Cabrera Capital Daily Game Plan

Tuesday October 20, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:  
8:30ET Housing Starts, Building Permits; 10:50 Fed’s Quarles speaks; 1:00ET Fed’s Evans speaks; 1:30ET Fed’s Singh speaks; 3:00ET Fed’s Brainard speaks

TODAY’S HIGHLIGHTS:

• Trump tells staff that the Wall Street Journal is "working on an important piece"
• Moderna Chief Executive said the federal government could authorize emergency use of the company’s experimental Covid-19 vaccine in December – WSJ
• McConnell will try to secure a vote today on legislation allowing $500 billion of unused funds from the March stimulus law to replenish the Paycheck Protection
  Program to aid small businesses.
• Google Whistleblower Tells Veritas Search Engine Is "Skewing Results" To Benefit Democrats
• Google Expected to Be Sued by Justice Department Tuesday for Antitrust Violations

Global markets are in a wait and see mode ahead of potential stimulus from the US. Investors are weighing Nancy Pelosi’s deadline of getting
an accord today with the White House for more U.S. pandemic aid against forecasts that say nothing will be approved before the Nov. 3 election. BlackRock Inc. says that the scale of restructuring needs globally could exceed the previous peak that followed
the 2008 global financial crisis.  In the meantime, global coronavirus cases exceeded 40 million, with the pandemic showing no signs of slowing. New cases in Germany and Bulgaria hit a record, and Hungary and Ukraine reported their highest daily virus death
tolls. France reported a massive jump in people hospitalized and Ireland announced some of Europe’s toughest restrictions. Meanwhile, the governments of Japan and China are reportedly close to an agreement to resume business travel.

EQUITIES: 
 It is another big day for earnings with Netflix, Snap, Lockheed Martin Corp. and Philip Morris International among the many
companies announcing results.

U.S. equity futures extended gains after hitting key short term support on Monday as investors clung to hopes for a deal in stimulus talks. 
S&P 500 Index contracts rose as much as 0.7% after a spokesman for House Speaker Pelosi said differences were narrowing in talks.  Today is shaping up as a do-or-die moment for Treasury Secretary Mnuchin and Nancy Pelosi to get a virus relief deal done in
time for Election Day. Areas of division include the scale of assistance to state and local authorities, tax credits Democrats want for lower-income families, liability protections that Republicans are pushing but Democrats oppose, and a repeal of a credit
for past business-tax losses that Republicans want to keep.

December E-mini S&P futures +0.6%,
Nasdaq +0.6%, Russell 2000 futures +0.9%, Dow futures +0.6%. Recent highs will likely be difficult to surpass ahead of the presidential election results. SPX held the key short term Fibonacci retracement support yesterday. A break of this level and settle
below the 50dma (3400) would likely see some downside momentum shift. 3460/61 area is initial key resistance in ES (.382 retrace).

QQQ also held key short term Fibonacci support yesterday

GOOGL is down 0.5% pre-market / The Justice Department will file an antitrust lawsuit Tuesday alleging that Google engaged in anticompetitive
conduct to preserve monopolies in search and search-advertising: WSJ / The Suit Will Also Seek to Break Google's Grip in Search Advertising / At least 10 State AGs Expected to Join DOJ Suit

Over 50% of S&P 500 Banks have reported and the EPS surprise is more robust among small caps as the beat rate for the Russell 2000 Banks is 48%.
More banks are reporting earnings today.

Valuation concerns have been the near-term driver. The NYSE FANG+ Index has fallen for three straight days, but holding above the
50dma,
short term key support.

European equities fluctuated after a string of positive earnings.  Logitech surged as much as 22% to a record high after the tech hardware maker
raised its sales forecast. UBS gained after the Swiss bank’s profit beat estimates, posting a 99% jump in quarterly profit. Oil & gas, miners and healthcare names underperform. Record COVID-19 cases in Europe weighed on sentiment. Basic Resources -0.7%, Energy
and Healthcare -0.5%, Technology -0.4%, DAX -0.2%, Stoxx 600 flat, Bank sector gains 2.3%.

Markets in the Asian region were mixed, with South Korea's Kospi and China's Shanghai Composite gaining, while Japan's Topix and Australia's
ASX 200 slid. The Topix lost 0.7%, with SoftBank and Nintendo contributing the most to the decline. China shares ended higher in a relatively tepid session, as optimism over recovering consumption lifted the Shanghai Composite Index 0.5%, though data showed
a slowdown in new home price growth. Consumer staples firms jumped 2.35%, powered by breweries and distillers while real estate firms shed 0.8%.

FIXED INCOME: 
 

Treasuries are lower with the curve steeper in early U.S. trading as front-end yields remain anchored. Risk appetite stirred during the Asia
session, weighing on fixed income. All eyes on whether Washington can decide on a fiscal stimulus and whether it will be successfully placed before the elections.

METALS: 

Spot Gold prices were stable as investors awaited signs of whether a new U.S. coronavirus stimulus package will be forthcoming before next month's
presidential election. The lower dollar is lending support to gold by making the metal less expensive for holders of other currencies.

December Copper futures are up 1% and likely to retest the pivot pt. resistance.

ENERGY:  

Oil prices fell on worries that a resurgence of coronavirus cases globally is stifling a recovery in fuel demand while growing Libyan output
adds to already plentiful supply. Monday’s meeting of a ministerial panel of OPEC+ pledged to support the oil market, but for now is sticking with a deal to curb output by 7.7 million barrels per day to the end of the year and then increasing production by
2 million bpd in January.

CURRENCIES:  

The euro rebounded to a one-week high as global stocks recovered from early losses with investors broadly in consolidation mode before the U.S.
presidential election. The pound wavered versus the euro after the U.K. held out for additional European Union concessions as a condition for resuming trade talks. The Australian dollar slid after comments from the central bank’s assistant governor that short-term
rates could fall below zero. The US dollar index is lower for a third straight day, down 0.25%, and has 92.890 area as short term key support.

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

• APTX +100.8% (+$3.69); Aptinyx Soars 70% After PTSD Trial Has Positive Outcome
• UXIN +21.8% (+$0.26)
• CARA +17.1% (+$2.38); Cara Jumps After U.S. Pact With Vifor Pharma for IV Korsuva
• PE +10.4% (+$1.05); Pioneer Said to Be in Talks to Buy Rival Shale Driller Parsley
• HTZ +10.1% (+$0.22); Hertz Names New Chief Accounting Officer
• MREO +9% (+$0.23)
• OESX +7.6% (+$0.57)
• PLAY +6.6% (+$1.14); Dave & Buster’s Upgraded at BMO Following Liquidity Raise
• RIOT +5.8% (+$0.19)
• CRSR +5.6% (+$1.13); Corsair Gaming Rated New Outperform at Wedbush
• FTI +5.2% (+$0.36)
• IVA +4.7% (+$0.65)
• NLS +4.7% (+$1.13)
• IHG +4.4% (+$2.35)
• RYAM +4.4% (+$0.18); Rayonier Advanced Raised to Outperform at RBC
• RYAAY +4.3% (+$3.58)
• AVXL +4.3% (+$0.22)
• CUK +3.9% (+$0.47)

Decliners

• KXIN -22.1% (-$1.80)
• AMC -4.8% (-$0.17); AMC Entertainment Prelim Third Quarter Revenue Misses Estimates; company says it may need to reorganize debt if liquidity
  sources are not available
• SSL -4.2% (-$0.26)
• CVNA -3.5% (-$7.47); Principal SmallCap Exits Carvana Class A
• IBM -2.8% (-$3.52); IBM Analysts Advise Patience Ahead of Spin Off: Street Wrap
• FUBO -2.5% (-$0.30)
• DKNG -2.2% (-$0.98)

David Wienke

Cabrera Capital Markets, LLC