Cabrera Capital Daily Game Plan

Friday May 12, 2023                                                                      Trading Desk:
(312) 236-8907

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

DATA/HEADLINES   8:30ET Import Price Index, Export Price Index; 10:00ET UofMich sentiment; 2:20ET Fed’s Daly speaks

TODAY’S HIGHLIGHTS:  

•  Marine vet surrenders to police in NYC subway chokehold death

Global stocks rose as investors found confidence in strong earnings and signs that US lawmakers are making progress on a deal to raise the debt ceiling.  Geopolitical
concerns eased on the news of a meeting between Biden and Xi. US National Security Adviser Jake Sullivan also met with China’s top diplomat Wang Yi. Globally, stock markets have seesawed this week on mixed US economic data and ongoing worries about the debt
ceiling. Two more days of strikes began today on the UK rail system and will bring much of the network to a standstill as workers escalate a protest over pay. Elsewhere, attention is turning to elections in Turkey and Thailand on Sunday. About $2 billion entered
global stock funds, while $13.8 billion went into cash funds and $6.3 billion into bonds, BofA said, citing EPFR Global data. 

EQUITIES: 

US equity futures traded higher after President Biden and House Speaker McCarthy postponed a meeting on the debt ceiling that was planned for today because staff-level
talks were yielding progress.  Bank of America strategists wrote in a note on Friday that a recession will “crack credit and tech” just as it did in 2008. Watch out for a surge in stock offerings as Corporate America hustles to raise cash before the ceiling
deadline hits, said Citi.  US data Thursday showed initial jobless claims reached the highest since October 2021 while producer prices rose less than economists expected, suggesting Federal Reserve policy tightening may finally be having an effect.

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.1%, Russell 2000 +0.4%, Dow +0.35%  

In premarket trading, Tesla gained after the electric-car maker raised prices of its Model X and Model S cars in the US, the third change in less than a month. Fox Corp. fell 3.5% as
Wells Fargo Securities cut the recommendation on the media company’s stock to equal-weight from overweight, saying there’s some strategic uncertainty ahead. Cidara Therapeutics (CDTX) rises 17% following the biotechnology company’s first-quarter results. Blue
Bird Corp. (BLBD) soared 33% post-market after the company boosted its revenue and adjusted Ebitda forecast for the full year. Amylyx Pharmaceuticals (AMLX) shares gained over 7% in post-market trading after the drugmaker’s sales of its amyotrophic lateral
sclerosis drug topped analyst estimates. IonQ (IONQ) shares dropped 10% after the software company reported its first-quarter results. SiriusPoint (SPNT) falls 15% after Dan Loeb said he’s no longer exploring an acquisition of the company.

European stocks advanced, erasing their loss for the week, as investors assess the path of interest rates and earnings season reaches its final days. Data showed Britain’s economy grew
by 0.1% in the first three months of 2023, a period that was once expected to be part of a long recession, but an unexpectedly sharp 0.3% drop in March underscored how fragile its recovery remains. The Stoxx Europe 600 Index climbed 0.6%, with consumer-product
and bank stocks leading gains. Autos and real estate declined.  Richemont, the Swiss luxury goods maker that owns the Cartier brand, surged to a record as sales in China rebounded, fueling a broad rally across European luxury stocks. Societe Generale SA erased
declines to advance after the French lender reported that its fixed-income trading unit outperformed most peers in a volatile first quarter.  In other corporate news, THG Plc shares fell as much as 23% after the company ended talks with Apollo Global Management
in the latest failed takeover attempt of the struggling UK online retailer. Stoxx 600 +0.4%, DAX +0.4%, CAC +0.5%, FTSE 100 +0.1%. Banks +1.2%, Energy +1%, Fin Services +0.9%. REITs -0.8%.

Asian equity markets were mixed with the Nikkei rallying 0.9% and China’s CSI 300 fell 1.3%, leading declines in the region as traders fret over the slew of worse-than-expected
economic data, which underscores ongoing problems in the housing market. China’s housing market is regressing after a brief rebound, data showed. Chinese tech stocks bucked the broader market’s trend after e-commerce firm JD.com reported better-than-expected
results. The MSCI Asia Pacific dropped 0.3%, led lower by material and energy shares. Japanese shares outperformed the region as investors welcomed another wave of quarterly results from domestic companies. Vietnam +0.9%, Topix +0.6%, Sensex +0.2%. Philippines
-1.4%, Shanghai Composite -1.1%, Singapore -0.6%, Kospi -0.6%.

FIXED INCOME: 
 

Treasuries are cheaper by up to 4bp across long-end of the curve with 2s10s spread steeper by ~2bp on the day; 10-year yields around 3.42%. Treasury two-year yield
edged up to 3.91%, holds most of its rally seen post inflation data this week.    

METALS: 

Gold traded lower again following two sessions of losses as a stronger dollar weighed somewhat.  Silver has also suffered a pullback and is trading at roughly a six-week
low.  Elsewhere, Copper prices are slightly higher on Friday, however still down 4.4% on the week. Gold -0.5%, silver -1.5%.          

ENERGY:  

Oil futures rose early Friday but remained on track for a fourth straight weekly fall, dogged by worries over the economic outlook. Crude has stumbled even as additional
production cuts of around 1.15 million barrels a day by Saudi Arabia and its OPEC+ allies took effect at the beginning of the month. Meanwhile, news reports have noted doubts that Russia is following through on its pledge to curb output by 500,000 barrels
a day through year-end. Oil found some support after US Energy Secretary Jennifer Granholm on Thursday afternoon said the Energy Department would aim to purchase crude to help rebuild stocks in the Strategic Petroleum Reserve next month. European natural gas
is headed for its longest run of weekly declines in more than three years. WTI +0.5%, Brent +0.3%. US Nat Gas +0.5%.  

CURRENCIES:         

The dollar edged higher and is poised for its biggest weekly gain since March, as traders weigh the likelihood of a Federal Reserve policy pivot following a soft
US inflation report.  EUR/USD inched lower and is set to lose 1% this week, its worst performance in nearly two months. GBP/USD edged higher, brushing off a weaker-than-expected reading of UK GDP. Elsewhere, NZD/USD fell 1.1%, extending losses after the nation’s
two-year inflation expectations eased to within the Reserve Bank’s target band. Meanwhile, South Africa’s rand sank as much as 1.6% against the dollar to the lowest level on record. President Cyril Ramaphosa is starting an investigation into allegations that
the country supplied weapons and ammunition to Russia. AUD/USD fell weighed in part by Kiwi sales. US$ Index +0.1% GBPUSD +0.1%, USDJPY +0.3% ,  EURUSD -0.2%, AUDUSD -0.3%, NZDUSD -1.1%.    

Bitcoin -2.5%, Ethereum -1.7%.   

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:

• AcuityAds (ILLM CN) raised to outperform at RBC; PT C$3.50
• Allakos (ALLK) raised to buy at Jefferies; PT $9
• American States Water (AWR) raised to equal-weight at Wells Fargo
• Bolt Biotherapeutics (BOLT) raised to outperform at SVB; PT $4
• Chemtrade Logistics (CHE-U CN) raised to outperform at Raymond James
• Electronic Arts (EA) raised to buy at DZ Bank; PT $142
• Enovis Corp (ENOV) raised to overweight at Wells Fargo; PT $67
• Euronav (EURN BB) raised to buy at Deutsche Bank; PT $20
• Iris Energy (IREN) raised to overweight at Cantor; PT $7
• Mesa Air (MESA) raised to market perform at Raymond James
• Nutrien (NTR CN) raised to outperform at Raymond James; PT $85
• Peyto Exploration (PEY CN) raised to buy at Canaccord; PT C$14
• Vitru (VTRU) raised to outperform at Credit Suisse; PT $23

DOWNGRADES:

• Arrowhead Pharma (ARWR) cut to market perform at SVB; PT $40
• Aveanna Healthcare (AVAH) cut to market perform at Raymond James
• Brookfield Corp (BN CN) cut to market perform at KBW; PT C$52.58
• CI Financial (CIX CN) cut to equal-weight at Barclays; PT C$19
• CI Financial (CIX CN) cut to market perform at BMO; PT C$17
• Converge Technology (CTS CN) cut to market perform at BMO; PT C$4.50
• Diageo ADRs (DGE LN) cut to hold at Jefferies; PT $190
• Disney (DIS) cut to peerperform at Wolfe
• Fox Corp (FOXA) cut to equal-weight at Wells Fargo; PT $35
• Home Point Capital (HMPT) cut to neutral at Credit Suisse; PT $2.33
• ImmunityBio Inc (IBRX) cut to neutral at Piper Sandler; PT $4
• PayPal (PYPL) cut to neutral at BNPP Exane
• SJW (SJW) cut to underweight at Wells Fargo; PT $76
• Stantec (STN CN) cut to sector perform at ATB Capital; PT C$85
• Twilio (TWLO) cut to neutral at Mizuho Securities; PT $55

INITIATIONS:

• Biomea Fusion (BMEA) rated new overweight at Barclays; PT $50
• LanzaTech Global (LNZA) rated new buy at Roth MKM; PT $8
• MSCI (MSCI) rated new hold at Baptista Research; PT $510
• Palo Alto Networks (PANW) rated new overweight at Capital One; PT $247
• SoFi Technologies (SOFI) rated new buy at Truist Secs; PT $8
• Surgery Partners (SGRY) rated new buy at Mizuho Securities; PT $48

Data sources: Bloomberg, Reuters, CQG

David Wienke

Head Trader, Americas

Cabrera Capital Markets, LLC