Cabrera Capital Daily Game Plan

Monday September 28, 2020                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES: 
European Central Bank president Christine Lagarde gives testimony to the European Parliament at 9:45ET where she is expected to call for more fiscal stimulus. 10:30ET Dallas Fed Manufacturing; 2:00ET Fed’s Mester speaks

Investors are bracing for a busy week of politics, with U.S. presidential candidates set to debate tomorrow, while the U.K. and European Union
are starting a key round of Brexit talks.

TODAY’S HIGHLIGHTS:

• The number of tests coming back positive for COVID-19 is topping 25% in several states in the U.S. Midwest,
  according
  to a Reuters analysis.
  
• Supreme Court nominee Barrett readies for meetings this week on Capitol Hill
  
• Trump paid just $750 in federal income taxes in both 2016 and 2017, New York Times reported
  link. The president said the story “is a total fake,” refusing to release his returns until an audit is complete.
• Japan to remove travel ban for ten countries starting in October: Nikkei
  
• Trump’s ban on TikTok was temporarily blocked by a federal judge
• The world’s first shipment of blue ammonia is on its way from Saudi Arabia to Japan, where it will be used in power stations to produce electricity without
  carbon emissions 

Global indexes across the world are posting strong gains after data over the weekend showed profits at China’s industrial firms grew for the
fourth straight month in August, giving a boost to equity markets. European Central Bank president Christine Lagarde gives testimony to the European Parliament at 9:45ET where she is expected to call for more fiscal stimulus. The global death toll from Covid-19
will likely pass 1 million today, with cases already above 33 million. Experts say the true number that have died may be almost twice the official tally.

EQUITIES:

U.S. stocks future indexes advanced, tracking solid gains in European and Asian markets amid optimism that the recent selloff in equity markets
is overdone.  S&P futures extend Friday’s rally to revisit the short term key 50dma. Speaker Pelosi said on Sundary that there’s a chance she and Treasury Secretary Mnuchin can still reach a deal on a coronavirus stimulus package. She added that if a deal
isn’t struck soon, Democrats might vote on a House-only version of a coronavirus relief package, including funds for airlines and restaurants, and more Paycheck Protection Program funding. Uber is up more than 4% pre-market after winning a long-running legal
battle on Monday that will allow it to continue operating in London.

December E-mini S&P futures +1.25%,
Nasdaq +1.65%, Russell 2000 futures +1.4%, Dow futures +1.3%. SPX held the .618 retracement from the June low and has initial key short term resistance at the 50 day moving average of 3351. The .382 retracement is 3354, so use this area as key for today.

The NYSE FANG+ Index held the short term key (50dma), helping sentiment in broader indices.

Bank sector ETF holds key short term Fibonacci support.

European stocks rose, rebounding from their biggest weekly drop in more than three months.  The Europe Stoxx 600 Index rose 2% as banks led the
advance among sectors. HSBC shares rise as much as 12%, the most since April 2009, after its biggest shareholder China’s Ping An Insurance Group boosts its stake to 8%. Cyclicals outperformed, with a report over the weekend showing a fourth month of growth
in Chinese industrial profits. Gunnebo AB jumped 32% after Altor Fund Manager and Stena Adactum made a recommended public offer to its shareholders. Autos and Travel& Leisure are next best performing sectors, up over 3%. DAX +2.85% after holding above its
200dma; CAC +2.1%, FTSE 100 +1.5%.

Asian stocks mostly gained, led by IT and industrials. Most markets in the region were up, with Taiwan’s Taiex Index gaining 1.9% and Japan’s
Topix Index rising 1.7%, while Jakarta Composite dropped 0.8%. The Shanghai Composite Index was little changed. Indian shares rose 1.6%, led by banking stocks on hopes that the government may offer support and infuse some capital into the sector. Hong Kong
stocks climbed, boosted by robust gains for financial and properties firms, after profits at China’s industrial firms grew. China Evergrande Group surged 20.6% after saying its debt-cutting measures were working and the Hong Kong bourse had approved its spinoff
plan. Australian shares closed lower in a low-volume session, with financials and consumers stocks weighing the most.

FIXED INCOME:

Treasuries drift lower, led by the long end of the curve as equities rally. Risk-on backdrop weighs on long-end with S&P 500 e-minis higher by
more than 1%. U.S. jobs data in focus this week, with ADP figures due Wednesday and official monthly payrolls data on Friday. IG credit issuance slate includes AngloGold Ashanti Holdings 10Y; $25bn expected to price this week.

METALS:

Gold erases earlier losses, barely taking advantage of a weaker dollar. Positive economic data from China provided a flip to risk-sentiment,
denting the appeal of the safe-haven metal ahead of the first presidential election debate between President Trump and Democratic rival Joe Biden. December Gold futures are hovering above the initial key Fibonacci retracement support.* Look for some upside
from here early in the week.

ENERGY:

WTI crude erased an earlier decline as the US dollar fell and equities gained. The oil market, however, still faces an uncertain outlook with
an executive at trading giant Vitol Group saying prices have little room to gain in the fourth quarter because the demand recovery is slowing amid new coronavirus restrictions. The recovery will be long and gradual, Russian Energy Minister Novak said on Sunday,
estimating global demand this year will drop by as much as 10% from a year earlier. Additional supply from Libya is adding to those worries. After a blockade was partially lifted last week, output in the OPEC member has almost tripled to 250,000 barrels a
day.

After holding the initial key Fibonacci retracement support (.382) we will continue to view the
50
and 200 day
moving averages as pivotal resistance.

CURRENCIES:

The pound advanced 1.25% versus the dollar on signs of optimism about this week’s final scheduled round of Brexit trade negotiations. Discussions
between the European Union’s chief Brexit negotiator, Michel Barnier, and his British counterpart, David Frost, begin tomorrow. A rebound in U.S. stocks has helped to curb the ascent of the dollar, considered a safe haven. The US dollar is lower by 0.45% after
reaching a two-month high last week and posted its biggest weekly rise since early April. Speculators continue to hold a big net short position in the currency. Investors now look to the first U.S. Presidential debate tomorrow.

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

• PLL +265.5% (+$29.2); Piedmont Lithium Signs Sales Agreement With Tesla
• GNFT +48.9% (+$2.05); Genfit Signs Liver Disease Test Accord With LabCorp; Shares Jump
• WPX +16% (+$0.71); Devon to Buy WPX for $2.56 Billion to Expand in Permian Shale
• SHLL +14.8% (+$6.55)
• GRAF +14% (+$2.85)
• DVN +13.8% (+$1.22); Devon to Buy WPX for $2.56 Billion to Expand in Permian Shale
• QTNT +12.8% (+$0.66); Quotient Limited Gets EUA for MosaiQ Covid-19 Antibody Test
• UMC +12.3% (+$0.52)
• FMCI +12.2% (+$2.71)
• HGEN +11.6% (+$1.13)
• HSBC +10% (+$1.81)
• ORTX +9% (+$0.40); Orchard Therapeutics Gets EMA Prime Designation for OTL-203
• MT +9% (+$1.09)
• SPCE +8.8% (+$1.44); Virgin Galactic Rated New Positive at Susquehanna
• CLF +8.7% (+$0.51); Cleveland-Cliffs Agrees to Buy ArcelorMittal USA for About $1.4b
• CZR +8.5% (+$4.86); Caesars Says $3.7 Billion Bid High Enough for William Hill
• DPHC +8% (+$1.91)
• OAC +7.7% (+$0.83)
• DEO +7.5% (+$9.66)
• SBE +7.3% (+$1.01)
• WKHS +7.2% (+$1.79); Hedge Fund Bets on Lithium Miner After Big Electric Vehicle Win
• VNET +7.2% (+$1.48)

Decliners

• INO -35% (-$5.93); Inovio Covid-19 Vaccine Study Stalled Over FDA Questions
• AQST -34% (-$2.59); Aquestive Therapeutics Gets FDA CRL for Libervant
• CBAT -15.5% (-$0.38); CBAK Energy Technology Inc Rises: Chinese U.S. Listings
• SPI -7.4% (-$0.74)
• VIPS -2.7% (-$0.46); Vipshop Holdings ADRs Cut to Underweight at Morgan Stanley
• KLAC -2.6% (-$4.91); Chipmaker Analysts See Limited New Risk From SMIC Restrictions

David Wienke

Cabrera Capital Markets, LLC