Cabrera Capital Daily Game Plan

Friday March 12, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES   
8:30ET Producer Price Index final;  10:00ET UofM Consumer Sentiment preliminary; 2:00ET  Biden speaks on American Rescue Plan

TODAY’S HIGHLIGHTS:   

• The rate of new COVID19 cases in every region of England is continuing to fall
• Mexico passed landmark legislation to legal marijuana ending 100 years of prohibition
  
• Biden offered a Fourth of July goal for US to begin returning to normal
  
• Andrew Cuomo faces an impeachment inquiry
  

 A fresh bout of bond volatility hit global markets, sparking a risk-off mood that sent technology stocks sharply lower. All eyes are on yields
as European debt dropped after authorities were said to have no intention of expanding stimulus despite their pledge to keep yields in check. The mood in equities soured Friday after Bloomberg reported that Tencent Holdings was censured by China’s antitrust
watchdog. The conglomerate was dealt an antitrust fine that marks the beginning of a campaign of tougher regulation. A resurgence of the virus in Italy coupled with division over AstraZeneca’s Covid-19 vaccine also hit sentiment. Meanwhile, the vaccine shortage
persists in Europe.  Data showed the UK economy shrank less than expected during the January lockdown, driven by construction and the health sector. GDP fell 2.9%, versus consensus for a 4.9% contraction. But Brexit hammered UK trade with the EU, with exports
falling almost 41% month on month, while imports from the bloc dropped 29%.

EQUITIES: 
  

US stock index futures fell overnight, with Nasdaq 100 contracts dropping as much as 2%, amid worries over a renewed rise in Treasury yields.
Meanwhile, the US tightened restrictions on selling 5G-related goods to Huawei Technologies, explicitly banning export of components like semiconductors, antennas and batteries.  Stocks have broadly rallied this week following a rebound in technology shares
and growing appetite for sectors like banking and energy that may benefit from the economy rebounding. Futures are mixed ahead of the US open, with small caps and Dow futures in the green.  The focus now turns to today’s producer-price data and the Federal
Reserve decision next week.   

E-mini S&P futures -0.2%, Nasdaq -1.25%, Russell 2000 futures +0.25%, Dow futures +0.3%

The yield-sensitive group of Facebook, Apple, Amazon, Netflix, Alphabet, Tesla, and Microsoft were down between 1% and 4% in premarket trading. 
 

Consumer Staples underperforming Consumer Discretionary this week. Using the 200 day moving average in XLP vs XLY as pivot pt resistance.

European shares slipped from a one-year high as a rise in bond yields in Europe and the US fueled an exit from risk assets.  Europe’s Stoxx 600
Index was 0.4% lower, with technology the biggest declining sector on a report that China is expanding a crackdown to Tencent Holdings raised concerns about an escalation to curb the influence of tech moguls. Banks bucked the trend, rising 1.6%. Among notable
movers, Burberry Group jumped as much as 10% after the British retailer forecast fiscal 2021 revenue would come in ahead of expectations. UK homebuilder Berkeley Group dropped 6% as it expects the value of its sales reservations to drop this year. German carmaker
Daimler declined 2.5% after French rival Renault sold its entire stake in the company at a discount.  Autos -1.2%, Media -1%, Basic Resources -0.9%.  FTSE 100 -0.1%, CAC -0.15%, DAX -0.65%, Stoxx 600 -0.55%.

Indices in the Asian region were mixed, with benchmarks in Japan and South Korea leading gains, while Hong Kong’s Hang Seng Index led losers,
-2.2%, weighed by weakness in tech firms and worries about the latest Sino-US tensions.  On Thursday, the US condemned Chinese moves to change Hong Kong’s electoral system and forecast “difficult” talks with Beijing’s top diplomats next week. China again warned
the US to stop interfering in its affairs, a foreign ministry spokesman said. SoftBank Group (+3.35%) led the Nikkei 225 after Coupang, in which SoftBank is a key investor, rose 41% in its US trading debut. Coupang partners and suppliers showed mixed performance. 
Indian shares gave up early gains to end 1% lower, as high-flying financial stocks sold off. The MSCI Asia Pacific Financials Index declined as AIA Group lost more than 5%.  The Shanghai Composite Index rose for the second day, climbing 0.5%, with all sectors
gaining. China’s market regulator said it had imposed fines on twelve companies, including Tencent, Baidu, Didi Chuxing and Japan’s Softbank.

FIXED INCOME: 
                                       

Treasury futures were heavy from the overnight open as late pricing of Verizon’s $25b deal weighed. 10-year Treasury yields surged as much as
eight basis points to 1.615%, reminding investors that bond volatility has become the companion of go-big fiscal stimulus. Bets that extra government spending could overheat the economy were out in full force after President Biden signed off on $1.9 trillion
of stimulus. Treasury holdings at primary dealers dropped by a record $64.7 billion in the week through March 3, leaving them at the lowest since 2018, according to Fed data.

METALS: 

Gold fell more than 1% after a rebound in bond yields and the dollar index sent the metal back towards 9-month lows hit earlier in the week. 
Gold pared its weekly advance as ETFs sold bullion for a 19th day.

ENERGY:  

Oil prices retreated as the dollar gained, with WTI crude dipping 0.4%. Indian oil product demand slid y/y in February, while Saudi Arabia cut
allocations to some Asian and European buyers.

CURRENCIES:  

The US dollar index rose 0.55%, recovering its losses from yesterday on soft CPI data, as a spike in Treasury yields early in the European session
triggered a risk-off move in global currency markets.  The pound fell the most in a week after data showed the UK economy shrank in January, with exports to the European Union dropping 41% from the previous month. Market attention now turns to the US Federal
Reserve’s meeting next week, where traders will be looking for any comments about rising yields.

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 7:35ET:

Advancers

• SEEL +32.9% (+$1); Seelos Rallies After BTIG Initiates With Street-High Target
• CFRX +19.5% (+$1.24); ContraFect Soars After Winning U.S. Contract for Exebacase Study
• ​​​​​​NVAX +16.7% (+$31.3); Novavax Jumps After Study Shows Vaccine Effective Against Covid
• TRCH +15.8% (+$0.43)
• CCRC +14.1% (+$0.79)
• MBII +12.7% (+$0.32)
• DBVT +12.2% (+$0.64)
• III +11.8% (+$0.46)
• AEGN +11.5% (+$2.98); Apollo Is Said to Bid for Aegion After New Mountain Buyout Deal
• FNKO +10.2% (+$1.57); Funko 4Q Adjusted EPS Beats Estimates
• ALT +9.4% (+$1.58); Altimmune Jumps in U.S. Premarket on Lonza AdCovid Pact
• DS +8.3% (+$0.22); Drive Shack Jumps After Reporting Fourth Quarter Earnings
• MVIS +8.2% (+$1.22)
• KOSS +7.1% (+$1.78); Koss Short Interest Rises to 59.9% of Float
• AVEO +6.6% (+$0.78)
• ERII +6% (+$1.14)
• LB +5.6% (+$3.15); L Brands 936,100 Share Block Trades at $55.85
• GOEV +5.5% (+$0.80)
• LC +5.1% (+$0.65)

Decliners

• MRKR -24.5% (-$0.62); Marker Falls Postmarket After Offering Shares via Piper Sandler
• EVOK -23.5% (-$0.73); Evoke Pharma Tumbles After Diabetes Drug Sales Miss Estimates
• POWW -14.5% (-$0.98); Ammo Offers Shares via Roth Capital Partners, Alexander Capital
• FINV -14.1% (-$1.38); FinVolution Group Rises 93%: Chinese U.S. Listings
• POSH -12.6% (-$7.49); Poshmark Price Targets Cut After Sales Outlook Miss: Street Wrap
• SLGG -11.2% (-$0.77)
• LGVN -10.4% (-$0.88)
• MNOV -9.5% (-$0.67)
• ULTA -8.2% (-$28.6); Ulta Beauty CEO Plans Shock Analysts as Shares Drop: Street Wrap
• CHPT -8.2% (-$2.49)
• OCUL -6.9% (-$1.41); Ocular Therapeutix 4Q Revenue Misses Estimates
• PUBM -6.7% (-$3.81)
• BTBT -6.7% (-$1.22)
• VIOT -6.6% (-$0.88)

David Wienke

Cabrera Capital Markets, LLC