Cabrera Capital Daily Game Plan

Monday February 8, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES  
11:00ET  White House Covid Team Briefing; 12:00ET Fed's Mester speaks

Donald Trump's impeachment trial starts in the Senate tomorrow and proceedings may take just a few days as Democrats have indicated they want
to move on to other urgent work.

TODAY’S HIGHLIGHTS:  

• Astra Vaccine Shows to be Less Effective Against South Africa Variant
• Dogecoin briefly touched a record after more celebrity endorsements
  
• Elliott is seeking to raise more than $1 billion for a SPAC; WSJ
  
• Chicago and San Francisco reached preliminary agreements for schools to resume in-person learning
  
• Chinese Market Regulator Held Meeting With Tesla Over Quality Issue – RTRS
• Tesla may invest portion of cash in some alternative assets including digital assets and gold

World shares hit a record high, buoyed by positive news that coronavirus infections are slowing globally and after US Treasury Secretary Janet
Yellen pushed for rapid stimulus. A Citigroup gauge of global risk aversion dropped to its lowest since the pandemic first roiled markets last year. Virus infection rates slowed globally, though President Biden warned the US probably will not reach herd immunity
before the fall. News that South Africa halted the rollout of AstraZeneca’s vaccine after a study showed it gave only limited protection against the country’s more contagious variant of the virus was not enough to dampen sentiment. AstraZeneca says it's adapting
its COVID vaccine in response.

EQUITIES: 
 

US equity index futures advance, boosted by reflation bets after Janet Yellen pushed for rapid stimulus. Treasury Secretary Yellen said on Sunday
that the US could return to full employment in 2022 if it enacts a robust enough relief package. She told CNN that without adequate help, it may be 2025 before the jobs market recovers. President Biden gave his strongest indication yet that he’ll push for
swift action on coronavirus relief without Republican support, saying “I’m going to act and I’m going to act fast.” Congressional committees will start crafting legislation on specific components of Biden's $1.9 trillion plan this week.

E-mini S&P futures +0.35%, Nasdaq +0.35%, Russell 2000 futures +0.6%, Dow futures +0.4%. S&P 500 futures hit new all-time highs at the 3900 area.
The NYSE Advance/Decline line continues to be supportive of the rally.  

Small caps continue to outperform.  Russell 2000 versus SPX really gained upside momentum once above the 200 day moving average in the pair. 

Bitcoin surged to an all-time high after Tesla said it’s invested $1.5 billion and will begin accepting the cryptocurrency as a form of payment.
Tesla made the announcement as part of an update to its investment policy,  and may acquire and hold digital assets from time to time or long-term.

European shares rose, with Italian equities outperforming regional peers as Mario Draghi is on track to form a new national government.  Adding
to sentiment, European Central Bank President Christine Lagarde predicted the euro-area recovery will pick up in the summer amid ‘attractive’ financing conditions. Investor confidence in the euro area fell in February, defying estimates for a gain. The Sentix
index dropped to -0.2 while consensus was for and increase to 2.  The Stoxx 600 Index was up 0.5%, as higher oil prices and inflation expectations lifted basic resource and banking shares. The technology sector gained 0.9% boosted by deal-making.  Dialog Semiconductor
was a standout, with the chipmaker surging 17% after agreeing to a $6 billion takeover by Japan’s Renesas Electronics Corp.  Basic Resources +2%, Banks +1.8%, FTSE MIB +1.55%, FTSE 100 +1%, CAC +0.7%, DAX +0.25%

Asian stocks climbed, extending gains after their best week since November. The MSCI Asia Pacific Index rose 0.7%, as Japanese shares led the
rally.  The Topix jumped 1.8% to its highest close since 1991, with SoftBank Group contributing the most, up 4.5%, as the group reported a record profit in its Vision Fund. The Nikkei 225 index climbed more than 2% amid reports the government may lift its
state of emergency early for some areas.  Meanwhile, South Korea’s Kospi fell 0.9%, dragged down by Hyundai Motor after saying they were not holding any discussions with Apple on developing self-driving cars.  Vietnam’s stock gauge plunged 3.9% and was the
biggest loser in Asia amid concerns over new local coronavirus cases. Hong Kong stocks pared gains to end the day up just 0.1%, ahead of the Lunar New Year holiday. After the close, Hong Kong’s regulator proposed tightening rules on stock and bond sales. The
Shanghai Composite Index rose 1% as China rolled out rules intended to root out monopolistic practices in the internet industry. The regulations ban sharing sensitive consumer data, forming alliances to squeeze out smaller rivals and using below-cost services
to drive out competitors.

FIXED INCOME: 
                                        

The bond market is focused on how far inflation might rise if the current mix of stimulus, rising oil and food prices and expectations for a
reopening economies continue to hold. The 30-year Treasury yield topped 2%, the highest in a year, while the pace of US inflation implied by the bond market accelerated to the fastest since 2014. The 10-year breakeven rate rose to 2.21%, climbing from under
0.5% in March, while the 5s/30s yield curve hit the steepest since 2015. 10 year yield climbed to 1.2%, the highest since the peak of coronavirus uncertainty last March. Treasury auctions commence Tuesday with $58b in 3-year notes followed by $41b in 10-year
and $27b in 30-year Wednesday and Thursday.

METALS: 

Gold attracted some dip-buying and turned positive for a second straight day. Gold has steadied as investors weigh rising inflation expectations
against higher bond yields. The pace of US inflation that is implied by the bond market has surged to the highest level since 2014, possibly rekindling demand for gold as an inflation hedge. Still, Treasury yields have risen faster this year, diminishing the
appeal of the metal. Spot gold is up 0.3% after rising 1.1% on Friday.

ENERGY:  

Oil prices rose to their highest in just over a year, with Brent nudging past $60 a barrel, boosted by supply cuts among key producers and hopes
for further US economic stimulus measures that could boost demand. Vitol joined rival trader Gunvor in expressing caution about the rally, saying the market is getting ahead of itself with post-vaccine euphoria and belief in OPEC's ability to manage supply.
It also noted that while Chinese demand has rebounded rapidly, a full recovery depends on the rest of the world starting to catch up. In a sign that supplies are tightening, the six-month Brent spread hit its highest in more than a year.  Higher crude prices,
meanwhile, are encouraging US producers to increase output. Natural gas got a boost from another snowstorm on the US East Coast.

CURRENCIES:  

The dollar steadied against major currencies as traders waited for more data on the US economy, after a disappointing jobs report last week ended
a rally in the greenback. The euro slipped 0.2% after data showed German industrial output stagnated in December.  The pound fell 0.4% against the dollar as attention turns to a speech by Bank of England Governor Andrew Bailey. Citi and Deutsche Bank were
penalized by Taiwan for speculating on the surging local dollar last year, with Deutsche Bank banned from foreign exchange derivatives for two years.

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

• NMRD +91.8% (+$6.37); Meme Stocks Soar Again as Retail Traders Dabble in the Obscure
• OCGN +76% (+$3.99); Ocugen Surges 78% After Pricing Stock Offering at a Premium
• REI +40.5% (+$0.66); Occidental Supply Chain in Focus as News Volume Rises
• LAIX +34% (+$1.39); Laix Rises 60%, Most Since Dec. 20, 2019: Chinese U.S. Listings
• SNPR +32.5% (+$4.19)
• TXMD +30% (+$0.57)
• ARYA +29.3% (+$3.29)
• VISL +26% (+$0.95)
• TNXP +24.4% (+$0.31); Tonix Pharma Soars on Plans to Develop Covid-19 Skin Test
• VERU +23.6% (+$2.58); Veru’s Covid Drug Studies May Get Boost After Mid-Stage Trial
• LIZI +20.2% (+$2.30)
• CLNE +19.6% (+$2.54)
• SENS +18.8% (+$0.57)
• NCTY +15.3% (+$3.57)
• PLX +14.7% (+$0.72)
• LX +14.6% (+$1.46)
• JG +13.1% (+$0.65)
• INFI +12.7% (+$0.50)
• KTOS +11.9% (+$3.50)
• GHVI +11.7% (+$1.44); Matterport to Go Public in Merger With Gores Spac: M&A Snapshot

Decliners

• ERYP -13.6% (-$1.58)
• DTEA -12.5% (-$0.66)
• XYF -11.3% (-$0.40)
• CAAS -6.1% (-$0.42)
• VOR -5.9% (-$2.20)
• CCIV -5.1% (-$1.78)
• TCS -4.8% (-$0.76); Container Store Holder Leonard Green & Partners Offers 5m Shares
• MEIP -4.8% (-$0.19)
• RLX -4% (-$0.98)
• TGH -3.9% (-$0.77)
• CPSH -2.8% (-$0.64)
• GOEV -2.7% (-$0.48)
• POLA -2.7% (-$0.55)
• VIAC -2.7% (-$1.45); ViacomCBS Cut to Sell at UBS; PT $29
• WYNN -2.3% (-$2.68); Wynn Resorts Offers 5.5m Shares Said to Trade Feb. 9

David Wienke

Cabrera Capital Markets, LLC