Cabrera Capital Daily Game Plan

Wednesday January 13, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:  
8:30ET Consumer Price Index, Core CPI; 9:00ET Impeachment debate begins; 9:30ET Fed’s Bullard, Kashkari speak; 1:00ET Fed’s Brainard speaks, $24 billion 30-year bond auction; 2:00ET Fed’s Beige Book, Fed’s Harker speaks; 3:00ET Fed’s Clarida speaks

US headline inflation probably ticked up to 1.3% in December from 1.2%, with the core reading staying at 1.6%

TODAY’S HIGHLIGHTS: 

• President Trump is set to be impeached today for a second time in a House vote that may be supported by a dozen or more Republicans;  Mitch McConnell may
  support it, Axios reported. GOP Representatives John Katko, Adam Kinzinger, and Fred Upton will back impeachment
• World Bank Chief Economist warned overwhelmed balance sheets may trigger a financial crisis
• At least two federal agencies worked to distribute Covid-19 tests from a Chinese genetics company, despite warnings about security risks from US intelligence
  and security officials
• Biden Poised to Pick Wall Street Critic Gary Gensler to Lead SEC
  

There is little movement in global equities again this morning, while the outlook for the next round of US stimulus will become clearer after
the end of Trump's presidency. European stocks and US equity futures fluctuated as investors focused on comments from the Federal Reserve and European Central Bank about the outlook for monetary stimulus. On the virus front, Japan expanded a state of emergency
in the Tokyo area to seven more prefectures on Wednesday amid a steady rise in COVID-19 cases. China recorded its biggest daily jump in COVID-19 cases in more than five months, despite four cities being in lockdown.

EQUITIES: 
  Qualcomm To Acquire NUVIA

Future contracts on major US equity indexes edged lower ahead of key inflation data and a vote by lawmakers on impeaching President Trump during
his final week in office. S&P 500 futures have given back the morning’s gains, with the Russell 2000 futures leading nominal losses.  Stocks have drifted lower this week after notching record highs in early January as investors weighed the prospect of fresh
government spending against political turmoil in Washington and still rising Covid-19 cases. Energy and banking are among the best performers so far in the new year as investors bet on companies that fared poorly in 2020 and are likely to benefit as the economy
recovers. General Motors added 3.6% in pre-market trading. On Tuesday, GM announced plans to push into electric vehicles by creating a wholly owned company called BrightDrop.

December E-mini S&P futures -0.35%, Nasdaq -0.25%, Russell 2000 futures -0.45%, Dow futures -0.25%. SPX held below the s/t .618 retracement of
3807.50 yesterday.  Look for a test of the .382 retrace on the year at 3764. Rotation continues to be a positive for the overall market.

The energy sector has been outperforming the broader index and XLE vs SPY is now above its key 200 day moving average in the pair; first time
since October 2018. XOP has the 71.90 as key Fibonacci resistance.

Facebook has fallen 17% from the August high and is nearing its 200dma, key support area.

Consumer Discretionary relative to Consumer Staples is overbought.

In Europe, the Stoxx Europe 600 Index erased earlier gains as autos, banks, and travel shares dragged on the benchmark. Shares had risen earlier
after the European Central Bank said it will keep an easy monetary stance for as long as needed. French grocer Carrefour (CA FP) rallied 14% after Alimentation Couche-Tard, the Canadian convenience-store giant that owns the Circle K chain, said it is exploring
a transaction. Telecom stocks were the top sector gainers, +1.1%.  Telefonica (TEF SM) jumped 10% after American Tower said it would buy telecommunication towers in Europe and Latin America from the company. Autos (-1%) and banks (-0.8) fell the most as on
fears that prolonged restrictions in Europe will further slow an economic recovery. The German DAX was down 0.15% as the Health Minister said the country will not be able to lift all restrictions at the beginning of February.

In Asia, major indexes ended the day mixed. Asia’s benchmark gauge, the MSCI Asia Pacific Index, hit another record close amid a broad risk-on
rally in global markets. Technology stocks contributed the most to gain as Lenovo Group surged 9.7% in Hong Kong after its board approved a preliminary proposal to list shares on the Shanghai Stock Exchange through the issuance of Chinese depositary receipts.
Taiwan’s index climbed 1.7% to lead the advance in the region. Tech names powered gains in Japan as well, where the Nikkei 225 (+1%) hit a record in dollar terms. South Korea’s Kospi closed 0.7% higher, with stocks of local chipmakers leading the gains. Meanwhile,
equity benchmarks in China and New Zealand declined. The Shanghai Composite fell 0.27% on profit taking in consumer and healthcare shares.

FIXED INCOME: 
  . 

The 10-year US Treasury yield fell from 10-month highs, helped by policymakers pushing back against talk of the Fed tapering its support.  Fed
officials are beginning to split over when they may need to start pulling back on their massive monetary stimulus. In the past week, four of the Fed’s 18 policy makers have publicly raised the prospect they may discuss reducing bond buying. However, Vice Chairman
Clarida said he does not expect any changes before 2022.  Several Federal Reserve policymakers, including Loretta Mester, Esther George, James Bullard and Eric Rosengren pushed back on the idea of the Fed tapering its asset purchases any time soon. 30 year
yield nearly hit the March high yesterday, has 1.75% as key s/t support.

METALS: 

Gold prices eased, reversing earlier gains, as the dollar firmed and US yields held close to recent highs, with investors waiting for more details
on US fiscal stimulus plans.  Spot gold is flat, with futures +0.4%.

ENERGY:  

Oil prices steadied after an early jump on Wednesday as rising global COVID-19 infections capped price gains. Oil futures rose for a seventh
session, with WTI climbing toward $54 a barrel in the longest run of gains since February 2019. The combination of an industry report pointing to another decrease in US crude stockpiles, Saudi Arabia’s output cuts and a weaker dollar are all driving the run
up in energy prices.  US crude supplies shrank by 5.8 million barrels last week, API data showed, in what would be a fifth consecutive decline if confirmed by the EIA today.

CURRENCIES:  

Stabilizing US Treasury yields helped the dollar trade back in positive territory (+0.17%). The bond-market sell-off that has driven US yields
sharply higher this year and stalled the dollar’s decline was triggered by Democrats winning control of Congress at elections in Georgia last week. Sterling is +0.12%, having been boosted yesterday by the Bank of England governor talking down the prospect
of negative interest rates.

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

• QLI +37.6% (+$3.76); China Licorice Maker Qilian Rallies 55% in Second Day of Trading
• WIMI +32.7% (+$2.05)
• MTRX +30.8% (+$3.77); Matrix Service Jumps on Hydrogen Pact With Chart Industries
• IBIO +17.7% (+$0.28)
• GEVO +15% (+$0.91)
• DPW +14.5% (+$0.59); DPW Holdings’s Fintech Lender to Originate Crypto Loans
• GOEV +12.4% (+$2.08); Canoo Jumps Premarket Following Report of Earlier Apple Talks
• PIPP +12.1% (+$1.38)
• IFRX +10.6% (+$0.66)
• NCNA +10.5% (+$0.56)
• KUKE +9.3% (+$0.94)
• APRE +9.2% (+$0.47)
• TEF +8.8% (+$0.39)
• FLNT +8.6% (+$0.46)
• SMSI +8.3% (+$0.50)
• PLUG +7.9% (+$5.22)
• MRNS +7.1% (+$0.86)
• FCEL +6.6% (+$1.26); Fuel Cell Stocks Extend Rally for Seventh Day Amid Hydrogen Pact
• ACLS +6.4% (+$2.01); Axcelis Jumps on Boosted Quarterly Outlook, New Buyback Program
• MRSN +6.3% (+$1.14)

Decliners

• MARA -18.8% (-$4.92); Marathon Patent Files to Offer Shares
• PRTY -12% (-$0.97); Party City Drops Premarket After Prelim Rev. Miss
• URBN -10.6% (-$3.21); Urban Outfitters Sinks as Sales, Margins Disappoint: Street Wrap
• BTBT -8.4% (-$1.66); Crypto Stock Marathon Patent Drops Premarket After Offering
• ACTC -8.3% (-$2.10)
• BIG -7.6% (-$3.71)
• PRVB -7.5% (-$1.46)
• GRUB -6.6% (-$5.48); Just Eat Takeaway Drops as Margin Guidance Disappoints (2)
• FTFT -6% (-$0.39)
• AFMD -5.6% (-$0.37); Affimed to Offer Shrs via Jefferies, SVB Leerink, Credit Suisse
• NCTY -5.5% (-$0.77)
• MESO -5.3% (-$0.54)
• RIOT -5.1% (-$1.23)
• POLA -4.6% (-$0.40)
• MSTR -4.3% (-$22.1)
• SUNW -4.2% (-$0.46)
• QELL -4% (-$0.49)

David Wienke

Cabrera Capital Markets, LLC