Cabrera Capital Daily Game Plan

Wednesday January 20, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES:  
10:00ET Home Builders Index; 10:30ET CAD rate decision; 11:15ET  Biden, Harris participate in swearing-in ceremony; 12:00ET Inauguration of Joe Biden as president; 1:00ET 20 Year Bond Auction; 5:15ET  Biden signs executive orders

Policy decisions are due today from central banks in Brazil and Canada. The Bank of Japan and the ECB deliver decisions tomorrow.   

TODAY’S HIGHLIGHTS: 

• France To Keep Cafes And Restaurants Closed Until April 6
  
• Biden today will order a government-wide review of over 100 Trump-era policies
• Biden set to rejoin Paris climate accord, impose curbs on US oil industry
• Alibaba's Jack Ma made his first public appearance in three months, by video
• Trump pardons 73 people including Steve Bannon, Lil Wayne, Broidy, but not himself or Julian Assange
• The Pfizer-BioNTech vaccine will probably protect against the new UK variant, according to a new study

There is an upbeat mood in global markets today after US Treasury Secretary nominee Janet Yellen called for big fiscal spending yesterday to
support the pandemic-stricken economy. All eyes will be on Biden’s inauguration as US President at noon in Washington, with traders more focused on his policies. Authorities have warned of possible armed protests across the country, which might cool the markets’
upbeat mood.  On the virus front, Germany suffered record daily deaths and authorities in Beijing sealed off part of the city to guard against a flareup of cases in northern China.

EQUITIES: 
 

US equities futures advanced on hopes of further economic stimulus, as President-elect Joe Biden prepares for inauguration. Nasdaq futures outperform
following strong earnings from Netflix. Investors are counting on more spending to help propel economic growth under incoming President Joe Biden, who is to be sworn in at noon today and is planning a flurry of executive orders on his first day.  Biden plans
to begin immediately unwinding President Trump’s policies on immigration, climate and other issues today with at least 15 executive actions. He'll revoke a permit for the Keystone XL pipeline, impose a mask mandate on federal property and end a travel ban
against some mainly Muslim nations.

December E-mini S&P futures +0.35%, Nasdaq +0.85%, Russell 2000 futures -0.15%, Dow futures +0.1%. SPX has 3834 area as extension target (resistance).

Technology sector has been underperforming, but remains positive overall relative to the broader index with XLK vs SPY above the 200dma in the
pair. 

NFLX climbed 14% in premarket trading, testing its all-time high, after analysts increased their price targets following a surge in subscribers
and the company saying it no longer needs to borrow money to build its entertainment empire. The world’s leading paid streaming service attracted 8.51 million new subscribers in the final three months of the year, helped by the popularity of hit shows such
as “Bridgerton” and “The Queen’s Gambit.” That outpaced Netflix’s own forecast and the 6.06 million projected by Wall Street.

Facebook gained 3.87% yesterday, and up another 1% pre-market after testing its 200 day moving average late last week.

Growth continues to hold an advantage versus Value while above the 200dma in this pair.

European stocks gained as investors weighed earnings reports and assessed prospects for more US stimulus. The Stoxx Europe 600 Index gains 0.6%
with ASML Holding contributed the most, increasing 3.2% after it posted earnings that beat forecasts and announced a share buyback plan. Carmakers and miners outperformed, while utilities lagged, signaling an ongoing rotation into more economically sensitive
cyclical shares and out of defensives. Luxury-goods makers also climbed as Richemont reported a surge in Chinese revenue and Britain’s Burberry Group said it was encouraged by a strong performance in full-price sales. Germany’s Hugo Boss gained over 5% after
Frasers said it boosted its stake in the company.  In Italy, the benchmark FTSE MIB Index rose 0.7% after Prime Minister Conte survived a crucial Senate vote but fell short of an outright majority. Basic Resources +2.3%, Autos +2.15%, Tech +2%, Retail +0.9%
/ Utilities -0.6%.  DAX +0.5%. CAC +0.25%, FTSE 100 -0.05%.

Asian stocks continued to set records, with benchmarks surging in Hong Kong and Indonesia.  Chinese firms trading in Hong Kong saw the bulk of
gains, with the Hang Seng Index climbing 1.08%. Chipmaker TSMC and online gaming giant Tencent provided the biggest boosts. Alibaba Group jumped after billionaire Jack Ma resurfaced from months out of public view. Indonesia stocks rose as the government readied
removing restrictions on foreign investment in the energy, communications, and tourism sectors. Indian shares ended 0.8% higher, led by gains in information technology and Reliance Industries. The Shanghai Composite Index rose 0.5% with electric vehicle and
healthcare shares leading the gains. The new-energy vehicle sector sub-index rose 4.6%, while the healthcare sub-index was up 3.57%. Japanese stocks fell after signs that their recent rally had become too stretched. 

FIXED INCOME: 
  . 

Treasury futures are lower with yields cheaper by 1bp-2bp from belly to long end. 10-year yield is higher by 1.2bp at 1.10% with front-end anchored.
A tight overnight range as most of the activity was on the sell-side in 20yr and 30yr sectors. Today's focus will be on the $24b reopening of 20-year bond at 1pm ET.  US junk markets are on pace for one of the busiest Januaries on record, with about $9 billion
pricing yesterday to take issuance to $31.5 billion.

METALS: 

Gold rose as much as 1% before paring gains as the dollar recouped early losses. Gold is generally considered a hedge against the inflation that
can result from widespread stimulus. However, higher bond yields have challenged that status recently as they increase the opportunity cost of holding non-yielding bullion. Yellen at her confirmation hearing on Tuesday said pandemic relief would take priority
over tax increases, adding that the benefits of a relief package outweigh the expenses of a higher debt burden. For now, Feb Gold is holding a short term negative tone with settles below the
200dma.

ENERGY:  

WTI rose over 1%, supported by expectations the new US administration will deliver massive stimulus spending that would lift demand, as well
as forecasts of a drop in US crude inventories. Brent crude is +0.8% after a 2% gain yesterday. Gains were limited by concern about near-term demand as COVID-19 infections rise. Beijing announced stricter virus control measures while Germany extended a lockdown
for most shops and schools yesterday. US natural gas futures fell, reversing gains earlier in the session, amid an outlook for warmer temperatures in parts of the South.

CURRENCIES:  

The pound advanced for a second day, benefiting from broad weakness in the US dollar. UK inflation remained subdued in December, picking up 0.6%
from a year earlier, slightly higher than economists’ forecast of 0.5%. The US dollar is flat following yesterday’s decline, after Treasury Secretary nominee Janet Yellen argued that low interest rates offered breadth to boost stimulus for the US economy.
Positioning data shows investors overwhelmingly short dollars as they figure budget and current account deficits will weigh.  Improved sentiment buoyed riskier currencies such as the Aussie dollar (+0.4%). Cryptocurrency Bitcoin fell 5%.

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

• APM +67.3% (+$2.14); Aptorum Group Jumps on Canada Approval of Infection Drug Trial
• INUV +50.3% (+$0.73)
• LCTX +34.7% (+$0.86)
• EMAN +22.2% (+$0.57)
• AVGR +21.4% (+$0.42)
• UAVS +21.4% (+$2.63)
• PCTI +16.6% (+$1.47)
• YGMZ +14.5% (+$1.74)
• NFLX +13.5% (+$67.9); Netflix Surges Premarket as Results Prompt Round of Target Hikes
• ISR +13.3% (+$0.32);
• SENS +12.6% (+$0.36); Senseonics Rallies on EmblemHealth Coverage for Glucose Device
• FUTU +12.4% (+$10.0)
• CKPT +11.4% (+$0.38); Checkpoint Gains After Cantor Says Sales Potential Undervalued
• BEST +10.7% (+$0.22); Best ADRs Surge After Report Co. Is Considering a Sale
• ICLK +10.6% (+$1.47)
• AIRG +10.3% (+$2.67)
• OEG +9.9% (+$0.41)
• AMC +9.5% (+$0.29)

Decliners

• GEVO -25.6% (-$2.82); Gevo to Sell $350M of Stock After Tuesday Surge; Shares Sink
• BNGO -18.6% (-$1.70); BioNano Genomics to Offer Shrs
• CTMX -7.9% (-$0.67); CytomX to Offer Shares via JP Morgan, Cowen, Piper Sandler
• MIK -5.9% (-$0.97); Pick Value, Comp Recovery in Complex Retail Backdrop, MS Says
• HGEN -5.6% (-$1.16); Humanigen Slides After Change in Covid-19 Trial Main Goal
• CRNT -5.3% (-$0.34); Ceragon Networks Cut to Underperform at Needham
• ACRS -5.2% (-$0.97); Aclaris to Offer Shrs
• LXRX -5% (-$0.40)
• BTBT -4.9% (-$0.81); Crypto-Linked Stocks Fall in Premarket Trading on Bitcoin Drop
• MARA -4.7% (-$1.06)
• POLA -4.5% (-$0.62)
• MSTR -4.4% (-$25.9)
• RIOT -4.2% (-$1.05)
• EH -4.1% (-$2.51); EHang Holdings Rises 53%: Chinese U.S. Listings
• NGA -4% (-$1.25)
• GME -4% (-$1.56)

UPGRADES:

• Domtar (UFS) raised to buy at BofA
• DraftKings (DKNG) raised to overweight at Morgan Stanley
• Equity Residential (EQR) raised to outperform at Evercore ISI
• Essex Property (ESS) raised to outperform at Evercore ISI
• Lumentum (LITE) raised to buy at Goldman; PT $117
• Netflix (NFLX) raised to buy at UBS; PT $650
• Netflix (NFLX) raised to overweight at Wells Fargo; PT $700
• Northland Power (NPI CN) raised to outperform at Credit Suisse
• Polaris (PII) raised to outperform at BMO; PT $136
• Sally Beauty (SBH) raised to equal-weight at Morgan Stanley
• Williams-Sonoma (WSM) raised to equal-weight at Morgan Stanley

DOWNGRADES:

• APLI CN (APLI CN) cut to speculative buy at Industrial Alliance; PT C$3
• Albertsons Cos (ACI) cut to underweight at Morgan Stanley; PT $13
• American Homes (AMH) cut to inline at Evercore ISI
• BP Midstream Partners (BPMP) cut to equal-weight at Barclays; PT $13
• Beyond Meat (BYND) cut to neutral at BTIG
• Bloom Energy (BE) cut to neutral at Credit Suisse; PT $32
• Boralex (BLX CN) cut to sector perform at National Bank; PT C$54
• Cemex ADRs (CEMEXCPO MM) cut to neutral at Citi; PT $6.90
• Elf Beauty (ELF) cut to neutral at Piper Sandler; PT $24
• Embraer ADRs (BBDC4 BZ) cut to underperform at Bradesco BBI; PT $4
• Global Blood (GBT) cut to neutral at Piper Sandler; PT $50
• Gritstone Oncology (GRTS) cut to underperform at Baird; PT $8
• Intercorp Finl (IFS) cut to sector perform at Scotiabank; PT $36
• Invitation Homes (INVH) cut to inline at Evercore ISI
• KNOT Offshore (KNOP) cut to underweight at Barclays; PT $17
• Kroger (KR) cut to underweight at Morgan Stanley; PT $28
• Michaels (MIK) cut to underweight at Morgan Stanley; PT $13
• Ollie's Bargain (OLLI) cut to underweight at Morgan Stanley
• Shell Midstream Partners (SHLX) cut to equal-weight at Barclays; PT $11
• Shockwave Medical (SWAV) cut to neutral at Piper Sandler; PT $132
• UDR (UDR) cut to inline at Evercore ISI
• Xenia Hotels (XHR) cut to underweight at Morgan Stanley; PT $13

David Wienke

Cabrera Capital Markets, LLC