Cabrera Capital Daily Game Plan

Monday September 19, 2022                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES    
10:00ET NAHB Housing Market Index  

TODAY’S HIGHLIGHTS:  

• 2 killed and 260,000 left without power after Typhoon Nanmadol batters
  Japan

Global markets are in the red as investors await the Federal Open Market Committee’s interest-rate decision on Wednesday
as central banks around the world seek to quash inflation. Investors also face potential volatility from policy decisions this week by the Bank of England, the Bank of Japan and a host of other central banks. Activity was muted by a holiday in Japan and the
UK observing a day of mourning for Queen Elizabeth II, with no trading in cash Treasuries during the Asian and European sessions.  Bermuda and Chile were also closed today. On the geo-political front, President Biden said US forces would defend Taiwan in the
event of a Chinese invasion, drawing an angry response from China that said it sent the wrong signal to those seeking an independent Taiwan. Biden made the remark during an interview with “60 Minutes” that aired Sunday.                      

EQUITIES: 

US equity futures are lower in a cautious start to the week as investors await a slew of interest rate decisions in the days ahead. Stocks slumped
last week following a higher-than-expected reading on US inflation, which added to concern that the Fed will stick to its hawkish path. Economists predict the central bank will raise its key interest rate by 75 basis points mid-week  

Ahead of the bell: E-mini S&P futures -0.95%, Nasdaq -1.00%, Russell 2000 futures -1.05%, Dow futures -0.8%SPX has an initial target extension
with a weekly breakout of the triangle formation near the 200 week
mvg avg.

In pre-market trading, Array Technologies (ARRY) gains 3% after it was upgraded to overweight from neutral at Piper Sandler.
Bluebird Bio (BLUE) gained 7.4% after its gene therapy for a brain-wasting disease received accelerated approval from US regulators. FOXO Technologies (FOXO) surges 25% after tumbling 52% on its debut on Friday. Larimar Therapeutics (LRMR) gains 5% after William
Blair upgraded the stock to outperform. Take-Two Interactive Software (TTWO) falls 4.5% after a hacker published pre-release footage from development of Grand Theft Auto VI, its most anticipated video game. 

European stocks fell further after their biggest weekly decline in three months. The Stoxx Europe 600 Index slipped 0.7%,
led lower by energy and tech stocks. Trading was thin with British markets closed for Queen Elizabeth II’s state funeral.  DAX -0.5%, CAC -1.1%. Energy -1.6%, Tech -1%, Construction -1%, Financial Services -0.95%, Retail -0.15%.

Shares in Asia fell, dragged lower by consumer discretionary and tech shares. MSCI’s  Asia Pacific stock index has clocked
five consecutive weeks of losses as investors factor in higher US interest rates and a strong dollar. Benchmarks in Hong Kong and South Korea were among the worst performers in the region.  The stronger US dollar put pressure on regional currencies, and stocks
tumbled in the Philippines, Malaysia and Vietnam.  China stocks traded little changed as megacity Chengdu exited a lockdown. Shares of Vietnamese banks fell after the country’s central bank said it aims to keep its credit growth cap at 14% for 2022, ruling
out speculation the regulator will ease lending limits. Vietnam -2.3%, Philippines -1.7%, Kospi -1.1%, Hang Seng Index -1%, Shanghai Composite -0.35%, ASX 200 -0.3%, Sensex +0.5%.  

FIXED INCOME: 
                                        

Treasuries re-open with yields cheaper by up to 5.5bp across front end of the curve in a bear flattening move.  10 year
yield hit 3.5%, its highest since 2011. Cash market was closed overnight as UK observes a day of mourning for Queen Elizabeth II.  The long end is outperforming slightly, flattening 2s10s, 5s30s spreads by 0.5bp and 1bp on the day.   IG dollar issuance slate
empty so far; up to $20b expected for the week with Monday and Tuesday potentially busy ahead of Wednesday’s FOMC.                  

METALS: 
                               

Gold is lower again, with investors bracing for a Federal Reserve rates decision that risks putting more pressure on the
precious metal.  Spot gold is down 0.7%, extending a slump over the past month in the face of the dollar’s relentless gains.  Silver -1.2%.                                                                         

ENERGY:      

Oil prices slid, after a third straight losing week, pressured by the stronger dollar and recession fears. WTI fell 1.9%
last week, while Brent dropped 1.6%, with analysts tying weakness to fears of a sharp global economic slowdown or recession as major central banks, particularly the Federal Reserve, aggressively raise interest rates in a bid to bring down stubbornly high inflation.
Global oil demand fell by an estimated 1.1 million barrels per day in July, the latest data from the Joint Organizations Data Initiative (JODI) showed on Monday. Historically, global oil demand normally rises rather than falls in July. The demand decline was
driven by drops in consumption in China, India, Indonesia, developed European economies, and Saudi Arabia, according to JODI. WTI -2.5%, Brent -2.3%, US Nat Gas -3.2%.      

CURRENCIES:  
                     

The US dollar held firm near two-decade highs as investors prepared for a packed week of central bank meetings which will
see borrowing costs rise globally, with the chance of a super-sized hike in the United States. The British pound sank to its weakest level against the dollar since 1985.  The yuan fell, an indication that China’s latest attempts to beef up the currency with
a record pushback in the reference rate and verbal warnings is barely holding back a selling wave. The yuan’s decline weighed on the Australian and New Zealand dollars. US$ Index +0.2%, USDJPY +0.45%, GBPUSD -0.4%, EURUSD -0.2%, AUDUSD -0.6%, NZDUSD -0.8%. 
                

Bitcoin -5%;  Ethereum -4.5%.  Bitcoin fell below $19,000 while Ether extended its drop after its blockchain was upgraded
last week.   

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:

• Acadia Realty (AKR) raised to buy at Citi; PT $17
• Array (ARRY) raised to overweight at Piper Sandler; PT $28
• D.R. Horton (DHI) raised to overweight at KeyBanc; PT $84
• EQT Corp (EQT) raised to outperform at BMO; PT $65
• Essex Property (ESS) raised to buy at Citi; PT $295
• Healthcare Realty Trust (HR) raised to buy at Citi; PT $28
• Heico (HEI) raised to buy at Jefferies; PT $180
• Innovative Industrial (IIPR) raised to buy at Compass Point; PT $175
• KB Home (KBH) raised to sector weight at KeyBanc
• Kite Realty (KRG) raised to buy at Citi; PT $22
• Larimar Therapeutics Inc (LRMR) raised to outperform at William Blair
• Lennar (LEN) raised to overweight at KeyBanc; PT $89
• Meritage Homes (MTH) raised to overweight at KeyBanc; PT $87
• Netflix (NFLX) raised to outperform at Oppenheimer; PT $325
• Nordic American Tankers (NAT) raised to buy at Cleaves Securities
• Obsidian Energy Ltd (OBE CN) raised to market perform at BMO; PT C$14
• PulteGroup (PHM) raised to overweight at KeyBanc; PT $47
• ShaMaran Petroleum (SNM CN) raised to buy at SpareBank
• Toll Brothers (TOL) raised to sector weight at KeyBanc
• TopBuild (BLD) raised to overweight at KeyBanc; PT $205
• Tricon (TCN CN) raised to buy at Citi; PT C$16.60

DOWNGRADES:

• Adobe (ADBE) cut to equal-weight at Wells Fargo; PT $310
• Adobe (ADBE) cut to hold at Edward Jones
• Empire Co (EMP/A CN) cut to reduce at Veritas Investment Research Co
• Essex Property (ESS) cut to neutral at Mizuho Securities; PT $264
• Fidelity National (FIS) cut to market perform at KBW; PT $98
• Hudson Pacific (HPP) cut to neutral at Citi; PT $13
• Huntsman (HUN) cut to sector perform at RBC; PT $30
• Kilroy (KRC) cut to neutral at Citi; PT $50
• NCR (NCR) cut to equal-weight at Morgan Stanley; PT $27
• Retail Opportunity (ROIC) cut to neutral at Citi; PT $17
• Tronox (TROX) cut to market perform at BMO; PT $16
• UDR (UDR) cut to neutral at Mizuho Securities; PT $46
• Venator Materials (VNTR) cut to underperform at BMO; PT 60 cents

INITIATIONS:

• AgileThought (AGIL) rated new overweight at Cantor; PT $6
• Automotive Properties (APR-U CN) reinstated hold at Industrial Alliance
• BK Technologies (BKTI) rated new buy at ThinkEquity; PT $6
• Choice Properties REIT (CHP-U CN) rated new buy at Industrial Alliance
• First Capital REIT (FCR-U CN) rated new buy at Industrial Alliance; PT C$19
• Gaming and Leisure (GLPI) rated new outperform at RBC; PT $54
• Gossamer Bio (GOSS) rated new outperform at Wedbush; PT $24
• Intuit (INTU) rated new market perform at CICC; PT $416
• QuidelOrtho (QDEL) rated new neutral at Citi; PT $90
• Reunion Gold (RGD CN) rated new outperform at BMO
• Rubicon Technologies (RBT) rated new buy at Jefferies; PT $10
• SmartCentres REIT (SRU-U CN) rated new hold at Industrial Alliance; PT C$30
• Zillow (ZG) rated new buy at Compass Point; PT $50

David Wienke

Cabrera Capital Markets, LLC