Cabrera Capital Daily Game Plan

Tuesday January 19, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:  
10:00ET Treasury Secretary nominee Janet Yellen confirmation hearing

Joe Biden takes office as US president on Wednesday

TODAY’S HIGHLIGHTS: 

• 5 confirmation hearings today for incoming Biden administration cabinet positions
• The last president who chose not to attend his successor’s inauguration was Andrew Johnson in 1869
• Biden rejects Trump plan to rescind EU, U.K., and Brazil virus related travel bans
• Trump won't pardon himself, family members or close aides on his last day, but clemency is in the works for rapper Lil Wayne and others
  
• Parler found a new company willing to host it, Russian-owned DDoS-Guard
  

Global markets climbed ahead of Treasury Secretary nominee Janet Yellen’s confirmation hearing in which she is expected to call for expansive
government action to bolster the US economy. US equity futures and Asian stocks notched strong gains, while moves in Europe were more muted. US investors missed little during yesterday's holiday, as news of strong economic data from China was met with a mixed
reaction amid reports of further American measures against Chinese tech companies. Despite the risk-on mood, dealers were wary ahead of U.S. President-elect Joe Biden’s inauguration on Wednesday, given the risk of more mob violence.

EQUITIES: 
 

Futures on US equities indexes advance, as investors prepare for a new administration tomorrow and await a speech by Treasury Secretary nominee
Janet Yellen today.  Yellen is expected to speak before the Senate Finance Committee at 10:00ET, likely to deliver her sales pitch for Joe Biden’s $1.9 trillion Covid-19 relief plan. Yellen will tell them that low borrowing costs mean it’s time to “act big,”
according to her prepared remarks. Biden is hoping is to get enough bipartisan support for the package to achieve the 60-vote supermajority needed for quick passage.

December E-mini S&P futures +0.65%, Nasdaq +0.8%, Russell 2000 futures +1.05%, Dow futures +0.6%. 3797 is initial resistance in SPX (s/t .618).

The NYSE Advance/Decline line continues to give a positive tone for the indices.

The bank sector remains in focus this week. KBWB has more upside relative to S&P 500 before a test of key resistance in the weekly view.

Russell 2000 has been leading the major indices, having gained over 50% since late September.

European stocks inched higher on Tuesday, as possible extension of German lockdowns drew investors into defensive sectors such as healthcare
and telecoms. The Stoxx Europe 600 Index is up 0.1%, with health care (+0.8%), technology (+0.65%) and the construction sectors leading gains, as retail (-1.65%) and banks (-0.9%) slipped. Italian Prime Minister Giuseppe Conte won a crucial confidence vote
Monday evening. Yet a breakup of the Italian government remains a tail risk as Conte needs to pass another vote in the Senate today. German investors grew more confident about the future in January, with the ZEW expectations gauge rising to 61.8 from 55. DAX
+0.3%, CAC +0.05%, FTSE 100 flat

Asian shares posted strong gains, with key indexes in South Korea and Hong Kong climbing more than 2.6% each. Tech stocks including Samsung Electronics
(+2.35%) and TSMC (+3.3%) led the advance.  Samsung shares rebounded from sharp declines on Monday after the billionaire heir of the controlling family was ordered back to prison. The MSCI Asia Pacific Index added 1.2% while Japan's Nikkei 225 gained 1.4%
and the Topix index closed 0.6% higher. Benchmarks in China slid, with the Shanghai Composite down 0.8%, as investors rotated into Hong Kong. Vietnam’s key equity gauge tumbled more than 5%, for its worst decline since July, amid profit taking.

FIXED INCOME: 
  . 

Treasuries are lower as US trading resumes after Monday’s holiday, with 5- to 30-year yields cheaper by as much as 3.5bp. Most of the move occurred
during the Asia session, when risk assets rallied. Today’s Senate Finance Committee hearing is expected to feature topics from foreign-exchange policy to taxes along with additional details on President-elect Joe Biden’s $1.9 trillion Covid-19 relief plan.
US auctions include $24b 20-year bond sale Wednesday and $15b 10-year TIPS Thursday.

METALS: 

Spot gold edged higher as traders awaited Yellen's testimony. Yellen’s Senate confirmation hearing is likely to feature foreign-exchange policy
and will also serve as the first congressional forum where lawmakers will vet Biden’s $1.9 trillion Covid-19 relief plan, parts of which have already drawn opposition.  Gold has fallen about 3% this year as benchmark Treasury yields and the dollar climbed
on forecasts that coronavirus vaccines and stimulus packages will aid the economic recovery.

ENERGY:  

Oil advanced, with Brent trading above $55 a barrel on optimism that government stimulus will buoy global economic growth and oil demand.  Investors
are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020. The International Energy Agency cut its outlook for oil demand in 2021 but pointed to a recovery
in demand in the second half of the year.  OPEC's Mohammad Barkindo offers comments later today. Brent Crude still has some upside room before a test of key Fibonacci resistance around $59.70.

CURRENCIES:  

The euro strengthened after data from Germany’s ZEW Institute showed investors are growing more confident in the economic recovery. The European
Union is also expected to unveil a plan today to strengthen the international role of the euro as it aims to erode dollar dominance. The pound rose slightly against the dollar as the US currency slipped against most major peers ahead of Janet Yellen’s Senate
testimony. The Wall Street Journal on Monday reported Yellen will affirm a more conventional commitment to market-set currency rates. The spot US dollar index is down 0.3%.

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

• TRXC +44% (+$0.91); TransEnterix Receives CE Mark for Machine Vision System in Robotic Surgery
• ACRS +39.5% (+$2.32); Aclaris Therapeutics Announces Positive Preliminary Topline Data from 12-Week Phase 2a Trial of Oral ATI-450
• GEVO +36.2% (+$2.32); Gevo Jumps in Premarket; Noble Boosts PT to $8.25
• COHR +35% (+$53.1); Lumentum to Buy Coherent in $5.7B Cash-Stock Deal: M&A Snapshot
• GRTS +32.2% (+$2.06); Gritstone: In Development for Phase 1 Trial on Covid Vaccine
• CRNT +30.3% (+$1.47); Ceragon Networks Extends Surge as Wood’s ARK Adds to Holdings
• DBVT +28.8% (+$1.63)
• SCPS +21.1% (+$2.79)
• OBSV +18.7% (+$0.76)
• FRSX +18% (+$1.41)
• ACTG +18% (+$0.93)
• TRIT +17% (+$1.37); Triterras Rises in Premarket Trading on $50m Buyback Plan
• ARAY +16.8% (+$0.80)
• AMC +16.7% (+$0.39)
• ENG +15.5% (+$1.07)
• DTIL +15% (+$1.70)
• OCGN +14.9% (+$0.33)
• CLXT +13.8% (+$0.83)
• RESN +13% (+$0.69)
• BQ +11.6% (+$0.76)
• ALDX +11.1% (+$1.48)
• GME +9.9% (+$3.51); GameStop Leaders Pocket Millions on Way Out After Record Week

Decliners

• PRPH -22.2% (-$3.55); ProPhase Drops After Offering of 3m Shares at $12.50 Each
• BHVN -10.5% (-$8.91)
• LITE -9.7% (-$10.3); Lumentum Prelim 2Q Adjusted EPS Beats Estimates
• ODP -5.1% (-$2.35); Office Depot Proposes Staples Buy Only Consumer-Facing Ops: DJ
• NOV -5.1% (-$0.75); NOV Inc Prelim 4Q Revenue Misses Estimates
• PRCH -4.5% (-$0.81)
• RGNX -3.8% (-$1.84)
• EQT -3.4% (-$0.63)
• CLSK -3.1% (-$0.98)
• PTON -2.4% (-$3.81); Peloton Cut to Sell at UBS
• MRNA -2.2% (-$2.90)
• EDIT -2% (-$1.54); Editas Cut to Underweight at Morgan Stanley

David Wienke

Cabrera Capital Markets, LLC