Cabrera Capital Daily Game Plan

Friday June 24, 2022                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES  
10:00ET  UMich consumer sentiment index (final); New home sales (SAAR); 1:15ET Fed’s Daly interviewed on Fox Business News

TODAY’S HIGHLIGHTS:   

• Russell Reconstitution today will cause higher than average volumes
  

World markets are broadly higher after a volatile week that saw global equities have their biggest outflows in months, according to EPFR Global
data. Global equity funds saw their biggest outflows in nine weeks as investors piled into cash amid fears that the US economy could be headed for a recession. German business confidence unexpectedly deteriorated on mounting fears over energy supplies from
Russia that are raising the prospect of a recession in Europe’s biggest economy. The threat of gas shortages has increased firms’ uncertainty but bottlenecks in the industrial and retail sectors have eased slightly, Ifo economists said. British consumers cut
back on shopping in May in the face of fast-rising inflation, and a measure of their confidence sank to a record low this month, according to the Office for National Statistics. May’s fall was driven by weaker food sales.                                                               

US EQUITIES: 

US equity futures continue their rebound with S&P 500 futures up over 5% from last week’s low and Nasdaq gaining more than 7%. Focus will be
on the release of Michigan sentiment survey that is watched by the Fed, and index rebalances including the Russell Reconstitution.    

E-mini S&P futures +0.8%, Nasdaq +0.75%, Russell 2000 futures +0.7%, Dow futures +0.65%. 

In pre-market trading, Twitter rises on reports that the social media firm gave Elon Musk more user data. Zendesk shares
soared over 50% after reports that the software maker was close to striking a buyout deal. US-listed Chinese stocks rise, on track for their best week since April as more market watchers turn positive on the group. FedEx Corp. (FDX) gains 3% after its earnings
forecast was above expectations. LendingTree (TREE) shares dropped 10% after cutting its second-quarter forecast. CarMax (KMX) beat earnings estimates but says used vehicle market environment was challenging in the recent quarter.

European indices are extending early gains as lower valuations lured dip buyers. The Stoxx Europe 600 rose more than 1.7%,
with healthcare and media outperforming.  Soc Gen says the fundamentals of the European pharma sector are healthier than US peers. Online retailers decline in Europe following another warning in the sector, this time from Germany’s Zalando. Europe’s largest
online retailer said profit will be far below previous guidance as the macroeconomic challenges it’s facing are likely to be “longer-lasting and more intense than previously anticipated.” Outperformers: Pendragon +3.4%, Dr Martens PLC +3.3%, Howden Joinery
+2.6%. Underperformers: Ted Baker -3.7%, Asos -2.3%, Superdry -1.6%.  Meanwhile, Ultra Electronics Holdings soared after the UK government said it is “minded to accept” Cobham’s planned takeover of the firm.  CAC 40 +2.2%. FTSE 100 +1.5%, DAX +1%, FTSE MIB
+1.25%.  Media +2.9%, Healthcare +2.75%, Tech +2.3%. Autos -0.4%. Basic Resources -0.3%.

Asian shares gained as technology shares staged a comeback amid falling yields. The MSCI Asia Pacific Index rose as much
as 1.2%, led by tech-heavy markets such as South Korea and Hang Seng. Stocks have fared relatively better in Asia than in other regions as China’s move to dial back Covid restrictions supports market sentiment. Shares linked to China sporting goods makers
rallied after media reports that amendments to the National Sports Law were approved. Shares of Logistics startup GogoX plunged 22% on their Hong Kong trading debut. Hang Seng Tech +4%, Philippines +2.5%, Kospi +2.25%, Hang Seng ++2.1%, Nikkei 225 +1.25%,
CSI 300 +1.15%, Sensex +0.9%, ASX 200 +0.75%. Vietnam underperformed, falling 0.3%.

FIXED INCOME: 
                                        

Treasuries are slightly cheaper across the curve as US stock futures advance beyond Thursday’s highs. US yields are cheaper
by 1bp-3bp across the curve and spreads within a basis point of yesterday’s close; 10-year higher by 2.5bp at 3.115%. Focal points of US session include early Bullard comments and University of Michigan inflation expectations, cited by Fed Chair Powell in
latest policy decision.   

METALS: 
                               

Gold is heading for a second straight weekly drop after Federal Reserve Chair Jerome Powell called his commitment to curbing
inflation “unconditional,” while gauges of economic activity slowed in the US and Europe.  Bullion is failing to attract much in the way of haven flows as the prospect of tighter monetary policy curbs demand for non-interest bearing assets.  Spot gold +0.1%,
silver -0.35%. 

ENERGY:     

Crude Oil prices are higher, tracking equities, though set for a weekly loss as the market has tried to buck worries over
economic slowdowns that could cut into demand. Inventory data from the Energy Information Administration, originally expected Thursday, have been delayed due to “systems issues.”  Meanwhile, the US is preparing to escalate its complaints that Mexico’s state-favoring
energy policies violate the nations’ free-trade agreement, a move that could heighten tensions between the countries’ governments. WTI +1.7%, Brent +1.5%                                      

CURRENCIES:                      

The major currencies trade within recent ranges in the spot market as money market traders pare rate-hike bets due to growing
recession concerns. Narrative of peak Fed hawkishness weighs on the dollar, which trades defensive against most G-10 peers. Scandinavian currencies lead gains as oil prices consolidate, essentially paring back Thursday losses; the yen is little changed versus
the dollar both on the day and on a weekly basis. USD/JPY rises 0.1%, US$ Index -0.1%, GBPUSD +0.05%, EURUSD flat, AUDUSD +0.2%, USDCHF -0.5%

Bitcoin +1.7%, Ethereum +6.9%. According to a Twitter announcement, Coinbase users may soon be able to send and receive
Ethereum (ETH), Polygon (MATIC) and USD Coin (USDC) on Polygon over the upcoming month. For the first time, Coinbase has made it possible to send and receive these assets on an L2 or sidechain.  U.S. crypto firm Harmony said on Friday that thieves stole around
$100 million worth of digital coins from one of its key products, the latest in a string of cyber heists on a sector long targeted by hackers. The California-based company said the heist hit its Horizon “bridge”, a tool for transferring crypto between different
blockchains. Over $1 billion has been stolen from bridges so far in 2022.

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:

• Altria (MO) raised to equal-weight at Morgan Stanley; PT $43
• Aurora Cannabis (ACB CN) raised to overweight at Cantor; PT C$4.05
• Becton Dickinson (BDX) raised to overweight at Wells Fargo; PT $275
• Medexus Pharmaceuticals (MDP CN) raised to speculative buy at Canaccord
• Progressive (PGR) raised to market perform at KBW; PT $107
• Sunoco (SUN) raised to buy at Mizuho Securities; PT $44
• Tetra Technologies (TTI) raised to buy at Johnson Rice; PT $7
• Wolfspeed Inc (WOLF) raised to buy at Goldman; PT $108

DOWNGRADES:

• 8×8 (EGHT) cut to inline at Evercore ISI; PT $6
• Ameriprise (AMP) cut to neutral at Goldman; PT $270
• Assurant (AIZ) cut to neutral at Piper Sandler; PT $185
• Baxter (BAX) cut to equal-weight at Wells Fargo; PT $71
• Denny’s (DENN) cut to neutral at Wedbush; PT $10
• F-star Therapeutics Inc (FSTX) cut to market perform at SVB; PT $7
• Futu Holdings ADRs (FUTU) cut to neutral at JPMorgan; PT $55
• HB Fuller (FUL) cut to underweight at JPMorgan; PT $52
• Stella-Jones (SJ CN) cut to buy at TD; PT C$45

INITIATIONS:

• Agilon Health (AGL) rated new neutral at BTIG
• Amyris (AMRS) rated new neutral at JPMorgan
• Bausch + Lomb (BLCO CN) rated new outperform at Evercore ISI; PT $21
• Biote (BTMD) rated new outperform at Cowen; PT $11
• Caleres (CAL) rated new buy at Seaport Global Securities; PT $35
• Cano Health (CANO) rated new outperform at Raymond James; PT $8
• Core Scientific (CORZ) rated new outperform at Cowen; PT $3.10
• CytomX (CTMX) rated new outperform at BMO; PT $9
• Denali Therapeutics (DNLI) rated new buy at Berenberg; PT $39
• Exelixis (EXEL) rated new outperform at BMO; PT $28
• Inter (INTR) rated new overweight at JPMorgan; PT $8
• Iron Mountain (IRM) reinstated overweight at Barclays; PT $58
• Lucero Energy Corp (LOU CN) rated new buy at Stifel Canada; PT C$1.30
• Marathon Digital Holding (MARA) rated new market perform at Cowen
• Nuvalent (NUVL) rated new outperform at BMO; PT $28
• PepsiCo (PEP) rated new neutral at President Capital Management
• Seagen (SGEN) rated new market perform at BMO; PT $169
• Shopify (SHOP CN) resumed equal-weight at Morgan Stanley; PT $450
• SpringBig (SBIG) rated new buy at Jefferies; PT $4.50
• StorageVault Canada (SVI CN) rated new outperform at RBC; PT C$8
• Y-mAbs (YMAB) rated new outperform at BMO; PT $27

David Wienke

Cabrera Capital Markets, LLC