Cabrera Capital Daily Game Plan

Tuesday May 10, 2022                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES   
9:15ET Fed’s Barkin speaks; 11:00ET Household Debt; 11:30ET Biden speaks on inflation; 1:00ET 3 Year Auction, Fed’s Waller speaks, 3:00ET Fed’s Mester speaks; 7:00 Fed’s Bostic speaks

TODAY’S HIGHLIGHTS:   

• Mortgage rates are surging at the fastest pace in 40 years
• Andy Warhol’s Marilyn Monroe Portrait Sells for Record $195 Million
• Mario Draghi meets Joe Biden in the White House today  

Global shares are finding some relief after three brutal days of selling. But the dip buying seen in developed-nation failed to spill over to
emerging markets where the MSCI’s benchmark for developing-nation stocks fell for a seventh day.  Recent US data suggesting the Fed will stay on an aggressive rate hike pace and China’s stringent policy toward fresh outbreaks of Covid have worsened sentiment.
Beijing’s extraordinary efforts to curb COVID-19 outbreaks have clogged highways and ports, restricted activity in dozens of cities and forced companies to suspend some operations. Financial markets are also facing concerns that some European economies could
suffer distress if Russian oil imports were curtailed further.  Investors’ attention now turns to the US April consumer-price index data tomorrow, to see whether inflation is nearing a peak.
Other major economies including China, India and Brazil will also report figures this week.

US EQUITIES: 

US equity-index futures rallied as dip buyers emerged after Monday’s rout where valuations in Nasdaq names plummeted to the lowest level in two
years. Nasdaq futures are up 1.5% while the S&P 500 is up 1% after hitting fresh 52-week lows yesterday.  The crash in global equity markets may be reaching a floor for now, according to the chief global equity strategist at Goldman.                                                  

E-mini S&P futures +1%, Nasdaq +1.5%, Russell 2000 futures +1%, Dow futures +0.75%.

In premarket trading, AMC Entertainment gained over 3% amid signs blockbuster releases are luring back moviegoers. Upstart Holdings plunged 48%
after the cloud-based AI lending platform cut its full-year revenue forecast. Electric vehicle makers Tesla, Rivian Automotive and Lucid Group are set to rebound after a three-day rout. Tesla denied a Reuters report that it halted output in Shanghai but said
there’s some disruption.  Peloton fell 20% after reporting its revenue forecast missed estimates. Shockwave Medical (SWAV) is up 16% after it raised its revenue guidance for the full year. Plug Power (PLUG) shares are 5% lower after it reported net revenue
that missed. Video game stocks may move after Sony’s earnings fell short of estimates amid supply constraints. Grindr will go public via a SPAC with Tiga at a valuation of $2.1 billion. CarGurus (CARG) shares down 17% after the company’s strong second-quarter
outlook was overshadowed by some weakness in wholesale revenue. Clover Health (CLOV) shares gain 12.5% after the company reported first-quarter revenue that beat.    

European stock indexes opened higher, with risk appetite showing some recovery, encouraged by cheaper valuations following four straight days
of steep declines. Gains across Europe are broad based with most equity indexes recovering roughly half of yesterday’s selloff.  Banks and construction are outperforming while energy falls.  The declines this month have pushed the Stoxx 600 index into oversold
territory, with the relative strength index at its lowest since March when it bounced 12% off the lows. Among individual movers, Swedish Match AB shares soared as much as 28% to a record after Philip Morris said it’s in talks to buy the maker of smokeless
tobacco products. Equinor ASA, conversely, slipped 3.75% as it sold assets in the North Sea for $1 billion. Stoxx 600 +0.9%, DAX +1.2%, CAC +0.6%, FTSE 100 +0.5%. U.K. retail sales fell for the first time since January 2021, declining an annual 0.3% in April.
Banks +2.8%, Construction +1.9%, Energy -1%.       

Asian equities opened sharply lower following the drubbing in the US, but the selloff eased as the day progressed.  Vietnam
outperformed in the region and Chinese mainland stocks advanced as the PBOC repeated a pledge to address mounting economic pressure and highlighted a drop in deposit rates. Today’s data showed China’s export growth slowed to its weakest in almost two years,
as the central bank pledged to step up support for the slowing economy. Imports barely changed in April as tighter and wider COVID-19 curbs halted factory production and crimped domestic demand. The MSCI Asia Pacific Index fell as much as 2.1% to its lowest
level since July 2020, weighed down by tech shares. Alibaba tumbled 4.8%.  The Hang Seng Index ended 1.8% lower as the market reopened after a holiday, trimming losses of as much as 6% at one point. The Philippine benchmark ended 0.6% lower after Ferdinand
Marcos Jr. won a landslide victory in the country’s presidential election. Australia -1%, Topix -0.85%, Kospi -0.55%, Sensex -0.2%. Vietnam +1.9%, China’s CSI 300 +1.1%.     

FIXED INCOME: 
                                       

Treasuries rise in early U.S. trading with belly leading gains. Yields are richer by ~4bp across in belly of the curve,
steepening 5s30s spread by ~3bp as long-end yields lag; 10-year ~3% is richer by ~3bp on the day.  Treasury auction cycle begins with 3-year note sale, and several Fed speakers are slated. In the latest policy comments, Atlanta Fed President Raphael Bostic
said he favors continuing to raise rates by half-point moves rather than anything larger. He said the odds for a 75-basis-point hike are low but added he’s taking nothing off the table         

METALS: 
                               

Gold gains 0.4% as Treasury yields edged lower ahead of a raft of inflation data due in the coming days. Bullion edged higher
after falling 1.6% on Monday, extending its slide since mid-April as the Federal Reserve and other central banks tighten monetary policy to fight accelerating consumer inflation.    

ENERGY:     

Crude oil extended yesterday’s steep decline due to a combination of the stronger dollar, growing recession fears, and COVID-19
lockdowns in China. The outlook for crude remains clouded after the European Union softened some proposed sanctions on Russia. Delays to the EU Commission’s proposal to ban oil imports from Russia have weighed on prices. French President Macron and Hungarian
Prime Minister Orban discussed energy security today as the EU seeks to persuade Hungary to drop its opposition to proposed sanctions on Russian oil imports.  Meanwhile, German officials are quietly preparing for any sudden halt in Russian gas supplies which
accounted for 55% of Germany’s imports last year. The UAE also said without more investment globally, OPEC+ won’t be able to guarantee sufficient supplies when demand fully recovers. For now, it doesn’t see any shortage of crude or need to adjust OPEC+ policy. In
the US, retail gasoline and diesel prices hit fresh all-time records with the average gasoline price at $4.37.  WTI is down 1.5%, Brent -1.75%.  

CURRENCIES:   
 

The US Dollar Index nudges higher after hitting its highest level since December 2002 yesterday. The Australian dollar fell
to its lowest in nearly two years, hurt by fears of slowing economic growth. Most Group-of-10 currencies traded in narrow ranges ahead U.S. consumer-price index data on Wednesday as traders sought clues on the Federal Reserve’s tightening trajectory.  Russia’s
ruble, which had soared more than 80% in the two months through last week, posted a second-day loss.       

Bitcoin is up 1.7% after dipping below $30,000 overnight and testing key Fibonacci support.  Monday’s plunge was more than
11%, its biggest daily fall since May 2021.  Ethereum +3.75%.    

TECHNICAL LEVELS: 
  

Colors within the report:
Green
is always the 200 period (day, week). Red is always 21,
Blue = 50,
Brown =
100  *Stars have added importance

UPGRADES:

• Autoliv (ALV) raised to buy at UBS; PT $90
• Clean Energy Fuels (CLNE) raised to outperform at Raymond James; PT $6
• Genuine Parts (GPC) raised to neutral at BofA
• Graphic Packaging (GPK) raised to outperform at Exane; PT $26
• Healthcare Trust (HTA) raised to buy at Berenberg; PT $34
• LivePerson (LPSN) raised to buy at Roth Capital; PT $25
• Maxar Technologies (MAXR) raised to buy at Canaccord; PT $38
• O’Reilly Automotive (ORLY) raised to buy at BofA
• Prestige Consumer Health (PBH) raised to buy at Jefferies; PT $70
• Progressive (PGR) raised to hold at Jefferies; PT $106
• Sea Ltd ADRs (SE) raised to hold at Tellimer
• Xenia Hotels (XHR) raised to buy at B Riley; PT $22

DOWNGRADES:

• Affirm Holdings (AFRM) cut to underweight at Stephens; PT $17
• Altria (MO) cut to market perform at Bernstein; PT $53
• Boise Cascade (BCC) cut to hold at Benchmark
• DBV Tech ADRs (DBV FP) cut to neutral at Goldman; PT $1.50
• Edison International (EIX) cut to neutral at Mizuho Securities; PT $72
• Essex Property (ESS) cut to underweight at Barclays; PT $310
• GoodRx Holdings (GDRX) cut to inline at Evercore ISI; PT $12
• GoodRx Holdings (GDRX) cut to market perform at Raymond James
• GoodRx Holdings (GDRX) cut to market perform at SVB; PT $10
• GoodRx Holdings (GDRX) cut to sector perform at RBC; PT $8
• Healthcare Realty (HR) cut to hold at Berenberg; PT $32
• Methanex (MX CN) cut to underweight at Piper Sandler; PT $48
• Palantir (PLTR) cut to underperform at RBC; PT $6
• Telus (T CN) cut to equal-weight at Barclays; PT C$33
• Upstart (UPST) cut to neutral at Piper Sandler; PT $44
• Upstart (UPST) cut to underweight at Stephens; PT $28
• Viatris (VTRS) cut to underweight at Piper Sandler; PT $10

INITIATIONS:

• Agree Realty (ADC) rated new market outperform at JMP; PT $81
• Amex Exploration (AMX CN) reinstated speculative buy at Canaccord; PT C$4
• Athira Pharma (ATHA) rated new buy at BTIG; PT $33
• Axon (AXON) rated new outperform at Credit Suisse; PT $169
• Beazer Homes (BZH) rated new buy at B Riley; PT $23
• Ford (F) rated new hold at Berenberg; PT $17
• General Motors (GM) rated new buy at Berenberg; PT $55
• Gold Standard Ventures (GSV CN) reinstated speculative buy at Canaccord
• Marathon Gold (MOZ CN) reinstated speculative buy at Canaccord; PT C$3.60
• Maritime Resources (MAE CN) reinstated speculative buy at Canaccord
• Necessity Retail REIT In (RTL) rated new market perform at JMP
• O3 Mining Inc (OIII CN) reinstated speculative buy at Canaccord; PT C$3.25
• Probe Metals (PRB CN) reinstated speculative buy at Canaccord; PT C$3.25
• Roblox (RBLX) rated new neutral at Wedbush; PT $28
• Satellogic (SATL) rated new underweight at Piper Sandler; PT $5
• Spirit Realty (SRC) rated new market outperform at JMP; PT $54
• Tesla (TSLA) rated new hold at Berenberg; PT $900
• Tyler Tech (TYL) rated new neutral at Credit Suisse; PT $408
• WP Carey (WPC) rated new market outperform at JMP; PT $87

David Wienke

Cabrera Capital Markets, LLC