57); Yandex Challenges Sberbank With Biggest Russian Deal Since 2017
• UA +3.9% (+$0.37)
• RDHL +3.7% (+$0.39)
• ZI +3.7% (+$1.28); ZoomInfo Raised at Wells Fargo on Valuation After Pullback
• GME +3.7% (+$0.39); Amazon Goes After Peloton Bikes; GameStop Surges: N.A. TMT Wrap
• UNFI +3.3% (+$0.56); United Natural Raised to Buy at Northcoast; PT $25

Decliners

• ACIU -47.5% (-$4.14)
• WVE -29% (-$4.60); WaVe Life Sciences Offering Prices 8.33m Shares at $12/Share
• SFIX -15.6% (-$4.90); Stitch Fix Tumbles as Outlook Saps Enthusiasm After Rally
• GMAB -13% (-$4.97)
• LTHM -7.3% (-$0.61)
• ALB -6.6% (-$6.24)
• SQM -5.8% (-$1.91)
• TSLA -5.6% (-$23.7); Tesla Shares Slide; Analysts Say ‘Battery Day’ Lacked Fireworks
• BLNK -4.6% (-$0.41)
• TLRY -4.4% (-$0.23)
• WKHS -4.3% (-$1.16)
• NSA -3.9% (-$1.35); National Storage to Offer 4.5m Shares via Morgan Stanley, Citi
• CLSK -3.7% (-$0.50)
• PACB -3.6% (-$0.31)
• KBH -2.9% (-$1.18); KB Home Cut to Sector Weight at KeyBanc

David Wienke

Cabrera Capital Markets, LLC