Cabrera Capital Daily Game Plan

Monday February 22, 2021                                                        Trading
Desk: (312) 236-8907

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

DATA/HEADLINES  
8:30ET Chicago Fed National Activity Index; 8:45ET ECB President Lagarde speaks; 9:00ET Yellen speaks at NYT DealBook conference,
Fed's Kaplan speaks;  10:00ET Leading Economic Indicators; 10:30ET Dallas Fed Manufacturing Index; 1:00ET House Budget Committee
on Democrat relief package; 3:30ET Fed's Bowman speaks

Federal Reserve Chairman Jerome Powell’s semi-annual testimony before Congress is tomorrow

TODAY’S HIGHLIGHTS:   

• Fauci: 'Possible' Americans will be wearing masks in 2022 – CNN
  
• President Biden will launch changes today to the coronavirus aid program for small businesses to try to reach smaller, minority-owned firms
• Employees of Alphabet, Microsoft, Amazon, Apple, and Facebook were the five largest sources of money for Biden's campaign, newly released campaign finance
  records show
• Democrats begin the final push for President Biden’s $1.9 trillion stimulus bill this week

World shares sank as expectations for faster economic growth diminished, while the continued rise in bond yields gave investors concern that
equity valuations are more stretched. The drop in bonds offset optimism from positive vaccine news, as the Pfizer and BioNTech Covid-19 shot appeared to protect the vast majority of recipients from infection in Israel. The Pfizer vaccine is Japan’s only approved
COVID vaccine, but supplies are not likely to reach Japan until May. China urged the Biden administration to take steps to “build up goodwill,” including removing tariffs and sanctions. German business morale rose much more than expected in February, because
of the strong industrial economy as companies revised up production plans significantly.  The Ifo institute said its business climate index increased to 92.4 from an upwardly revised 90.3 in January.

EQUITIES: 
 

US equity futures dropped alongside shares in Europe and most of Asia as the bond selloff extended to start the week.  The final push for the
stimulus bill kicks off with a House Budget Committee vote today and a full vote is planned by Friday, setting up a Senate decision next week. President Biden will launch changes today to the coronavirus aid program for small businesses to try to reach smaller,
minority-owned firms. The administration said that for two weeks starting on Wednesday, the Small Business Administration will only accept applications for forgivable Paycheck Protection Program (PPP) loans from firms with fewer than 20 employees to ensure
that they are not crowded out by larger firms. Non-citizens, such as green card holders, cannot be excluded from the program. Kohl’s shares climb 8% ahead of the open after reports surfaced over the weekend that a group of activists wants to add nine board
members and push the retailer to improve operations.

E-mini S&P futures -0.8%, Nasdaq -1.35%, Russell 2000 futures -0.8%, Dow futures -0.6%. ES is testing the late January high around 3862 which
will be initial key support to start the day.

American Airlines is up 6% pre-market after an upgraded to Buy from Hold at Deutsche Bank.

In Europe, the STOXX Europe 600 Index fell 0.8%, to its lowest level in ten days, with all sectors but travel and leisure and energy in the red
as tech shares weigh the most, down 1.9%.  ASML Holding contributed the most to the index decline, decreasing 2.4% while Varta AG had the largest drop, falling 11.6%.  Britain’s FTSE 100 dropped 0.65%, while investors awaited Prime Minister Boris Johnson’s
plan to gradually reopen the economy and is set to announce schools will reopen from March 8. He will also offer an outlook on easing further.  Germany’s DAX is down 0.6%, France’s CAC 40 -0.4%, Italy’s FTSE MIB index fell 0.75%, and Spain’s IBEX 35 index
fell 0.9%.

Asian shares reversed early gains to finish the day mostly lower as Chinese and Indian stocks weighed. China’s stock benchmark, the CSI 300 fell
3.1%, dragged down by consumer staples, which had their biggest drop since July. India’s Sensex dropped for a fifth straight day, -2.25%, while benchmarks in Hong Kong, Shanghai, Seoul, and Sydney also declined.  Taiwan and Japan closed roughly 0.5% higher
on fresh buying in materials, travel-related shares, and cheap cyclical stocks. Asia’s health care companies underperformed, while materials stocks bucked the day’s trend. The MSCI Asia Pacific Materials Index climbed 1.3% to its highest level since Aug. 2011
as copper and nickel prices surged. Australian travel-related stocks rose as the nation’s Covid-19 vaccination program kicked off. South Korea’s Kospi fell 0.9%, although insurers continued to climb due to higher yields and improved profit outlooks. The Heng
Seng Index fell over 1% on concerns over policy tightening in China.

FIXED INCOME: 
                                       

The bond selloff continued, with 10-year yields climbing to the highest in about a year and the 5/30 curve touched the highest level in more
than five years. The 2/10 spread reached its widest since early 2017. Bonds have been beaten down by the prospect of a stronger economic recovery and greater borrowing as President Biden’s $1.9 trillion stimulus package progresses. 30-year bonds have returned
-9.4% year to date, the worst start to a year since 2013. Treasury auctions cycle begins Tuesday with $60b 2-year note sale, followed by $61b 5-year Wednesday and $62b 7-year Thursday; it is offset by $116b in redemptions. Dollar issuance slate empty is so
far, but a busy calendar is expected this week.

METALS: 

Gold extended a rebound from a seven-month low on rising inflation concerns, while traders awaited comments from Federal Reserve Chair Jerome
Powell for monetary policy guidance.  Spot gold is up 0.8%, shrugging off a jump in yields, aided by a slightly weaker dollar.  Gold has been weak this year, partly due to rising bond yields and partly as investors question if crypto currencies might be a
better hedge against inflation. Investors focus will be on the testimony of Federal Reserve Chairman Jerome Powell on the Semiannual Monetary Report to Congress beginning tomorrow. One of the stars has been copper, a key component of renewable technology,
which shot up 7.7% last week to a nine-year peak. Copper is up another 1% today.

ENERGY:  

Oil prices rose as the slow return of US crude output cut by frigid conditions served as a reminder of the tight supply situation. Oilfield crews
will probably take several days to de-ice valves, restart systems, and begin oil and gas output. Saudi Arabia and Russia are at loggerheads as they head into an OPEC+ meeting that is renewing the debate on global oil supply. Saudi Arabia is said to prefer
keeping output steady while Russia wants to proceed with an increase. Biden approved a major disaster declaration for Texas, which will expedite federal funding.  Goldman Sachs raised its Brent price forecast by $10, with expectations for it to reach $70 by
the second quarter and predicted consumption will reach pre-virus levels in July.

CURRENCIES:  

The US dollar pared losses in early European trading after hitting multi-year lows against sterling and the Australian and New Zealand dollars.
The Pound reached a three-year top at $1.4050, aided by one of the fastest vaccine rollouts in the world. British Prime Minister Boris Johnson is due to outline a path from COVID-19 lockdowns today. The euro fluctuated ahead of a speech by European Central
Bank President Christine Lagarde. Commodity-linked currencies, like the Canadian, Australian and New Zealand dollars are slightly higher, and all are higher for the year so far.  In the cryptocurrency market, bitcoin fell 7% after hitting a record high of
$58,354.14 during the weekend.

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

• CLSN +28.9% (+$0.55); Celsion Receives FDA Fast Track Designation for GEN-1 in Advanced Ovarian Cancer
• CHNR +28.1% (+$0.76)
• LIZI +27.6% (+$3.32); Lizhi Launches Its In-Car Audio Product In Mercedes Benz S-Class Cars
• TRCH +20.2% (+$0.63)
• RNWK +19.2% (+$0.68)
• CTB +16.5% (+$7.23); Goodyear to Buy Cooper Tire in $2.8B Equity Value Deal
• GLOG +16% (+$0.79); GasLog 4Q Revenue Beats Estimates
• CCIV +13.3% (+$7.06); SPACs Churchill, Northern Star, Starboard Jump on Merger Reports
• FRX +13% (+$1.83)
• PTNR +11.7% (+$0.54)
• VUZI +11.6% (+$2.06)
• GME +11.6% (+$4.71); GameStop Jumps in Premarket Trading; AMC Also Climbs
• LPTH +11.4% (+$0.48)
• ACH +10.8% (+$1.20)
• PBCT +10% (+$1.57); M&T Bank to Buy People’s United
• KSS +9.1% (+$4.81); Kohl’s Gains as Activists Are Said to Vie for Board Control (1)
• VCNX +8.6% (+$0.42)
• EH +8.6% (+$5.14); EHang Holdings ADRs Rated New Buy at Mirae Asset Daewoo; PT $100

Decliners

• OTIC -45.3% (-$2.44); Otonomy Announces Top-Line Results for the Phase 3 Clinical Trial of OTIVIDEX in Patients with Ménière’s Disease
• EBIX -29.5% (-$15.0); Ebix Falls; Auditor Resigns After Flagging ‘Material Weakness’
• WATT -18.1% (-$1.31)
• PBR -16.8% (-$1.69); Brazil Futures Slump as Petrobras’s Turmoil Sours Investor Mood
• PBR/A -16.3% (-$1.65)
• MGI -15.5% (-$1.68); MoneyGram 4Q Adjusted EPS Beats Estimates
• RWLK -13.3% (-$0.55); ReWalk Robotics Shares Drop Following $40m Private Placement
• FAII -13.2% (-$1.60); ATI Physical to Go Public Via Fortress Spac Merger: M&A Snapshot
• MARA -10.6% (-$4.60); Marathon Patent CEO Okamoto Sells $34.1 Million of Shares
• RIOT -10.3% (-$7.33)
• SINO -8.6% (-$0.90)
• PBTS -8.3% (-$0.47)
• CAN -8.1% (-$2.02)
• EBR -7.4% (-$0.40)
• XNET -7.3% (-$0.75)
• QFIN -7.1% (-$2.19); China’s National Banks to Be Aided by Online Lending Rules: Citi
• HUIZ -6.8% (-$0.88)
• DNMR -6.7% (-$3.33)
• DPW -6.7% (-$0.45); U.S. Crypto Stocks Drop; Bitcoin Eases Following New Record
• DOYU -6.5% (-$1.07)

David Wienke

Cabrera Capital Markets, LLC