Cabrera Capital Daily Game Plan

Tuesday December 1, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:   
9:45ET Markit manufacturing PMI ; 9:45ET ISM manufacturing index;
10:00ET  Construction spending, Powell and Mnuchin testify before
Senate Banking Committee; 12:00ET BIDEN TO INTRODUCE KEY ECONOMIC TEAM MEMBERS,  Fed's Brainard speaks; 1:15ET Fed's Daly speaks; 3:00ET Fed's Evans speaks

TODAY’S HIGHLIGHTS: 

• Hong Kong is part of China, The US should immediately stop meddling in Hong Kong affairs; We urge the US to stop arms sales and military links with Taiwan
  – China Ministry of Foreign Affairs
• Fears over supply chain from COVID-19 cases in imported Russian seafood
  link
• California’s COVID19 hospitalizations have increased by 89% in the last two weeks – Gov Newsom
• Iran's leader promises retaliation for killing the architect of a secret Iranian nuclear weapons program
• China provided North Korean leader Kim Jong Un and his family with an experimental covid vaccine
• Moderna, Pfizer-BioNTech apply for EU emergency authorization for COVID-19 vaccine
• U.S. Covid Cases Found as Early as December 2019, Study Says
• BIPARTISAN GROUP OF SENATORS TO UNVEIL $908B AID PACKAGE: Washington Post
  
  link

Global stocks are starting December on a bullish note as upbeat factory data from Asia is helping riskier assets.  After a record month for global
stocks, risk on continues for the rally that has been fueled by vaccine breakthroughs. Pfizer and partner BioNTech have sought regulatory clearance for their Covid-19 vaccine in the European Union and BioNTech said it could start shipping the first doses “within
hours” after approval. The OECD lowered its 2021 global growth forecast to 4.2% from 5%, saying lockdowns may continue for some time with rising risks of permanent damage. There were large downgrades for the UK, with the forecast slashed to 4.2% from 7.6%.
The US projection was cut to 3.2% from 4%.

EQUITIES: 
 

US stock-index futures rose sharply, with equities aiming to build on a historic November rally that was fueled partly by optimism over progress
toward a COVID-19 vaccine. With manufacturers seeking emergency approval from governments in the US and Europe, prospects for widespread distribution by early next year stoked expectations for a broader economic recovery.  Vice President Pence signaled a swift
response from US regulators, saying that distribution of a vaccine could begin as early as the third week in December. Investors will pay close attention to congressional testimony this morning by Federal Reserve Chairman Jerome Powell and Treasury Secretary
Steven Mnuchin

December E-mini S&P futures +0.95%, Nasdaq +0.85%, Russell 2000 futures +1.3%%, Dow futures +1%. 3634 is initial key in ES to start the day.

Most of Novembers biggest advancing issues were huge laggards on the year and just eating away at losses.  Occidental Petroleum (OXY) is the
leading gainer in the S&P 500, up over 78% on the month, but still down 60% on the year. The six biggest gainers last month were all in the energy sector (OXY, FANG, APA, DVN, FTI, MRO). OXY is up 2% in pre-market trading and remains positive s/t above its
200dma.

Small Caps were the best performers in November with the Russell 2000 gaining 18%, its best month ever.

European equities are trading higher, reversing Monday’s late sell off, on optimism around a coronavirus vaccine while Euro-area finance ministers
struck a deal on a long-planned overhaul of the region’s bailout fund.  Cyclical shares led the Stoxx Europe 600 Index higher as banks, miners and energy firms climbed. UK stocks were up 2% after Goldman Sachs strategists called them a buy ahead of a Brexit
trade deal. UK house prices jumped 6.5% on the year in November, the fastest pace in almost six years. Manufacturing PMI expanded at the fastest pace since 2017, rising to 55.6 from 53.7.  Euro zone inflation remained in negative territory for the fourth straight
month, holding steady at -0.3%. Basic Resources sector is up 2.8%, Banks +2.2%, Oil & Gas +2.1%, Autos +1.7%, Travel & Leisure +1.4%. CAC +1%, DAX +0.9%, Stoxx 600 +0.75%.

Asian stocks gained, led by the finance and materials sectors. The Topix added 0.8%, with Daikin and Shin-Etsu Chemical contributing the most
to the move. The Shanghai Composite Index rose 1.8%, driven by China Merchants Bank and ICBC. Chinese lenders resumed their rally from last week, on improved outlook or profitability and higher lending rates. Strong economic data from Asia added support to
the positive mood as factory activity in some of Asia’s biggest export-led economies rebounded in November while China’s recovery continues to lift the region. China’s Caixin manufacturing PMI, a small firm exporter survey, rose to a decade high 54.9 from
53.6 in October, beating forecasts for a decline to 53.5. South Koreas PMI rose to 52.9, its highest reading since early 2011. Japan picked up to 49, the best since August 2019 and Taiwan's climbed to 56.9. Kospi gained 1.65%, Japan’s Nikkei rose 1.35%, and
India’s Sensex climbed to a new record high +1.15%

FIXED INCOME: 
 

Treasuries are cheaper by 2bp across at long end of the curve in early US trading. Price action has been subdued since yesterday’s uneventful
month-end index rebalancing. Yields remain anchored across front end of the curve, steepening 2s10s, 5s30s by 1.4bp each.

METALS: 

Spot Gold rose 1.7%, rebounding from a five-month low, on a weaker dollar and as rising coronavirus cases. Gold recorded its worst monthly decline
in four years yesterday as investors flocked to riskier assets. Gold futures have pulled half way back from the year’s big move off the March lows. Remains negative below 1845-1855 area. Copper is gaining upside momentum and we will look for a test of the
$4 area.

ENERGY:  

Oil erased earlier losses as OPEC+ sought more time to reach a deal on production policy. OPEC+ talks were delayed for two days, after a tense
meeting on oil production broke down without an agreement. Saudi Arabia’s energy minister said he may resign as co-chair of a key OPEC+ panel as new cracks emerged in the relationship between the United Arab Emirates and other states. The UAE is calling on
those who have previously breached their quotas to commit to full compliance before making a deal. Talks are expected to continue by phone before the OPEC+ meeting on Thursday.

WTI and Brent remain positive after breaking out above their 200 day moving averages

CURRENCIES:  

The pound advanced to the highest level in three months as anticipation grows that the UK and European Union may strike
a trade deal soon. The Irish Prime Minister told the Irish Times he is hopeful for a Brexit deal by the end of the week.  Sterling rose 2.9% in November, its best month since 2006. The euro was close to a three-month high as the US dollar fell on expectations
of more monetary stimulus from the United States and a strengthening recovery elsewhere pushed up riskier currencies. Attention today will be on Fed Chair Jerome Powell and Treasury Secretary Mnuchin who testify before Congress on the CARES Act. The RBA kept
its key interest rate at 0.1% as expected and Australia's central bank said it will keep the size of the bond purchase program under review and is prepared to do "more if necessary."

Spot US$ Index is testing the key target support area and we look for a pause here…

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

• CRBP +49.2% (+$0.60);
• CFII +17.2% (+$1.72); View to Merge With Cantor Fitzgerald’s Blank-Check Company
• CAAS +17.1% (+$1.80)
• KXIN +14% (+$0.91)
• XONE +13.3% (+$1.58)
• TDAC +11.9% (+$1.45)
• ALT +11.7% (+$1.43)
• MRNA +11.3% (+$17.2); Moderna PT Raised at Argus
• DL +10% (+$0.87); China Distance Education Gains After Entering Going-Private Deal
• ABUS +9.9% (+$0.45)
• LI +9.9% (+$3.56)
• AXSM +9.3% (+$6.71); Axsome Therapeutics Says AXS-05 Trial Shows Positive Results
• IDT +9.1% (+$1.08); Calvert Backs IDT on 0 of 5 Proposals at Dec. 16 Annual Meeting
• SPCE +7.2% (+$1.92); Virgin Galactic Gains Afterhours for Scoring NASA Contract
• SOL +7.2% (+$0.57)
• NVAX +7.2% (+$10.0)
• FREE +6.9% (+$0.57); Whole Earth Poised to Be Disruptor Like Beyond Meat, Cantor Says
• TMHC +6.8% (+$1.72)
• CMC +6.7% (+$1.34)
• TSLA +5% Tesla to join S&P 500 all at once on Dec. 21
  

Decliners

• NERV -17.5% (-$0.68)
• TOUR -14.9% (-$0.42)
• DPW -11.4% (-$0.62); DPW Holdings Reports Amended “At Market” Offer Stock
• APEN -10% (-$0.48)
• QS -9% (-$4.25)
• ZM -6.3% (-$30.0); Zoom Shares Slide Premarket as Analysts Mull Post-Pandemic World
• CVAC -5.7% (-$6.04)
• KNDI -5.7% (-$0.56)
• BLCT -5.7% (-$0.79)
• MARA -5.6% (-$0.35)
• NOVA -5.2% (-$2.11); Sunnova Energy Offering Prices 3.5m Shares at $37/Share
• NKLA -4% (-$0.82); Nikola Slides While Bullish Analysts Continue to Pound the Table
• SAMA -3.7% (-$0.45)
• FSLR -3.7% (-$3.43); First Solar Downgraded at Barclays With Focus on ‘Margin Cliff’
• DADA -3.4% (-$1.95); Dada Nexus Offers 9 Million Shares in Placement: Terms
• BTBT -3.3% (-$0.27)
• RIOT -3.2% (-$0.27)
• MSTR -3.1% (-$10.6)

David Wienke

Cabrera Capital Markets, LLC