Cabrera Capital Daily Game Plan

Tuesday January 5, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:  
8:30ET Fed’s Mester speaks; 9:30ET OPEC+ talks resume; 10:00ET ISM Manufacturing Index; 3:45ET Fed’s Evans, Williams speak

FOMC minutes and Congress meets to count electoral votes tomorrow

TODAY’S HIGHLIGHTS: 

• NYSE Says No Longer Plans to Delist China Telco Giants, with little explanation
  
• Georgia's Senate runoffs today will decide who controls the chamber and Joe Biden's agenda
  
• Iran has resumed production of 20% enriched uranium at its underground Fordo complex
  
• The FDA rebuffed health officials suggestion of cutting dosage levels on Moderna's vaccine to immunize more people, telling them to stick to the guidelines
• JPMorgan is in talks with China Merchants Bank to set up a joint venture
• Ex-Huarong chairman Lai Xiaomin was sentenced to death by China for taking bribes
• Proud Boys Leader Arrested In Washington Ahead Of Wednesday Protest Rally
  

World shares struggled amid new COVID lockdowns in Europe and Senate runoff races in Georgia that will affect incoming US President Joe Biden’s
ability to pursue his preferred economic policies.  Both Georgia elections are tight, and the results may not be immediately known.  The post-holiday rush of tightening restrictions is in full swing in Europe, with the U.K. going into a lockdown, while Italy
and Germany look at lengthening curbs.  Japanese shares fell after the government said it would reach a decision on a state of emergency for Tokyo and surrounding cities on Thursday to curb record coronavirus infections. Global infections climbed above 85
million, after daily cases in the US soared to a record of nearly 300,000. The variant strain of the coronavirus first identified in the UK has been found in New York State.

EQUITIES: 
 

US equity futures fluctuated as traders braced for a key Senate run-off election and weighed the impact of rising coronavirus cases.  S&P 500
contracts pointed to a modestly lower open after the benchmark suffered its worst drop at the start of a year since 2016. Tuesday’s run-off election for two US Senate seats in Georgia is set to determine whether Democrats take effective control of Congress,
seen as a tailwind to reflationary trades built around fiscal stimulus. Investors are also weighing scenarios such as the possibility of higher taxes and more regulation.

December E-mini S&P futures -0.1%, Nasdaq -0.1%, Russell 2000 futures -0.05%, Dow futures -0.05%. SPX has initial short term resistance at 3729
and  would likely see further downside momentum today below 3680 (.618 from yest low).

Small caps are underperforming since Christmas Eve after hitting the key Fibonacci retracement resistance in IWM versus SPY. Look for a pause
in this trade to continue…

In Europe, stocks fluctuated after the UK imposed its third national lockdown to prevent hospitals being overwhelmed. Losses in defensive sectors
offset gains in oil and retail stocks. The Stoxx Europe 600 Index is down 0.45%. Linde Plc contributed the most to the index decline, decreasing 1.4%. Next Plc surged as much as 9.5% after holiday sales beat the company’s October guidance.  German chipmaker
Dialog Semiconductor gained nearly 4% after it gave an upbeat fourth-quarter revenue forecast due to strong demand for 5G phones and tablets. Overall market weakness in the last hour has DLG GY now up only 0.85%. Utilities -1.5%, Autos -1.3%, Banks -0.95%,
CAC and DAX down 0.8%, FTSE 100 -0.2%.

Asian stocks climbed in afternoon trading as China’s equity benchmark rallied to the highest level since 2008. Shares in Hong Kong and China
were bolstered by the NYSE surprise decision to scrap a plan to delist three big Chinese telecommunication companies. Four days after saying it would remove the shares to comply with a U.S. executive order on Chinese firms with military links, the exchange
backtracked, citing consultation with relevant regulatory authorities. China’s CSI 300 Index rose 1.9%, above its 2015 bubble high. The MSCI Asia Pacific Index added 0.6% while Japan's Topix index closed 0.2% lower. Gold miners gained in Australia as the precious
metal rose to an eight-week high. The KOSPI ended at an all-time high, as Korean builders climbed amid expectations the land ministry will ease development restrictions. Indian shares closed at a record high, boosted by gains in mortgage lender HDFC, +2.8%. 
Philippine shares underperformed as inflation accelerated.

FIXED INCOME: 
 

Treasuries are slightly cheaper across the curve led by long end, off session lows reached amid gains for stock futures after NYSE scrapped plans
to delist China telecom names. Another heavy slate of IG credit offerings is expected to follow Monday’s $23.5b haul. Results of Georgia Senate runoffs under way may not be clear for a few days. Yields beyond the 5-year are higher by 1bp-2bp, steepening 2s10s
by 1.5bp with 10-year yield around 0.93%.

METALS: 

Gold continued its strong start to the year as lower US real yields and a weaker dollar combined with surging coronavirus cases to boost demand
for the haven asset. Bullion traded near an eight-week high as US 10-year inflation expectations topped 2% for the first time since 2018 on hopes that monetary stimulus and government aid policies will drive demand. The somber Covid outlook appears to have
revitalized demand for gold from investors seeking havens. Holdings in GLD, the largest bullion-backed exchange-traded fund, posted its biggest daily inflow since September on Monday.

Gold in euros nearing the pivotal 200 day moving average

ENERGY:  

Oil futures are higher as OPEC+ talks kick off again at 9:30 a.m. ET, giving producers another chance to iron out differences on February output
plans. Talks were unexpectedly suspended yesterday due to a disagreement over whether to raise output in February. Saudi Arabia argued against pumping more because of new lockdowns while Russia led calls for higher production, citing recovering demand. Tensions
around OPEC member Iran seizure of a South Korean vessel continued, with Iran saying the Asian country owed it $7 billion. $50 remains key Fibonacci resistance in front month WTI futures.

Natural gas led gains for commodities on cold weather forecasts and an increase in flows to LNG export plants.

CURRENCIES:  

The US dollar index fell after China lifted its official yuan exchange rate to its highest level in 30 months, and its biggest change since 2005.
The Australian dollar, a barometer of risk appetite, led gains as the move by the People’s Bank of China encouraged broad dollar selling.  A win for the Democrats in Georgia may lead to a knee-jerk drop in the dollar… The British Pound stabilized after tumbling
yesterday as a surge in infections of a fast-spreading new coronavirus strain in the UK weighed, with Prime Minister Boris Johnson ordering another nationwide lockdown.

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

• BPFH +24.1% (+$2.02); Boston Private Jumps on SVB Deal; Shareholder Expresses Concern
• CERC +19.7% (+$0.52)
• ATOM +18.6% (+$2.95)
• GRTS +18.2% (+$0.74)
• CHU +13.8% (+$0.76)
• MRSN +13.1% (+$3.48)
• SKLZ +11.9% (+$2.17); Skillz Rallies in Premarket, Was Notable December SPAC
• CHL +11% (+$2.95)
• GOEV +10.6% (+$1.33)
• MYOV +9.7% (+$2.41)
• CHA +9.1% (+$2.36)
• AIH +8.8% (+$0.43)
• BTU +8.2% (+$0.24)
• BTAI +8.1% (+$4.25); BioXcel Therapeutics: BXCL501 Met Primary, Secondary Endpoints
• IPHA +8.1% (+$0.35)
• FUBO +6.9% (+$1.67); FuboTV Jumps After Needham Calls Bottom in Wake of 60% Rout

Decliners

• GSMG -21.7% (-$0.59)
• BNGO -18.8% (-$1.35); BioNano Genomics Shares Slide After Doubling Monday
• VRAY -12.9% (-$0.83); ViewRay to Offer Shrs Said at $4.60-4.85/Shr via Piper Sandler
• SRAC -12.3% (-$2.13)
• BTWN -7.8% (-$1.11); U.S.-Listed Chinese Stocks to Watch: Alibaba, Pinduoduo, JD.com
• QS -7% (-$3.51); QuantumScape Sinks, Bucking Optimism Among EV-Related Stocks
• EYPT -5.1% (-$0.46)
• EBON -4.9% (-$0.35)
• BTBT -4.8% (-$1.41)
• SBE -4.8% (-$1.75)
• LAZR -4.6% (-$1.43)
• EGHT -4.4% (-$1.49); 8×8 Cut to Underweight at Wells Fargo; PT $25
• FSLR -4.4% (-$4.44); First Solar Cut to Sell at Goldman; PT $81
• RIOT -3.5% (-$0.58)
• LGVW -3.3% (-$0.63)
• BFT -3.2% (-$0.46)
• CIIC -3% (-$0.81)
• THBR -2.9% (-$0.38)
• DKNG -2.8% (-$1.26); DraftKings May Resume Slide as Share Lockup Expires Tuesday

David Wienke

Cabrera Capital Markets, LLC