Cabrera Capital Daily Game Plan

Tuesday November 17, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:   
8:30ET  Retail Sales, Import Price Index; 9:15ET Industrial Production, Capacity Utilization; 10:00ET Business Inventories, Home Builders Index; Fed Chairman Powell speaks; 3:00ET Fed’s Barking speaks

Facebook and Twitter CEOs testify before the Senate today over content moderation decisions

TODAY’S HIGHLIGHTS: 

• Tesla soars on S&P inclusion
  
• A SpaceX vessel carrying four astronauts has docked with the International Space Station
  
• Japan and Australia agree on military pact with eye on China’s influence
  
  link
• SEC Pursues Plan Requiring Chinese Firms to Use Auditors Overseen by U.S. – WSJ
  
• President Trump will bring his efforts to overturn Biden’s victory to a court in Pennsylvania today
• Iowa has registered more than 52,000 COVID infections over the past two weeks, about the same number documented from March to mid-August

The global stock rally powered by hopes that new Covid-19 vaccines will bolster economic growth paused as investors weighed the near-term spread
of the virus. The vaccine news continued to buoy risk sentiment, although the rally stalled in European shares as focus turned to increasing coronavirus-led restrictions in Europe.  The pandemic continues to escalate in Europe and the US, with the seven-day
average of new cases in America climbing in every state on Sunday. BofA’ s monthly investor survey showed global economic growth and profit expectations running at a 20-year high, the “reopening rotation” back into coronavirus-hit sectors is likely to continue
for the rest of the year.

EQUITIES: 
 Walmart tops earnings forecasts as U.S. same-store sales rise 6%.

S&P 500 futures retreated a day after the underlying benchmark closed at an all-time high as authorities remain focused on slowing the pandemic
down which is gaining momentum across the US. California reinstituted bans on many indoor businesses, Michigan has ordered a three-week partial shutdown and states including Oregon, Washington, Iowa and New Jersey tightened curbs.  Contracts on the tech-heavy
Nasdaq 100 are outperforming after Tesla shares jumped more than 12% in pre-market trading after an announcement that it will join the S&P 500 Index on Dec. 21.

December E-mini S&P futures -0.6%, Nasdaq +0.25%, Russell 2000 futures -0.8%, Dow futures -0.7%. SPX would likely see some downside momentum
shift today below 3607 area.  

NYSE Advance/Decline has been a positive for the overall market

Small caps continue to outperform tech heavy Nasdaq as IWM gain 2.3% yesterday while QQQ rose 0.78%. IWM/QQQ holding a positive tone above the
200 day in the pair.

Energy sector fund (XLE) is down 1.1% pre-market after gaining 6.6% yesterday to test its very pivotal
200 day
moving average.

European stocks eased from eight-month highs as tighter coronavirus-driven restrictions across the continent hit travel stocks, halting a broader
rally that was powered by encouraging COVID-19 vaccine news. Spain’s IBEX was the worst performer, down 1.3%. Travel, healthcare, and banking names are the worst performers.  British airline EasyJet slid 5% after it recorded a 1.27 billion pound ($1.68 billion)
annual loss, the first in its history. European banks retreated after 3% surge on Monday with BBVA falling over 6% after it and smaller rival Sabadell (+3.7%) said they were in talks to create Spain's second-biggest domestic lender by assets. The Stoxx Europe
600 Index is falling 0.4% with AstraZeneca contributing the most to the index decline, decreasing 3%. Travel sector is down 1.1%, Banks -0.8%, Energy -0.7%, FTSE 100 -1.2%, DAX and CAC -0.3%

Most markets in the Asian region were up, led by finance and energy sectors. with Singapore's Straits Times Index advancing 1.1% and Indonesia's
Jakarta Composite rising 0.6%.  Indian shares notched record closing highs, playing catch-up with overseas gains after a long holiday weekend. Japan’s Nikkei average (+0.4%) closed at a 29-year high as investors cheered news of another potential coronavirus
vaccine. South Korean shares rose for a third straight session but tightening of some virus-related curbs capped gains (+0.2%). China's Shanghai Composite slid 0.2%, weighed by losses in healthcare stocks on concerns over lofty valuations, while more bond
defaults hit sentiment.

FIXED INCOME: 
 

Treasury futures hold small gains, leaving yields richer by about 2bp at long end of the curve. Market is underpinned by weakness in equities
following Monday’s rally. Yields little changed at front end of the curve, flattening 2s10s, and 5s30s. Deal flow is in focus with Saudi Aramco setting initial spread guidance on a five-tranche jumbo bond sale. IG dollar issuance slate includes Italy 5Y; World
Bank 3Y, 7Y; and BNG Bank 5Y in addition to Saudi Aramco’s 3y/5y/10y/30y/50y offering expected to raise around $6b.

10 year yield is holding its 50 week moving average resistance for now.

METALS: 

Gold steadied with a weaker dollar and bets for further monetary support as infections surged in Europe and the United States.  The evolution
of COVID vaccines is keeping a cap on gold prices. Gold fell as much as 1.3% on Monday after Moderna said its vaccine was 94.5% effective in preventing COVID-19 in a late-stage trial.

ENERGY:  
OPEC+ Joint Ministerial Monitoring Committee meets today

Oil prices are lower, under pressure from new lockdowns, but helped by expectations that OPEC and its allies would tighten supplies next year
and supported by news of a second possible COVID-19 vaccine. All eyes are turning to the OPEC+ ministerial committee meeting today where they could recommend changing quotas when all the ministers meet on Nov. 30 and Dec. 1. OPEC+ see oil inventories declining
further in 2021 should producers extend supply curbs for three months or more, a confidential document seen by Reuters shows.  US natural gas futures pared the biggest loss in almost two months amid fears that an outlook for warmer-than-normal temperatures
will cut consumption of the heating fuel.

WTI continues to hold key Fibonacci retracement resistance area, but short term looks positive above its 50 and 200 day moving averages (chart
two below). Brent has its 200dma support at 42.40*.

CURRENCIES:  

The pound rose on signs the U.K. and European Union are nearing a breakthrough on Brexit. As talks continue in Brussels, officials are planning
for the possibility of a breakthrough to be announced as soon as Monday. Britain’s chief negotiator told Prime Minister Johnson to expect a Brussels trade deal “early next week.”  The euro climbed against the dollar, helped by optimism over another coronavirus
vaccine, while the Chinese yuan hit its highest against the US currency since June 2018. China’s central bank lifted its official yuan midpoint to the highest in nearly 29 months on the back of strong economic data. The spot US dollar index is lower for a
fourth straight day as investors look ahead to the release of US Retail Sales to gauge the health of the economic recovery.

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

• LXRX +42.6% (+$0.55); Lexicon Pharma Soars After Drug Shows Heart Patient Benefits
• BTBT +16.5% (+$0.89)
• TSLA +13.8% (+$56.3); Tesla to Join S&P 500 Next Month as Largest-Ever New Member
• FCEL +8.9% (+$0.33); Luminus Management Buys New 1.1% Position in FuelCell
• CAN +8.2% (+$0.27)
• YY +7.8% (+$7.42); Baidu to Buy Joyy’s Live Streaming Business in China
• EH +6.3% (+$0.71)
• VLDR +5.7% (+$0.88)
• DQ +5% (+$2.17)
• LI +4.8% (+$1.70)
• VXRT +4.3% (+$0.24); Ra Capital Management Buys New 9.9% Position in Vaxart
• XPEV +4% (+$1.78)
• SDGR +4% (+$2.36); Gates Foundation Adds Boston Properties, Cuts Schrodinger: 13F
• KNDI +4% (+$0.32)
• NKLA +3.7% (+$0.82)
• BEEM +3.5% (+$0.78)
• PLL +3.5% (+$1.04)

Decliners

• PRGO -2% (-$1)
• IBIO -18% (-$0.37)
• CBAT -17.3% (-$1.96); CBAK Energy Technology Inc Rises 84%: Chinese U.S. Listings
• GDRX -14.8% (-$6.91)
• RAD -14% (-$1.81); Amazon Online Pharmacy Plan Pressures Drug Stores, Distributors
• CODX -13.5% (-$1.84)
• WBA -12.3% (-$5.43); Amazon Expands Push Into Health Care With Online Pharmacy
• PLUG -11.2% (-$2.81); Plug Power Slumps After Offering Priced at 11% Discount
• IQ -9.5% (-$2.64); IQiyi Falls Amid Weak Sales Growth, Competitive Pressure
• TREE -9% (-$29.2); LendingTree Prices Secondary Offering of 2.96M Shares of Stock
• CVAC -9% (-$7.68); CureVac Expands Covid Vaccine Candidate Manufacturing Network
• CVS -8.9% (-$6.54); CVS Social Media Volume Quadruples
• ALKS -8.1% (-$1.44); Alkermes’ Schizophrenia and Bipolar Drug Fails to Win FDA Nod
• API -7.6% (-$3.17)
• WWR -7.5% (-$0.47)
• GAN -6% (-$1.08); GAN Limited Announced Pact to Buy Coolbet
• CAH -5.9% (-$3.47); UnitedHealth Supply Chain in Focus as News Volume Rises

David Wienke

Cabrera Capital Markets, LLC