Cabrera Capital Daily Game Plan

Thursday October 15, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:  
8:30ET Weekly Jobless Claims, Philly Fed Index, Empire State Index; 9:00ET Fed’s Bostic speaks; 10:10ET Fed’s Bullard speaks; 11:00ET Fed’s Quarles, Kaplan speak; 2:00ET Fed’s Barkin speaks

Weekly initial jobless claims at 8:30 a.m. are expected to show only a small improvement on recent trends.

TODAY’S HIGHLIGHTS:

• US Offers Tariff Truce If Airbus Repays Billions In Aid – RTRS
  
• New daily Coronavirus cases are now averaging over 52,000 per day. It was 34,000/day a month ago.
• WHO Europe Director Says Governments Should Stop Enforcing Lockdowns, “absolutely necessary”
• Wells Fargo fired more than 100 employees suspected of improperly collecting coronavirus relief funds
• Biden Raises $383 Million in September, Breaking Monthly Record
  
• Biden campaign video calls President Donald Trump a “super spreader.”
• Treasury Secretary Mnuchin said yesterday that "getting something done" on stimulus before the election "would be difficult."

Global stocks sank as Europe’s biggest cities clamped down to curb the virus and hopes wilted for new stimulus from Washington. Urging governments
to “step up” swiftly to contain in a second wave of the coronavirus pandemic, the WHO’s European director Hans Kluge said the current situation was, “more than ever, pandemic times for Europe”. New infections are hitting 100,000 daily in Europe, with the region
registering the highest weekly incidence of COVID-19 cases since the beginning of the pandemic. Londoners will be banned from mixing with other households indoors starting this weekend as leaders struggle to cope with record new cases around the region. French
President Macron will confine residents of nine of the country’s biggest cities to their homes between 9 p.m. and 6 a.m. for four weeks.

EQUITIES: 
 Earnings: WBA, SCHW, TACO, Morgan Stanley Q3 Earnings EPS $1.59 (Est $1.28) / IPO Calendar today: ARRAY TECHNOLOGIES (ARRY),
MINISO Group Holding (MNSO)

U.S. stocks are facing a third declining session unless earnings from Morgan Stanley and Charles Schwab somehow manage to spark optimism. Nasdaq
100 futures were hit worst, sliding 1.6%. The largest losers in the pre-market included Tesla, Moderna and DocuSign. A barrage of policy and economic shifts will temporarily put an end to the outperformance of U.S. technology stocks and instead lift laggards
such as banking and auto shares, according to strategists at Goldman Sachs.

December E-mini S&P futures -1.1%,
Nasdaq -1.5%, Russell 2000 futures -1%, Dow futures -1.1%. E-Mini S&P has initial short term support at the .382 retrace from the September low (3410 area). A break of this level would likely extend lower to 3329.  

VIX has some room before it would retest its 200dma (s/t pivot)

IWM vs SPY continues to hold the 200 day moving average in the pair (closing key) as small caps try to hold onto recent outperformance

Value continues to underperform growth, but holding above the July lows in Value vs Growth

European equities endured heavy losses throughout the session as markets contemplate a disappointing Q4 growth landscape with lockdown measures
tightened once again. The virus toll in Europe continues to rise, with both Germany and Italy reporting record numbers of new infections.  German Chancellor Merkel cautioned that tougher lockdown measures might be required. The Stoxx Europe 600 Index headed
toward its biggest drop in three weeks, down 2.3%, after disappointing earnings from Swiss drug maker Roche Holding and oil producer Total SE started the day off to the downside. Eurostoxx 50 drops as much as 2.9% before stabilizing near the lows while the
DAX underperforms having dropped as much as 3.3%. Autos, oil & gas and banks are the worst performers as all sectors are negative. At 7:00ET DAX -2.6%, Stoxx 600 -2%, CAC -2.1%, Autos -3.1%, Energy -3%, Banks -2.85%.

A settle today back below the 200dma in Stoxx 600 would be a negative technical sign.

Asian stocks fell, led by communications and health care.  Most markets in the region were down, with Hong Kong's Hang Seng Index dropping 2.1%
and India's Sensex Index falling 2.6%, while Australia's ASX 200 gained 0.5%. Hong Kong stocks fell the most in more than three weeks, with tech shares leading losses. Alibaba Group slid 4.3%, the most since July, after Reuters reported the U.S. is seeking
to blacklist its affiliate Ant Group. The MSCI Asia Pacific Index dropped 1.2% while Japan's Topix index closed 0.7% lower.  The Shanghai Composite Index fell for the second day, dropping 0.3%.

FIXED INCOME: 
 

Treasuries are higher led by long end, following a bigger advance for bunds on haven demand as Covid-19 cases rise in Europe. Yields lower by
0.5bp to 4bp across the curve with 2s10s curve flatter by nearly 2bp, 5s30s by ~2.5bp. Focus remains on fading chances of an agreement on economic stimulus legislation.

TLT up another 0.67% in pre-market trade.

METALS: 

Gold fell as the dollar gained after U.S. Treasury Secretary Mnuchin dimmed hopes for a new fiscal stimulus package before the Nov. 3 presidential
election. Spot gold fell 0.5%. Barrick Gold Corp on Thursday estimated a 10.8% drop in third-quarter gold production as the miner's Porgera project in Papua New Guinea remained shut. Market participants are also keeping a close eye on developments in ongoing
Brexit negotiations as a two-day summit of European Union leaders begins today.

Gold futures holding within two key Fibonacci retracements for now…

ENERGY:  

Oil dipped below $40 a barrel as the dollar gained and stock markets slumped. Oil-market sentiment had improved this week amid some positive
signals on consumption from Asia. But the likelihood of drastic curbs on movement being reintroduced in some of Europe’s largest cities has fueled demand fears.  OPEC Secretary General said oil demand is still anemic and isn't recovering as quickly as expected
but added the alliance will ensure oil prices do not plunge steeply again. U.S. inventory data due later today could be a bright spot, with the API reporting a 5.4 million-barrel weekly decline in crude stockpiles.

Crude oil continues to find key short term resistance around the 200 day moving average(s)

CURRENCIES:  

The dollar rose as a risk-off mood took hold after Germany warned that the nation is facing a broad second wave of the virus. Treasury Secretary
Mnuchin said he and Democratic lawmakers were "far apart" on terms for a coronavirus economic relief package, and that a deal would be hard to reach before the election, souring risk sentiment and pushing investors to seek safety in the dollar. The Australian
dollar dropped 1.1%, to a one-week low after the head of the central bank hinted of a possible rate cut or bond purchases. The Pound fell 0.5% as traders waited to see whether a meeting of European Union leaders in Brussels would signal any progress in troubled
Brexit talks. Many investors figure that even if a deal is reached, it will be a limited one. Goldman Sachs said in a note on Thursday that a thin Brexit trade deal was likely to be struck by early November.

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

• SPI +42.6% (+$3.06)
• AVXL +29.5% (+$1.28)
• ORGO +26.5% (+$1)
• CARS +16.1% (+$1.29); Cars.com Prelim Third Quarter Revenue Beats Estimates
• NK +7.7% (+$0.70)
• GRFS +6.3% (+$1.15)
• SNBR +6.1% (+$3.55); Sleep Number Third Quarter EPS Beats Estimates
• GOSS +4% (+$0.38)
• FUBO +4% (+$0.37); FuboTV Chairman Bronfman Buys $2 Million of Shares
• CLVS +3.2% (+$0.19)
• LTRX +3% (+$0.15)
• WBA +2.3% (+$0.84); WBA 4Q US Retail Pharmacy Comp Sales Beat Est.: Snapshot

Decliners

• KXIN -31.8% (-$0.63)
• FSLY -28.2% (-$34.7); Fastly Prelim Third Quarter Revenue $70.0 Mln to $71.0 Mln
• VVPR -19.9% (-$2.29); VivoPower International Offering Prices 2.94m Shrs at $8.50/Shr
• VRTX -9.7% (-$26.5); Vertex Sinks After Shuttering Work on Rare Lung-Disease Drug (1)
• INFY -7.4% (-$1.21)
• CVAC -6.3% (-$3.42)
• NET -6.3% (-$3.90)
• CLLS -6.2% (-$1.37)
• AA -6.2% (-$0.80); Alcoa’s 4Q Guidance Weighs on Stock Despite Beating 3Q Estimates
• BE -6% (-$1.25); BLOOM ENERGY HOLDER CANADA PENSION SAID TO OFFER 12.3M SHARES
  
• CUK -2.1% (-$0.25)
• VALE -2.1% (-$0.24)
• VOD -2.2% (-$0.31)
• RYAAY -2.2% (-$1.90)
• RIO -2.2% (-$1.35)
• GSK -2.2% (-$0.83)
• BABA -2.4% (-$7.14); Taobao Taiwan to End Operations After Fine From Regulator: UDN
• ASML -2.4% (-$9.53)

David Wienke

Cabrera Capital Markets, LLC