Cabrera Capital Daily Game Plan

Thursday January 7, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:  
8:30ET Weekly Jobless Claims, Trade Deficit;  9:00ET Fed’s Harker speaks; 9:30ET Fed’s Barkin speaks; 10:00ET ISM Services Index; 12:00ET Fed’s Bullard speaks; 1:00ET Fed’s Evans speaks; 3:45ET Fed’s Daly speaks

TODAY’S HIGHLIGHTS: 

• Biden is formally recognized by Congress as the next U.S. president
  
• CureVac strikes COVID-19 vaccine alliance with Bayer
  
• Moderna CEO says vaccine likely to protect for 'couple of years'
  
• Japan declares state of emergency for Tokyo area as COVID-19 cases surge (expected)
• Numerous White House resignations include top China adviser
  
  link
• Dan Scavino is posting statements for the president because Trump’s own accounts were suspended by Twitter, Facebook and Snapchat

Global markets are showing resilience after a day of violence rocked the U.S. Capitol, with investors firmly focused on the prospect for more
economic stimulus. President Trump pledged “an orderly transition” minutes after Congress certified President-elect Joe Biden’s Electoral College Victory.  In a sign that traders are still willing to pile on risk, Bitcoin shot above $37,000 to another record
high. In Europe, sentiment was boosted by an unexpected rise in German factory orders pre-lockdown in November.  Citi cut U.S. stocks to neutral and expects better gains from EM and U.K. shares this year.

EQUITIES: 
 Rotation is generally positive for the broader market indices, which may explain why indices were resilient to the chaos in
Washington DC yesterday.  7 of 11 sectors were positive yesterday, led by Financials +4.36% and Materials +4.1%

US index futures are higher, as investors looked beyond a day of violence at the Capitol to focus on the likelihood of more stimulus as Congress
formally certified Joe Biden’s presidency. Value, cyclical stocks are in focus as investors bet on more fiscal spending after Democrats won control of the Senate. Cannabis and solar-power stocks extend gains in premarket trading after the Democrats secure
control of the Senate, which is likely to result in policies that will boost both industries. Goldman Sachs Group economists raised their growth forecasts for the US this year to 6.4%.  The upgrade was driven by the anticipation President Joe Biden will now
be able to deliver a fiscal stimulus package of $750 billion this quarter.

December E-mini S&P futures +0.5%, Nasdaq +0.75%, Russell 2000 futures +0.25%, Dow futures +0.45%. SPX has 3737 as initial short term support
and 3835 as an extension target.

SWBI gained over 18% yesterday, its best trading day since August 2018 after an armed standoff between protestors and police officers took place
inside the US Capitol. Shares have climbed 35% over the past five trading sessions. 

Small caps continue to outperform, with IWM vs SPY climbing above key Fibonacci resistance area.

The Bank sector has been outperforming as rates rise/yield curve steepens. Bank sector ETF (KBWB) has risen 32% since climbing above its 200
day moving average in early November.

Financials relative to Technology (shown by XLF vs XLK), climbed above the 200dma in the pair yesterday for the first time since January 2019.
XLF gained 4.4% yesterday while XLK fell 1.7%.

XLK relative to SPY: nearing its 200 day moving average which it has not tested since gaining above in early 2019.

Bitcoin is up over 800% since the early March lows

European stocks climbed for a second straight session, driven by hopes that a bumper US stimulus package and large-scale coronavirus vaccine
rollouts across the continent will spur a strong economic recovery. Construction (+2.25%) and Materials (+1.25%) continue to lead higher. LafargeHolcim rose 1.6% after the world’s biggest cement maker said it would buy Firestone Building Products from Bridgestone
Americas in a deal worth $3.4 billon.  UK grocer J Sainsbury shares rallied 4.1% after seeing its strongest Christmas on record. Travel stocks weighed with Ryanair Holdings declining 1.3% after the budget airline operator cut its full-year traffic forecast,
citing new coronavirus restrictions. Downgrades for software firm Amadeus IT Group SA (AMS SM -5%) and IT services provider Atos SE (ATO FP -6.2%) hit the tech sector.  Economic sentiment in the euro zone ticked up last month but inflation held in negative
territory (-0.3%). The Stoxx Europe 600 Index is up 0.2%. Volvo AB contributed the most to the index gain, increasing 5.1%. DAX +0.4%, CAC +0.3%, FTSE 100 -0.5%.

Material and industrial stocks led gains in Asia, followed by financials which were boosted by a steepening yield curve. The MSCI Asia Pacific
Index gained as much as 1.4%, another record close. North Asian markets led the charge, with Korea’s benchmark gauge and Japan’s Topix closing 2.1% and 1.7% higher, respectively. The Hang Seng index ended 0.5% lower, after the New York Stock Exchange moved
to delist Chinese telecoms firms again.  Alibaba Group (-3.9%) and Tencent (-4.7%) led a selloff in internet stocks as the Trump administration considers barring investments in China’s two most valuable companies.  China said on Thursday that it would take
necessary measures to safeguard companies’ rights and interests in response.  The Shanghai Composite Index rose for the sixth day, climbing 0.7%, but 2 of 5 sectors were higher.

FIXED INCOME: 
  . 

Treasury futures are little changed as US trading gets under way, off session lows as S&P 500 futures have pared gains. Rising Treasury yields
have been a key market theme this week, with strategists debating how high rates could go. In minutes published Wednesday, Federal Reserve officials unanimously backed holding the pace of asset purchases steady when they met last month. Thursday’s session
includes a host of Fed speakers and size announcements of next week’s 3-, 10-, 30-year auctions.

METALS: 

Spot Gold extended its decline (-0.2%) after posting the biggest loss in almost a month as investors weighed rising Treasury yields and tracked
events in Washington. Still, rising inflation expectations moderated the impact on gold. Spot silver is down 0.6%. Feb gold has key Fibonacci resistance around 1966 area, and gold in euros is holding below its 200 day moving average.

ENERGY:  

Oil prices hit their highest since late February after a fall in US stockpiles added further support following the unilateral decision by Saudi
Arabia to cut output by 1 million barrels per day of output in February and March. Crude inventories were down by 8 million barrels in the week to Jan. 1, versus expectations of a 2.1 million-barrel decline. The drop in crude stocks is a typical year-end occurrence
as energy companies take oil out of storage to avoid tax bills. UBS raised its forecast for Brent oil prices to $60 per barrel by mid-year. Feb only WTI contract is nearing a potentially key Fibonacci retracement resistance.

CURRENCIES:  

Currency markets were largely unperturbed by scenes of chaos in Washington. The US dollar rose against all its Group-of-10 peers on the back
of some safe-haven buying. The pound held below a 2-1/2 year high as speculation swirled that the Bank of England could bring in sub-zero benchmark interest rates earlier to counter the economic hit from a third coronavirus national lockdown. EURUSD is down
0.55%.

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

• NCTY +28.9% (+$4.31)
• CBAT +28.4% (+$1.82)
• OXFD +27.2% (+$4.70); PerkinElmer to Buy U.K. Testing Tool Maker in $591 Million Deal
• XNET +27% (+$0.91)
• PLUG +23.7% (+$8.30); Plug Power to Get $1.5b Strategic Investment From SK Group
• SUNW +18.6% (+$1.08)
• MARA +17.9% (+$3.04)
• FCEL +16.7% (+$2.06); FuelCell Energy, Bloom Energy Gain After Plug Power Investment
• CVAC +16.3% (+$14.2); Bayer Partners With Germany’s CureVacon Coronavirus Vaccine
• SOL +14.6% (+$2.46)
• TH +13.4% (+$0.23)
• IEA +13% (+$2.39)
• TLRY +12% (+$1.29)
• CPST +11.7% (+$1.34)
• AMCI +10.5% (+$1.42)
• QS +10.4% (+$6.56)
• DXC +10% (+$2.65); Atos Makes $10b Takeover Approach for DXC Technology: Reuters
• EBON +10% (+$0.61)
• HIMX +10% (+$0.73); Himax Technologies Prelim 4Q Adj Earnings Per ADS Beats Est.
• ORTX +9.8% (+$0.64); Orchard Therapeutics ADRs Rated New Overweight at Cantor
• HTOO +9.1% (+$1.46)
• BE +9.1% (+$2.76)
• BWEN +8.7% (+$0.72)

Decliners

• UONE -19.1% (-$1.69)
• UONEK -18.6% (-$0.33)
• BBBY -13.2% (-$2.78); Bed Bath & Beyond Third-Quarter EPS, Net Sales Trail Views
• DBVT -11.9% (-$0.43)
• DMTK -8.9% (-$3.09); DermTech Offering Prices 4.2m Shares at $29.50/Share
• PLYA -8.4% (-$0.47); Playa Hotels Offering Prices 35m Shares at $5/Share
• CHL -5.4% (-$1.50)
• HARP -4.5% (-$0.83); Harpoon Therapeutics Prices Offering of Stock
• MPW -4% (-$0.85); Medical Properties to Offer 32m Shrs
• GLPG -2.9% (-$2.87)
• RYAAY -2.7% (-$2.94);
• UNFI -2.7% (-$0.48); United Natural Cut to Underweight at Barclays
• ADC -2.6% (-$1.73); Agree Realty Offering Prices 3m Shares for $195m
• TWTR -2.4% (-$1.26); Twitter Shares Fall in Premarket After Trump’s Account Suspended
• BIG -2.3% (-$1.04); Big Lots Cut to Underweight at Barclays; PT $42
• TIGO -2% (-$0.81)

David Wienke

Cabrera Capital Markets, LLC