Cabrera Capital Daily Game Plan

Tuesday March 30, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES  
9:00ET  Case-Shiller national home price index, Fed’s Quarles speaks; 10:00ET Consumer confidence index;
2:00ET Biden signs PPP Extension Act;  2:30ET Fed’s
Williams speaks

TODAY’S HIGHLIGHTS:   

• The WHO study on the origins of coronavirus is out today
• Biden To Float $3 Trillion Plan Wednesday As Moderate Dems Push Back On Tax Hikes To Pay For It
• PayPal launches crypto checkout service
• Google’s Maps will start directing drivers to routes estimated to generate the lowest carbon emissions
• CDC warned the US may face an impending coronavirus surge

Global stock markets rose as investors shook off worries about a hedge fund default that hit international banking stocks, as volumes remain
light ahead of the shortened week. Japan's biggest lender, Mitsubishi UFJ joined a growing list of global financial firms as it warned of a potential $300 million loss tied to a US client.  Nomura and Credit Suisse are facing billions of dollars in losses
and regulatory scrutiny after Archegos Capital defaulted on equity derivative bets. On the virus front, the head of the US CDC warned of “impending doom” as coronavirus cases rise, mirroring a pattern from Europe a few weeks ago.  

EQUITIES: 
  BioNTech, Blackberry. Chewy, Lululemon Athletica are among the companies reporting earnings.

US index futures edged lower, with Nasdaq leading losses, as tech companies struggle under the weight of higher treasury yields. Traders are
also assessing the fallout from the implosion of Archegos Capital Management. Viacom CBS, Discovery, and the American Depositary Receipts of Chinese companies linked to the Archegos block trades posted modest gains in pre-market trade. Archegos' total positions
may have topped $50 billion, so there may be some time before this unwind is over.  American Airlines rose 1.2% after an upgrade from Jefferies, and expects to put most of its fleet back in service in the second quarter on signs of a travel rebound. Biden,
in a speech tomorrow, will detail a mass expansion of government spending aimed to reducing inequality and strengthening infrastructure. A revamp of the tax code is also part of the plan and is already proving divisive among economists and lawmakers.

E-mini S&P futures -0.3%, Nasdaq -0.65%, Russell 2000 futures -0.2%, Dow futures -0.05%.  SPX has 3931 as initial support and will be negative
early below 3961.

US banks are bracing for new SEC enforcement disclosure rules in the aftermath of the Archegos block-trade frenzy.  Wall Street buzzing about
whether Credit Suisse CEO Thomas Gottstein will survive losses ties to Archegos after losses the bank incurred earlier due to the implosion of Greensill Capital.

The rotation into value stocks continues on recovery expectations while tech companies struggle under the weight of higher Treasury yields.

Consumer Discretionary sector remains negative relative to the broader market with XLY/SPY holding below the 200dma in the pair.

European shares headed towards record highs on hopes of a vaccine-driven economic recovery, while investors looked past the fallout of a US hedge
fund default that hit banking stocks a day earlier.  The Stoxx 600 extended its highest level in 13 months as the momentum swung in favor of cyclical stocks such as banks, autos and miners. Banks were the biggest gainers after Monday’s slump which was fueled
by the Archegos debacle. The banks’ subgroup index rose 1.95%, followed by a 1.45% jump in automakers and travel shares. Energy stocks were up by 0.7% as traders looked ahead to this week’s OPEC+ meeting after the reopening of the Suez Canal. Utilities (-1.1%)
suffer from the move in yields as Healthcare (-0.3%) and Telecom’s (-0.1%) are the only other sectors trading lower. The German DAX rose 0.7% to a record high, boosted by automakers and a 2.0% rise in Deutsche Bank.  Stoxx 600 +0.3%, CAC +0.45%, FTSE 100 +0.15%. 

Equity indices in Asia were mixed, with losses in Japan and some Southeast Asian markets offsetting a rally in China and South Korea. Stocks
in Indonesia (-1.55%) and the Philippines were the biggest losers in the region. The Topix declined 0.8%, as a majority of stocks on the index traded without rights to their next dividends. Nomura Holdings extended losses after plunging by a record 16% on
Monday, when the brokerage said it may have incurred a “significant” loss arising from transactions with a US client. Japanese department store shares rose after data showed February sales easily beat estimates, and  Japan's jobless rate stayed at 2.9%, beating
estimates. Meanwhile, stocks in China, Hong Kong and South Korea and India rallied, with the Shanghai Composite and CSI 300 Index gaining for a third day after holding key support at their 200 day moving averages. Hong Kong’s Hang Seng Index gained 1.2%, driven
up by a rebound in the city’s tech stock index.

FIXED INCOME: 
                                       

The worst quarter for U.S. Treasuries since 2016 is coming to a close. Treasury yields rose with stocks as President Biden’s spending plans and
ramped-up vaccine efforts stoked bets for a quicker economic recovery. Ten-year Treasury yields rose to 1.77%, and the five-year rate hit its highest point in 13 months, before Biden unveils a further $3 trillion of stimulus tomorrow.

METALS: 

Gold prices slid 1.4% as the dollar climbed on the back of higher Treasury yields and as expectations that speedy vaccinations would improve
the economic outlook curbed demand for safe-haven metal. A longer-term headwind comes from the sell-off in exchange-traded funds, which have seen outflows on every day but one in the last six weeks. The 50/200dma Death Cross is a technical negative for gold,
and silver is breaking below its 200 day moving average.

ENERGY:  

Oil slipped from a two-day rally before the April 1 meeting of OPEC+, with speculation that renewed demand concerns will push the group to keep
production in check. Overnight, source reports confirmed as much with Saudi Arabia reportedly prepared to support extending oil cuts by OPEC+ into May and June as global oil demand is not yet high enough to warrant more oil supply. However, reports from Saudi
sources this morning noted that it was premature to assume this outcome. Meanwhile, the Suez Canal reopened to traffic after the container ship that was blocking the waterway was tugged free. Authorities in Egypt said it will only take days to move the backlog
of vessels waiting to cross the channel. Brent is 1.4% lower.

CURRENCIES:  

In currencies, the dollar rose to its highest in a year against the yen, boosted by the spike in Treasury yields. The US Dollar Index rose for
a second day, and five of the last six. The dollar index jumped its highest level since November on expectations of stronger growth and inflation ahead of President Biden's multi-trillion-dollar infrastructure spending plan.  The Swiss franc has tumbled 6%
this quarter against the dollar, the most since the Swiss National Bank discontinued its minimum exchange-rate arrangement.  The focus for commodity linked currencies will be on the OPEC+ meeting, where it is expected that production quota’s will be rolled
over.  

US Dollar Index remains positive short term above its 200 day moving average.

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

• MBRX +17.8% (+$0.66); WPD Pharmaceuticals Announces Amended Sublicense Agreement with Moleculin Biotech for WP1066, WP1122 and Annamycin Drug
  Candidates
• ABCL +13.2% (+$3.07); AbCellera Revenue Beats Estimate on Covid Antibody Royalties
• NOVN +9.5% (+$0.13); Novan CEO Stafford Buys Over $100,000 of Shares
• GSX +7.8% (+$2.47); GSX Techedu Rises as CEO to Use Own Fund to Buy $50m Shares
• KOSS +7.3% (+$1.55)
• TKAT +7.1% (+$2.18)
• BNTX +6.9% (+$6.65); BioNTech Rises After Boosting 2021 Covid Vaccine Dose Target
• NCTY +6.9% (+$2.50)
• IMTX +6.5% (+$0.77)
• CAN +6.1% (+$1.07)
• QIWI +6.1% (+$0.63); Qiwi Board Recommends Andrey Protopopov as New CEO
• QELL +5.6% (+$0.56)
• VIPS +5.3% (+$1.51); Vipshop Holdings Jumps on $500m Share Buyback Plans
• AACG +5.3% (+$0.23)
• AMRN +5.1% (+$0.31); Amarin Gets EC Approval for Vazkepa

Decliners

• WVE -26.7% (-$1.89); Wave Life to Stop Development of Two Treatments; Shares Fall
• UPC -15.7% (-$0.88); Universe Pharmaceuticals Rises 38%: Chinese U.S. Listings
• TDUP -12.7% (-$3.99)
• EEIQ -10.3% (-$1.91)
• DNMR -9.8% (-$3.61); Danimer Scientific Announces Fourth Quarter Results
• HOFV -7% (-$0.47)
• EC -6.7% (-$0.86)
• BFLY -6.6% (-$1.20); Butterfly Network Sinks After 2020 Net Loss Widens
• OCG -5.9% (-$0.48)
• GOEV -5.4% (-$0.64)
• GFI -4.9% (-$0.48)
• SPI -4.7% (-$0.33)
• SURF -4.4% (-$0.35)
• HOL -4.1% (-$0.55)
• HIMX -4% (-$0.46)
• CMLF -3.8% (-$0.52)
• AMTX -3.8% (-$0.80)
• AU -3.5% (-$0.79)
• ARVL -3.2% (-$0.61)
• BLUE -3% (-$0.94)

UPGRADES:

• Alphabet (GOOGL) raised to buy at Stifel; PT $2,350
• American Air (AAL) raised to hold at Jefferies; PT $25
• Calibre Mining (CXB CN) raised to outperform at BMO; PT C$2.50
• DXC Technology (DXC) raised to buy at Deutsche Bank; PT $44
• Ecolab (ECL) raised to buy at Deutsche Bank; PT $250
• Gilead (GILD) raised to buy at Redburn
• Roku (ROKU) raised to buy at Truist Secs; PT $367
• Texas Capital (TCBI) raised to outperform at KBW; PT $86

DOWNGRADES:

• CNX Resources (CNX) cut to hold at Truist Secs; PT $16
• Santander Mexico ADRs (BSMXB MM) cut to hold at HSBC; PT $6.50

David Wienke

Cabrera Capital Markets, LLC