Cabrera Capital Daily Game Plan

Friday February 19, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES  
8:00ET Fed’s Barkin speaks; 9:00ET Biden takes part in G7 virtual meeting; 9:45ET Markit Manufacturing, Services PMI flash; 10:00ET Existing Home Sales, Fed’s Rosengren speaks; 11:00 Fed’s Barkin speaks

Investor sentiment on global growth is at an all-time high, according to Bank of America's February Global Fund Manager Survey

TODAY’S HIGHLIGHTS:   

• Covid cases have dropped 77% in six weeks –
  WSJ
• Yellen defends $1.9 trillion plan, sees no difficulty financing deb
  
• China may ban the export of rare-earths refining technology to countries it deems a threat to state security
• The United States officially rejoined the Paris climate agreement
  

Global equity markets are ending the week on a quiet note. Rising yields dominated discussion this week and raised concerns that the rise in
borrowing costs could derail the economic recovery. Factory output in the euro area’s two largest economies proved resilient in February even as lockdown restrictions continued, but UK retail sales fell off a cliff. In Japan factory activity expanded while
measures to combat the pandemic continued to weigh on services. Biden's first G-7 meeting as president today will be a clear about-face from Trump’s America First. His speeches will focus on partnerships to confront the pandemic and climate change. He will
also ask other leaders to match his push for large investments in economic stimulus, infrastructure, and technology.    

EQUITIES: 
 

US index futures advanced, pointing to a positive open after three consecutive days of losses.  Most major US equity indexes are down this week,
with the tech sector the market’s worst performing sector  and on track to underperform the S&P 500 Index for the first time in five weeks.  Janet Yellen defended the $1.9 trillion stimulus, saying January's blowout retail sales data and stock values don't
change her view. She told CNBC the actual jobless rate is around 10%, not the official 6.7%, as many Americans have stopped looking for work. Uber fell premarket after the UK Supreme Court ruled its drivers are entitled to the minimum wage, holiday pay and
rest breaks. Applied Materials gained 5% after a strong outlook bolstered by chipmakers rushing to produce more supply.

E-mini S&P futures +0.4%, Nasdaq +0.55%, Russell 2000 futures +1.1%, Dow futures +0.3%. ES has the 3929 area initial resistance (s/t .618).

Small caps have been underperforming this week, but looking to outperform today

Value versus Growth is hovering right around key resistance

Europe indices edged higher as data showed factory activity jumped, while upbeat quarterly earnings updates boosted confidence in a broader economic
recovery.  Another contraction in the bloc’s dominant services industry due to widespread coronavirus-induced lockdowns capped gains.  The Stoxx 600 Index is up 0.2%, with travel & leisure, banks, and the basic resources sector leading gains. Among the best-performing
stocks in the region, Hermes International climbed more than 5% after reporting a jump in fourth-quarter sales and Moncler SpA rose 5.8% after beating expectations. German economic activity expanded for an eighth month, with manufacturing growing at the fastest
pace in three years, according to IHS Markit. French factories reported the quickest expansion since early 2018. Travel & Leisure and Banks +1.3%, Basic Resources +1.15% and Tech +0.9% while Healthcare is down 1%. CAC +0.5%, DAX +0.5%, FTSE 100 is flat.

Stocks across Asia were mixed, with the Philippines up over 1% and Australia down more than 1%. The MSCI Asia Pacific Index was broadly unchanged
while Japan's Topix index closed 0.7% lower. Japan automakers fell as production was hampered in Mexico by the shortage of natural gas and in Japan by last weekend’s earthquake. South Korea’s Kospi rose 0.68% after its prime minister said the country may consider
a fifth round of COVID-19 cash handouts. Australia’s ASX 200 led declines among national benchmarks, -1.35%, pulled lower by commodities-related shares. The Shanghai Composite Index rose for the fifth day, climbing 0.6% as all sectors gained. Beijing-Shanghai
High Speed Railway Co. contributed the most to the index gain, increasing 7.9%.  Shares of Chinese companies that make child-care products rallied after national health authorities considered lifting birth restrictions in northeastern provinces.

FIXED INCOME: 
                                       

Treasuries remain choppy for a third straight day, with bearish option positions added in the 5-years. Aussie bonds led USTs lower after Westpac
revised its Australian yield forecasts higher. Next week, we have supply in new 2yr, 5yr, and 7yr auctions.

METALS: 

Gold slid amid its worst start to a year in three decades.  Gold prices fell to a seven-month low, extending its seven-day long streak of declines,
as rallying Treasury yields drove investors away. Spot gold is down 0.25%, but well off the overnight lows. Copper extended its surge to a nine-year high as Goldman Sachs boosted its 12-month price target to $10,500, warning of a historic shortage. “The continued
operation of a significant portion of China’s manufacturing sector through the holiday period has generated a much stronger raw material demand environment than usual,” they said.

Front month gold future may be headed toward the 1695 area (.618).  Copper is nearing potential reversal level

Copper relative to the S&P 500 is trying to gain above the 200 week moving average in the pair for the first time since March 2012. This has
been key resistance in the last few years.

ENERGY:  

WTI fell below $60 a barrel as wells slowly restarted in Texas after being hit by a big freeze. Companies are using restored power from grids
or generators to resume output although full restoration of production remains unclear.  Four of the biggest plants in Texas face delays of several weeks or more to resume operations raising the potential for prolonged fuel shortages. Goldman Sachs said oil
output will see a quick recovery when the weather warms up this weekend. The White House said it would be willing to meet with Iran, to discuss a “diplomatic way forward” in efforts to return to the nuclear deal that the US quit in 2018, adding further pressure
to prices.

WTI versus S&P 500 has been bumping against some key resistance at the February 2016 significant low

CURRENCIES:  

An unexpected increase in US weekly jobless claims soured the economic outlook and sent the dollar lower for a second day.  The euro strengthened
after Germany’s manufacturing PMI climbed more than forecast. The British pound briefly rallied above $1.40 for the first time since 2018, despite data that showed UK retail sales fell 8.2%, much worse than the -3% expected in January. AUD/USD outperforms
G-10 peers, +0.9% hitting its best level since March 2018, on optimism about an economic rebound.

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

• WATT +63.4% (+$2.36); Energous Jumps Premarket After Apple Wireless Charger Report
• CASA +30.9% (+$2.63); Casa Systems Surges After 2021 Revenue Forecast Tops Estimates
• HUIZ +25% (+$2.80)
• VIOT +21.8% (+$2.32)
• JFU +17.5% (+$0.46)
• FRX +16.3% (+$2); Disney Veterans Plan Second SPAC IPO With TMT, Consumer Focus
• DTIL +13.8% (+$1.56); Precision BioSciences Gains as Paper Shows Gene Editing Benefits
• NXTD +12.4% (+$0.30); Nasdaq Breadth Weakens: Decliners Beat Advancers
• TIGR +10.9% (+$3.44)
• FUTU +10.3% (+$17.7)
• UAVS +9.8% (+$0.88); AgEagle Falls in Wake of Bonitas Research Short Report
• NVAX +9.7% (+$25.7); Novavax Jumps on Pact to Supply Covax With 1.1 Billion Doses
• GEVO +9.7% (+$1.03);Gevo Rises as Wainwright Triples Price Target Following Offering
• TRXC +9.5% (+$0.42)
• WIMI +9.2% (+$0.93)
• CAAS +9.1% (+$0.61)
• KLR +9.1% (+$1.52); Kaleyra Buys Global Messaging Provider MGage for $215M Cash, Stk
• KOPN +8.7% (+$0.88)
• TRUE +7.9% (+$0.40)
• FINV +7.8% (+$0.58)
• EVBG +7.8% (+$11.0); Everbridge Raised to Overweight at JPMorgan; PT $200

Decliners

• ASPN -13.6% (-$3.31); Aspen Aerogels Falls as 4Q Revenue, Sales Outlook Lag Estimates
• CBLI -8.9% (-$0.85)
• QDEL -5.8% (-$12.1); Quidel Posts 4Q Results
• PBR -4.8% (-$0.52)
• EHTH -4.8% (-$2.59); eHealth Cut to Hold at Deutsche Bank
• KOSS -4.8% (-$0.68)
• CAPA -3.9% (-$0.88)
• JFIN -3.9% (-$0.23)
• CLPT -3.9% (-$1); ClearPoint Falls After Offering of 1.85m Shares Prices at $23.50
• TSLX -3.7% (-$0.83); Sixth Street Specialty Lending Offering of Shares Prices
• TWLO -3.7% (-$16.5); Twilio Offers $1 Billion Worth of Shares
• OPK -3.4% (-$0.18); Opko Health 4Q EPS Beats Estimates
• DBX -3.3% (-$0.80); Dropbox 4Q Adjusted EPS Beats Estimates

David Wienke

Cabrera Capital Markets, LLC