Cabrera Capital Daily Game Plan

Thursday November 5, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:   
8:30ET Initial Jobless Claims, Productivity, Unit Labor Costs; 2:00ET FOMC announcement; 2:30ET Fed Chairman Powell news conference

The Fed is expected to stick closely to its last statement and repeat its pledge to do whatever it can to help the economy through the coronavirus-triggered
recession.

TODAY’S HIGHLIGHTS:

• Police arrest 11 in Portland, 50 in New York at protests after US vote
  link
• Local partners of Protect the Results have organized more than 100 events planned across the country between Wednesday and Saturday
• The Telegraph newspaper reported that the central bank was considering negative interest rates
• AstraZeneca holding back vaccine deliveries while it awaits the data from late-stage clinical trials
• Ant Group IPO Faces At Least 6 Month Delay After Beijing Intervention – FT
  

Stocks rallied globally as investors rushed back into technology and health-care firms on bets that the US election results will trigger no major
changes to taxes or regulations that have underpinned the bull market for years. The Bank of England increased its already huge bond-buying stimulus by a bigger-than-expected 150 billion pounds ($195 billion) as it prepared for economic damage from new coronavirus
lockdowns. The BoE said Britain’s economy was set to shrink 2% during the fourth quarter and is ready to pump more stimulus into Britain’s economy if the outlook for inflation weakens.

EQUITIES: 
 

US stock futures jumped on bets that a potential gridlock in Washington could reduce the chance of major policy changes that would hurt corporate
America.  Futures on the tech-heavy Nasdaq 100 jumped another 2.8% after surging nearly 4.5% on Wednesday when the vote count failed to produce a clear Democratic sweep as many had expected. Republicans appear likely to retain control of the Senate, which
would make it more difficult for a Biden presidency to deliver on promises to rein in Big Tech and other businesses.

December E-mini S&P futures +1.85%,
Nasdaq +2.6%%, Russell 2000 futures 1.15%, Dow futures +1.4%. SPX gapped higher for a third straight day, hitting the short term .786* retracement before finding resistance. It will open clearly above it this morning. Look for a test of the October high…

Worst day for Russell 2000 value versus growth since 2001. Growth +2% / Value -2%. 

Health care led all sectors, +4%.  XLV has gained over 9% since holding the key 200dma to end last week, putting in a new all time high.

The Cloud Computing ETF gained 5.7% yesterday and up another 4% pre-market.

European stocks hit a two-week high, supported by a handful of strong earnings reports, more stimulus for Britain’s economy, and a surge in Wall
Street stocks. The Stoxx Europe 600 index gained for a fifth straight day, buoyed by tech shares and some strong corporate results. Chip makers including Dialog Semiconductor were among the biggest gainers following an upbeat forecast from Qualcomm on demand
for 5G devices. Societe Generale advanced after its quarterly profit almost doubled analyst estimates. Technology sector +2.7%, Autos +1.45%, Financials +1.25% / DAX +1.6%, CAC +1.2%, FTSE 100 +0.6%, Stoxx 600 +1%

DAX held its key .382 retracement support and has short term pivot pt resistance around 12640

Asian stocks gained, led by the health care and communications sectors. Thailand’s SET gained 3.4%, but still down more than 20% on the year.
Hong Kong gained 3.25%, its highest close in over three months.  The Hang Seng Tech Index gained 5.45% on the day as investors made use of cash freed up by the aborted Ant IPO attempt. Japanese shares ended at a more than two-year high, buoyed by overnight
gains in the US.  Indian shares gained 1.8%, closing at their highest level since mid-February as strong earnings from the country’s biggest lender State Bank of India boosted banks. South Korea’s Kospi gained 2.4%, led by new energy and technology shares.
The Shanghai Composite Index rose 1.3% as Biden is widely seen as likely to be less combative on trade policy with China.  New energy shares and Apple suppliers gained on expectations of easing Sino-U.S. tensions and hopes that a Biden administration would
invest more in renewable energy.

FIXED INCOME: 
 

Treasuries are extending Wednesday’s bull-flattening move despite gains for U.S. equity futures. The reduced likelihood of a multitrillion-dollar
stimulus package in a divided Congress helped push Treasuries higher again overnight.  Data from Refinitiv Lipper showed that global debt funds received an inflow of $49 billion in October, compared with an outflow of $2.6 billion in equity funds. Attention
now turns to the FOMC announcement, which is likely to hold off from any major policy changes with the US election still in a state of uncertainty. 

TLT is above its 200dma in pre-market trading and a settle above it would likely see some upside momentum shift. 10 year yield falls quickly
back below its 200 day moving average.

METALS: 

Gold climbed over $1,900, buoyed by a weaker US dollar as investors awaited the outcome of the US presidential election. The still-unresolved
outcome spurred market participants to reassess the potential scale and timing of a much-needed US fiscal stimulus package. Spot gold rose 1.25%.

ENERGY:  

Oil traded near $39 with the dollar slipping and Joe Biden on the brink of a narrow victory in the U.S. election.  A nearly 8 million-barrel
drop in U.S crude inventories added to the bullish momentum on Wednesday.  Futures pared an earlier decline while the dollar fell. If Biden wins and there’s a divided government, the Biden administration may have to scale back plans to remove subsidies for
oil and gas producers.  Aside from the election, the oil market is now facing up to renewed lockdown measures because of Covid-19. Road traffic in some European countries was the lowest since June last week, but Asian demand remains healthy. Saudi Arabia cut
most oil pricing for its Asia buyers as a resurgence in the coronavirus clouds the outlook for energy demand.

CURRENCIES:  

The US dollar’s losses deepened (-1%), as traders unwound some of their safe-haven demand for the as Democrat Joe Biden moved closer to victory.
The dollar is on course for its biggest three-day losing streak in more than three months as traders braced for the outcome of a US central bank policy meeting that might hint at more stimulus.  But financial markets are bracing for days or even weeks of uncertainty
as Trump has opened a multi-pronged attack on vote counts in several states. Some of the biggest gains were seen in currencies which had borne the brunt of Trump’s protectionist policies in recent years, with the Chinese yuan briefly rising to more than a
two-year high.  The Pound fell against the euro as the Bank of England increased its already huge bond-buying stimulus by 150 billion pounds. Sterling gained against the dollar, however, as traders saw a reason to buy riskier currencies on expectations of
a Biden win.

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

• KXIN +60.6% (+$1.68); Kaixin Auto Holdings Announces Entry into a Binding Term Sheet and Changes to Senior Management
• ALTM +52% (+$5.22); Altus Midstream Soars After Raising Forecasts for 2021
• UPWK +25.5% (+$5.16); Upwork Surges as Pandemic Bolsters 4Q, 2021 Forecasts
• FRGI +23.6% (+$2.24); Fiesta Restaurant 3Q Adjusted EPS Beats Estimates
• REZI +18.9% (+$2.15)
• TLRY +16.7% (+$1)
• TS +15.1% (+$1.55)
• QCOM +14.2% (+$18.3); Qualcomm Soars as Analysts Cheer ‘Stunning’ Results: Street Wrap
• CPRI +12.3% (+$2.87)
• ODP +11.7% (+$2.46); ODP Corporation 3Q Sales Meet Estimates
• XPEV +10.3% (+$2.81)
• QRTEA +8.7% (+$0.60); Qurate Retail 3Q QVC Group Adjusted Oibda Beats Estimates
• KNDI +8.2% (+$0.67)
• ORBC +8% (+$0.41)
• MRSN +8% (+$1.74)
• NXST +7.5% (+$6.12)
• CCRN +7.1% (+$0.56); Cross Country Health Raised to Buy at Benchmark
• PRGO +7.1% (+$2.94)

Decliners

• BLUE -14.6% (-$8.55); Bluebird Bio Falls After Adjusting Submission Timeline
• HBI -14.4% (-$2.36); Hanesbrands Falls After 4Q Adj. EPS View Misses Estimates
• PING -14.1% (-$3.94); Ping Identity Falls After Unexpected Third-Quarter Loss
• AKBA -8.6% (-$0.22); Akebia Therapeutics 3Q Loss/Shr 42c Vs. Loss/Share 46.00c Y/y
• ABUS -6.9% (-$0.21); Arbutus Biopharma 3Q Revenue Misses Estimates
• ZNGA -4.9% (-$0.48); Zynga Boosts FY Adjusted Revenue View, Meets Est.: Snapshot
• TTOO -4.6% (-$0.07); T2 Biosystems 3Q Loss Per Share Matches Estimates
• HGEN -4% (-$0.44)
• ING -3.5% (-$0.26)
• CNK -2.8% (-$0.24)
• BABA -2.6% (-$7.71); Alibaba Shares Fall in Premarket Trading After Quarterly Results
• XRAY -2.3% (-$1.11); Dentsply 3Q Adjusted EPS Beats Estimates

David Wienke

Cabrera Capital Markets, LLC