Thursday November 4, 2021 Trading
Desk: (312) 236-8907
TODAY’S GAME PLAN: from
the trading desk, this is not research
8:30ET Weekly Jobless Claims, Trade Deficit, Productivity, Unit Labor Costs
Bank of England rate decision was unchanged, vote 7-2
China rapidly accelerating expansion of its nuclear stockpile; Pentagon’s annual report to Congress
World’s largest community of 3D-printed homes to break ground next year in Austin, Texas –
UK first to authorize Merck antiviral pill, first shown to treat COVID
Election Investigation Launched in New Jersey Governor’s Race: 56 Voting Machines Went Down Without Counting Votes
SpaceX toilet leak will force NASA astronauts to wear diapers…
World stocks hit a record high after US Fed policy makers reaffirmed they’re in no hurry to raise benchmark rates even though inflation may run
hot for months. The European Central Bank also signaled on Wednesday that it was in no hurry to tighten policy. Traders waited to see if the Bank of England would be the first major central bank to raise interest rates since COVID hit. For investors looking
for signs that the global semiconductor shortage is nearing an end, Qualcomm offered some hope, after the company posted better-than-expected quarterly results and delivered an upbeat forecast. Qualcomm has farmed out production of certain products to multiple
manufacturers, helping ensure it has enough supplies.
US stock index futures hovered around record highs as traders were relieved with the Fed’s taper decision yesterday. Equity indices climbed
to a fresh record high after the Fed comments, pushing its gain for 2021 to 24%. Technology stocks are back in favor, with Qualcomm (QCOM +8%) leading pre-market gains on earnings beat and upbeat guidance.
E-mini S&P futures +0.2%, Nasdaq +0.4%, Russell 2000 futures +0.35%, Dow futures +0.05%.
Fastly (FSLY) jumped 11% after the infrastructure software maker reported quarterly revenue that surpassed estimates. QuinStreet (QNST) climbs
21% as the online marketing company raises its full year outlook. TDH (DOGZ) surges as much as 173% after the pet food firm and meme-trader favorite announced a placement. Moderna falls 11% after a third quarter revenue miss. Upland Software (UPLD) slumps
22% after results, with Jefferies downgrading the stock. Skilz (SKLZ) drops as much as 13% after the mobile games platform operator reported a net loss for the third quarter. Moderna, Square, Airbnb, Uber Technologies, Peloton Interactive and Occidental Petroleum
are among the many companies reporting results. Roku (ROKU) falls 7% after third-quarter results missed expectations
European shares rose for a fifth straight session, hitting record levels. Gains on the STOXX 600 were led by a 1.5% rise in oil and gas stocks,
after crude prices pared losses ahead of the OPEC+ meeting. Drugmaker Roche was the biggest boost to the STOXX 600 after it bought back its nearly one-third voting stake from rival Novartis. A solid earnings season has fueled a fifth week of gains in the
benchmark Stoxx 600 gauge. Alstria Office REIT AG soared as much as 20% after Canada-based Brookfield Asset Management made a bid to take it private. Germany’s blue-chip index DAX rose 0.5%, hitting a record high, after strong earnings from Deutsche Post
(+3.5%). Commerzbank advanced 6% after an earnings beat. France’s Societe Generale gained after the bank posted upbeat quarterly earnings. The CAC is up 0.4%. London’s FTSE 100 rose 0.15%, led by energy stocks which are tracking crude prices higher, while
investors awaited the Bank of England policy decision. Healthcare and retail sectors are up around 0.75% while chemicals and construction lag, down 0.1%.
Asian equities advanced overnight, after the US Federal Reserve moved to taper stimulus while saying it will be patient on raising interest rates.
Japan and China led gains around the region, with stocks also climbing in Indonesia, Thailand and Hong Kong while Taiwan slipped. Japanese shares ended higher, tracking gains in the US. Japanese shipping companies Nippon Yusen and Kawasaki Kisen, the best-performing
stocks on the Nikkei 225 this year, tumbled as investors took profits following strong results. Retailers led the Hang Seng Index amid reports that Hong Kong will allow quarantine free travel to mainland China. Chinese food and beverage stocks were higher
amid price hikes and stockpiling. However, property developers were back under pressure after Chinese property developer Kaisa Group missed a bond payment, adding to the worsening health of China’s $5 trillion property sector. Markets in Singapore, India
and Malaysia are closed for holidays. Topix +1.2%, Hang Seng +0.8% Shanghai Composite +0.8%, Korea +0.25%, ASX +0.5%.
Treasuries advanced as investors weighed the Federal Reserve’s patience with interest-rate hikes against the risk of persistent
inflation and slowing global growth. While announcing a stimulus-tapering plan as expected, Fed Chair Jerome Powell did sound slightly less sure inflationary forces would prove to be fleeting, enough to hit longer-term bonds and “bear steepen” the yield curve.
But Treasuries are higher this morning, with the curve flatter, erasing a portion of Wednesday’s post-FOMC bear-steepening losses. 10-year yield is richer by ~3bp at 1.57% with 2s10s tighter by ~2bp. Elsewhere, China’s local bonds joined a rout in property
debt that has roiled the offshore market this week. Trading was halted in two yuan bonds after they plunged more than 20%.
Gold firmed from a three-week low as the Federal Reserve signaled it will be patient on raising interest rates. Gold rose
as Treasury yields retreated, but its gains were limited by a rebound in the dollar. Chair Jerome Powell on Wednesday stressed that the tapering — at a pace of $15 billion per month — doesn’t mean policy makers will hike rates any time soon and they want
to see the labor market heal further. A Federal Open Market Committee statement also included new language that inflation might not prove to be entirely transitory. Spot gold climbed 0.6% with silver +0.9%.
Oil rose over 2% as investors awaited an OPEC+ meeting to review output plans. OPEC+ is getting ready to decide on its output
levels as pressure grows from major consumers to lift production. OPEC and its allies have their monthly meeting today with signs pointing to officials ignoring calls to hike production, beyond the currently planned 400,000 barrels a day. The Biden administration
said it would accept that level as a minimum so long as the cartel allows countries to pump more to make up for members not meeting their quota.
The US dollar rose against all Group-of-10 peers except the yen, pushing the euro back toward the lows of the year. The
pound weakened as currency markets awaited the BoE’s rate decision. Sterling fell against a strengthening dollar but the slide was capped by some expectations that the Bank of England could become the first major central bank to raise interest rates since
the coronavirus pandemic. Markets are pricing in a rate rise to 0.25% from 0.1%, but economists polled said it was too close to call. Bank of England rate decision was unchanged at 8:00ET with a vote of 7-2, and the pound extended its decline. GBPUSD is now
down 0.8%, EURGBP +0.35%. EUR/USD led losses and fell as much as 0.6%. EURJPY -0.7%, USDJPY -0.2%, AUDUSD -0.4%.
Commonwealth Bank of Australia (CBA), or CommBank, revealed it will enable its clients to buy, sell, and hold cryptocurrencies,
including the leading ones – bitcoin and ether. Thus, the financial institution will become the first in the country to offer such opportunities. As the official announcement reads, the initiative will become live due to a collaboration between the Australian
bank, the cryptocurrency exchange Gemini, and the blockchain analysis firm Chainalysis. CBA will add a new feature where users can operate with up to ten selected digital assets, including Bitcoin, Ether, Bitcoin Cash, and Litecoin. The pilot is set to start
in the following weeks, while the bank vowed to roll out even more cryptocurrency services in 2022. Bitcoin is down 1.8%, Ethereum -1.9%.
- APA Corp (APA) raised to buy at Truist Secs; PT $45
- Andersons (ANDE) raised to overweight at Stephens; PT $48
- Athabasca Oil (ATH CN) raised to sector perform at Peters & Co; PT C$1.50
- Cadence Bank (CADE) raised to overweight at Piper Sandler; PT $40
- Capri Holdings (CPRI) raised to overweight at JPMorgan; PT $77
- KnowBe4 (KNBE) raised to buy at Goldman; PT $34
- Macerich (MAC) raised to neutral at Piper Sandler; PT $23
- Maxar Technologies (MAXR) raised to outperform at Baird; PT $39
- NOW Inc (DNOW) raised to overweight at Stephens; PT $12
- National CineMedia (NCMI) raised to outperform at Wedbush; PT $5
- Qualcomm (QCOM) raised to buy at Goldman
- Qualys (QLYS) raised to overweight at JPMorgan; PT $160
- Reliance Steel (RS) raised to buy at Goldman; PT $190
- Sealed Air (SEE) raised to outperform at BMO; PT $70
- Shore Bancshares (SHBI) raised to overweight at Piper Sandler; PT $22
- AMC Entertainment (AMC) cut to underperform at Wedbush; PT $7.50
- Activision Blizzard (ATVI) cut to hold at Edward Jones
- AcuityAds (AT CN) cut to hold at TD; PT C$8
- Ameresco (AMRC) cut to neutral at Piper Sandler; PT $96
- American Water (AWK) cut to neutral at Goldman; PT $177
- Aon PLC (AON) cut to neutral at Atlantic Equities; PT $320
- Asana (ASAN) cut to hold at Jefferies; PT $135
- BioDelivery (BDSI) cut to neutral at HC Wainwright; PT $4.50
- Continental Resources (CLR) cut to hold at SWS; PT $55
- Continental Resources (CLR) cut to neutral at JPMorgan; PT $53
- Elf Beauty (ELF) cut to neutral at Piper Sandler; PT $34
- Equinix (EQIX) cut to market perform at Cowen; PT $880
- PROG Holdings Inc (PRG) cut to equal-weight at Stephens; PT $57
- Qorvo (QRVO) cut to hold at Summit Insights
- Qualcomm (QCOM) cut to hold at Summit Insights
- Rimini Street (RMNI) cut to market perform at Cowen; PT $10
- Rogers (ROG) cut to hold at Canaccord; PT $277
- Rogers (ROG) cut to hold at Stifel; PT $277
- Roku (ROKU) cut to neutral at Masterlink Securities
- Turquoise Hill (TRQ CN) cut to underperform at BMO; PT C$12
- Upland Software (UPLD) cut to hold at Jefferies; PT $30
- AXT (AXTI) rated new outperform at Wedbush; PT $11
- Alamo Group (ALG) rated new neutral at DA Davidson; PT $150
- Ballard Power Systems (BLDP CN) rated new neutral at SMBC Nikko
- Harmony Biosciences (HRMY) rated new outperform at Raymond James
- ILAL US (ILAL) rated new speculative buy at Taglich Brothers; PT $2
- Plug Power (PLUG) rated new outperform at SMBC Nikko; PT $50
- Rivalry (RVLY CN) rated new buy at Eight Capital; PT C$4
- Voxx (VOXX) rated new outperform at Imperial; PT $15
Cabrera Capital Markets, LLC