Cabrera Capital Daily Game Plan

Friday December 2, 2022                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES   
8:30ET Employment Report*; 9:15ET Fed’s Barkin speaks; 10:15ET Fed’s Evans speaks

US Labor Nov Nonfarm Payrolls +263K
– Median estimate for November jobs report’s employment change was 200k; crowd-sourced whisper number was 187k. Hourly earnings
YOY 5.1% vs 4.6% expected and Oct numbers revised up from 4.7% to 5.1%.  

TODAY’S HIGHLIGHTS:  

• Ye suspended from Twitter by Musk
  
• Facebook Has Threatened to Block News Sharing in Canada – WSJ
  
• Reckitt expects U.S. infant formula shortage until spring
  

Global stocks are reflecting a cautious mood today, steadying after recent sharp gains as traders awaited the key risk event
for today in the US jobs report.  Recession concerns have become more pronounced after data on Thursday showed November factory activity sliding in a range of countries, with American manufacturing contracting for the first time since May 2020. President Biden
says he has no immediate plans to contact Vladimir Putin but is prepared to speak with Russia’s president if he shows an interest in ending the war in Ukraine, and only in consultation with NATO allies.                             

EQUITIES:  futures sinking after the payrolls report

US stock futures were muted ahead of the payroll data as investors awaited the latest jobs report for clues around the strength of the domestic
economy as well as its impact on the outlook for rate hikes. All eyes today are on the November non-farm payrolls report, with economists expecting it to show signs that labor demand is ebbing. Still, they say a bigger slowdown is needed to bring that more
in line with labor supply in order to contain the wage growth that’s helped fuel inflation. BofA strategists said they are “selling risk rallies from here,” warning unemployment would replace inflation as the main worry in 2023.   FUTURES ARE FALLING SHARPLY
AFTER THE SURPRISINGLY STRONG PAYROLLS REPORT.    

Stock futures slumped and bond yields jumped after a solid jobs report added to concern the Federal Reserve’s policy will remain tight for longer.
Nonfarm payrolls increased 263,000 last month and the unemployment rate held at 3.7%. Average hourly earnings rose twice as much as forecast after an upward revision to the prior month.            

Futures ahead of the employment data: E-mini S&P -0.01%, Nasdaq -0.25%, Russell 2000 -0.1%, Dow -0.2%.  

Among notable movers in premarket trading, Marvell Technology dropped 5% after the US chipmaker issued a tepid sales forecast
for the fourth quarter. Zscaler fell 9% after the cloud security company gave a forecast for calculated billings that fell slightly short of estimates. Anavex Life Sciences Corp. (AVXL) jumped as much as 38% after the company said its therapy for mild cognitive
impairment due to Alzheimer’s disease met the primary endpoints in a Phase 2b/3 clinical trial.  Asana (ASAN) shares slumped as much as 15% after the software firm’s revenue forecast for the fourth quarter disappointed. Paycor HCM (PYCR) is 5.2% lower after
the offering priced via Goldman Sachs. The deal was upsized to 6m shares from 5m. Samsara (IOT) shares are up 26% after the software company reported third-quarter results that beat expectations and boosted its year revenue outlook. Smartsheet (SMAR) gained
11% on strong quarterly results that beat across the board. UiPath (PATH) shares jump 11% after the software company reported third-quarter revenue that beat.

European stocks traded steady after closing at the highest level since June Thursday, as investors weigh concerns over recession
and the labor market against bets on slower rate hikes and China’s reopening. German exports fell more than expected in October, as high inflation and supply chain snags hit demand in its key trading partners, further raising the specter of recession for Europe’s
largest economy. The Stoxx 600 index reversed opening losses to trade roughly flat. Miners and energy led declines while the real estate and retail sectors outperformed. The main regional benchmark is set for its seventh week of gains, the longest winning
streak since April 2021. Among individual moves, Ageas SA and Assicurazioni Generali SpA gained after KBW raised its rating on the stocks, while Kerry Group Plc dropped, heading for a seventh day of declines, after Citi downgraded the shares to neutral from
buy.  Credit Suisse Group jumped over 8% after its chairman said the bank had managed to essentially halt the outflow of assets. DAX +0.5%, CAC is flat, FTSE 100 -0.2%. Real Estate +2%, Retail +1%.  Energy -1%, Basic Resources -0.6%.  

Asian shares dropped for the first time in four days as investors sold off some positions ahead of a key jobs report in
the US and the upcoming Politburo meeting in China. Foreign funds pumped about $15.7 billion into emerging Asia shares outside China last month, the biggest inflows in two years, data showed. The MSCI Asia Pacific Index declined as much as 0.9%, with most
sectors in the red, led by energy and utility stocks. Benchmarks in Japan and South Korea were among the worst performers as investors await more signs of China’s reopening and economic policy at an upcoming meeting of the country’s top leaders. Some stocks
related to sports and entertainment climbed in Tokyo after Japan’s surprise defeat of Spain to advance to the next round of the World Cup. MSCI Asia Pacific Index -0.4%. Philippines led losses, down 3.6%, followed by Korea’s Kospi -1.8%, Japan’s Topix -1.6%,
ASX 200 -0.7%, Sensex -0.65%, China’s CSI 300 -0.6%, Hang Seng -0.3%. Vietnam bucked the trend, up 4.2%, Hang Seng Tech +1%.    

FIXED INCOME: 
                                        

Treasuries are mixed with the curve steeper as 2- to 5-year yields decline to lowest levels in several weeks; 2s10s approaches
Wednesday’s high. Bunds outperform in bull-steepening price action. Focal points of US session include November jobs report and final Fed speakers before quiet period commences ahead of Dec. 14 policy decision.     

METALS: 
                               

Gold edged lower ahead of the monthly report on the state of the US labor market, a day after bullion posted the largest
one-day gain in more than two years.  China’s moves to relax strict virus controls are driving optimism that there will be a growth recovery in Asia’s largest economy, which could lend more support to metals.  Spot gold -0.2%, silver is flat.           

ENERGY:      

Oil is higher and headed for its biggest weekly gain in almost two months, benefiting from looser Chinese curbs, calls by
the Biden administration to halt sales from US strategic reserves and an OPEC producers’ group decision to cut crude supply by the most since 2020. Group leader Saudi Arabia led the reduction, lowering output by 470,000 barrels a day, while substantial cutbacks
were also implemented by Kuwait and the United Arab Emirates.  As the West moves to intercede in oil trading, OPEC Plus, led by Saudi Arabia, is expected to protect its own interests.  Oil officials from OPEC and Russia will meet on Sunday to consider production
levels, just hours before the European Union begins an embargo of Russian oil and amid intense talks to set a price ceiling on Kremlin’s crude.  WTI +0.9%, Brent +0.75%.        

CURRENCIES:  
                     

The US dollar slipped for the fourth straight day to its lowest level since June as investors awaited the release of US
non-farm payrolls data for clues on the extent of potential slowdown in the Federal Reserve’s policy tightening. The Japanese yen outperformed, rising for a fifth day amid improved sentiment. South Africa’s rand rebounded, paring much of Thursday’s 2.6% drop.
The rand has bucked this week’s upswing in emerging market currencies because of political turmoil swirling around President Cyril Ramaphosa. Top leaders of the ruling African National Congress close ranks behind Ramaphosa ahead of a meeting where the party
will decide his fate. US$ Index -0.25%, GBPUSD +0.2%, NZDUSD +0.5%, EURUSD +0.1%                        

Bitcoin +1%;  Ethereum +1%.     

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:

• TD Bank (TD CN) raised to buy at Canaccord; PT C$103
• UDR (UDR) raised to overweight at Morgan Stanley; PT $47

DOWNGRADES:

• Asana (ASAN) cut to neutral at Baird; PT $15
• Asana (ASAN) cut to neutral at Piper Sandler; PT $16
• AvalonBay (AVB) cut to equal-weight at Morgan Stanley; PT $187
• Black Knight (BKI) cut to equal-weight at Barclays; PT $65
• Blackstone Inc (BX) cut to equal-weight at Barclays; PT $90
• Bright Horizons (BFAM) cut to equal-weight at Barclays; PT $75
• CIBC (CM CN) cut to sector perform at RBC; PT C$69
• DoorDash (DASH) cut to sector perform at RBC; PT $60
• Ecolab (ECL) cut to equal-weight at Barclays; PT $160
• Edwards Life (EW) cut to peerperform at Wolfe
• Hain Celestial (HAIN) cut to inline at Evercore ISI; PT $24
• National Storage (NSA) cut to neutral at Baird; PT $45
• Pebblebrook (PEB) cut to market perform at BMO; PT $18
• SQZ Biotech (SQZ) cut to neutral at HC Wainwright
• Salesforce Inc (CRM) cut to peerperform at Wolfe
• TC Energy (TRP CN) cut to hold at Industrial Alliance; PT C$64
• TransUnion (TRU) cut to equal-weight at Barclays; PT $65
• XPeng ADRs (XPEV) cut to hold at China Renaissance; PT $11.30

INITIATIONS:

• AMTI US (AMTI) rated new buy at Chardan Capital Markets; PT $3
• Amprius Technologies (KCAC/U) rated new buy at B Riley; PT $14
• Biohaven (BHVN) rated new buy at BTIG; PT $24
• Candel Therapeutics (CADL) rated new buy at HC Wainwright; PT $11
• Ciena (CIEN) rated new buy at Baptista Research; PT $54.90
• Coherent Corp (COHR) reinstated buy at Stifel; PT $48
• Coupang (CPNG) rated new buy at New Street Research; PT $25
• Cresco Labs (CL CN) rated new outperform at Wedbush; PT $4.50
• Curaleaf (CURA CN) rated new outperform at Wedbush; PT $8.50
• Dream Residential REIT (DRR/U CN) rated new sector perform at RBC; PT $9.50
• Enovix (ENVX) rated new buy at B Riley; PT $19
• Green Thumb Industries Inc (GTII CN) rated new outperform at Wedbush
• ImmunoPrecise Antibodies Ltd (IPA CN) rated new buy at HC Wainwright
• Lumentum (LITE) reinstated buy at Stifel; PT $68
• McDonald’s (MCD) rated new neutral at Fubon; PT $284
• Qualys (QLYS) rated new neutral at Piper Sandler; PT $138
• Solid Power (SLDP) rated new hold at Stifel; PT $5
• Trulieve Cannabis (TRUL CN) rated new outperform at Wedbush; PT $18
• Viavi (VIAV) reinstated hold at Stifel; PT $12
• ZeroFox (ZFOX) rated new hold at Jefferies; PT $5

David Wienke

Cabrera Capital Markets, LLC