Cabrera Capital Daily Game Plan

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

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

DATA/HEADLINES  
10:00ET Wholesale Inventories, Treasury Secretary Yellen speaks at an IMF event

Biden will sign executive orders on gender equality and economic opportunity for women

TODAY’S HIGHLIGHTS:   

• The attack on Microsoft's business email software is becoming a global cybersecurity crisis
  
• Texas Gov Abbott launches ‘Operation Lone Star’ to address security at the Texas border
• Andrew Cuomo now faces allegations from five women
• Fauci told CBS a rush to lift curbs risks another surge in COVID cases
• Japan supercomputer shows doubling masks offers little help preventing coronavirus
  link

World shares dipped as the US Senate’s passage of a $1.9 trillion stimulus bill put fresh pressure on Treasuries, raising inflation fears. The
MSCI world equity index fell 0.1%, as gains in European banks and cyclicals were offset by losses in Asia. Rising bond yields continue to be the driving factor for global equities, with tech stocks getting hardest hit as investors reassess companies with lofty
valuations. Analysts expect a sharp acceleration in inflation, stoked in part by the latest spike in oil prices.  Tensions are rising in the Middle East after a drone attack on Saudi Arabian oil installations over the weekend by Iran-backed Houthi rebels.
Euro zone investor morale improved to its highest reading in over a year, a survey showed today. British consumer confidence has risen to its highest level since the coronavirus pandemic started, polling firm YouGov said today.

EQUITIES: 
 

US equity futures dropped as rising Treasury yields brought renewed pressure to equities with lofty valuations.  Nasdaq futures led the decline,
falling over 2% before paring losses. President Biden’s $1.9 trillion package will easily pass a vote in the House after it is taken up tomorrow, according to leading Democrats.  According to JPMorgan, every $1 trillion of fiscal stimulus adds around $4-$5
to companies’ earnings per share, implying 6-7% upside for the remainder of the year.  Goldman Sachs Chief Economist Jan Hatzius sees the unemployment rate tumbling to 4.1% by year end.   

E-mini S&P futures -0.45%, Nasdaq -1.15%, Russell 2000 futures FLAT, Dow futures flat.  3868 area is initial key resistance in E-Mini S&P; 3802.50
is initial support in SPX.

Value sector continues to outperform growth and QQQ relative to S&P 500 remains negative with the pair below the 200 day moving average.

Apollo (APO +5.3% pre-market) and Athene (ATH) have entered into a definitive agreement to merge in an all-stock transaction that implies a total
equity value of approximately $11 billion for Athene.   

European stocks advanced as cyclical sectors rallied amid the rise in government bond yields. The Stoxx 600 Index is up 0.9%, with almost all
subgroups gaining, as a rotation into cyclical stocks gathered pace. Banks, Autos, and Constructions sectors lead while sectors considered bond-proxies like consumer goods and utilities are lower. England’s schools reopened to all pupils on Monday, marking
the first step back towards normality as COVID-19 infection rates fall.  British education group Pearson erased early losses to gain 6%.  Aero engines-maker Rolls-Royce rose 3% to top gains on UK’s blue-chip FTSE 100, after the EU and US agreed on Friday to
suspend tariffs imposed on billions of dollars of imports in a 16-year-old dispute over aircraft subsidies.  Insurer Phoenix Group (+3%) and Spain’s Banco de Sabadell jumped 6%. Banks are the top-performing sector, surging 2.9%, the most in three weeks. Auto
stocks +2.1%, insurance +2%, media +1.5%, technology +1.2%.

Asian stocks were headed for a two-month low as benchmarks in China and Hong Kong lead declines across the region. Chinese stocks posted their
biggest decline in seven months. China’s CSI 300 Index fell 3.5%, entering correction levels on concerns about liquidity conditions and lofty valuations. The Shanghai Composite Index fell for the third day, dropping 2.3%.  Chinese banks rallied as CICC said
earnings growth is set to rise at the fastest pace in five years on potentially higher net interest margins. Philippine stocks slid 1.8% as escalating virus infections in the country weighed. The MSCI Asia Pacific Index dropped 1.2% while Japan's Topix index
closed down 0.2%.  Oil-related stocks in the region bucked the trend, gaining after Saudi Arabia said one of its crude facilities came under missile attack on Sunday. Australian shares rose 0.4%, led by gains in heavyweight resource stocks on stronger commodity
prices and strong data from China.  Data on Sunday showed China’s iron ore imports rose 2.8% for the first two months of 2021, as demand for the steelmaking ingredient was supported by a firm consumption outlook.

FIXED INCOME: 
                                       

Treasury futures off lows of the day, although yields remain cheaper and long-end outperforms, flattening the curve. Early weakness was spurred
by strong China data and the Senate passage of the virus relief bill. The size of the stimulus deal is keeping the Treasury market on edge, with short positions hitting a record level last week. Yields cheaper by up to 3.5bp across 7-year sector as belly of
the curve continues to underperform into Treasuries weakness.  A fresh dose of long-end supply may make shorts more attractive, especially after record-low demand for last month's 7-year auction served as a trigger to push 10-year yields above 1.6%. A total
of $62 billion will be offered in 10- and 30-year debt this week.

METALS: 

Gold traded below $1,700 an ounce with the jump in yields continuing to weigh, while ETFs cut holdings for a 15th straight day. Spot gold is
down 0.6% as the dollar climbed to a three month high. Additional government stimulus is likely to boost growth and spur inflation, although Treasury Secretary Janet Yellen played down any concern that the recent surge in yields reflects expectations for an
outsized breakout in consumer prices. “I don’t see that the markets are expecting inflation to rise above” the Federal Reserve’s 2% objective, Yellen said Friday. Citi expects copper will climb to a record within three months, boosting its short-term price
outlook to $10,500.

ENERGY:  

Oil prices climbed for a fourth straight day, rising to their highest levels since the start of the coronavirus crisis. Brent crude rose as much
as 2.9% to $71.38 a barrel after Saudi Arabia said the world’s largest crude terminal was attacked on Sunday by Iran-backed Houthi rebels. The missiles were intercepted, and oil output appeared to be unaffected, as
brent gave up those gains. The attack will likely complicate things for  President Biden to engage in nuclear diplomacy with Iran. Oil had already received a boost from an OPEC+ meeting last week when ministers agreed
to keep a tight leash on supply

CURRENCIES:  

 The dollar strengthened against all its major peers as rising US Treasury yields spooked investors and boosted the greenback’s safe-haven appeal. 
BofA analysts argued the potent mix of US stimulus, faster reopening and greater consumer firepower was a clear positive for the dollar, adding that the Fed is also supportive with US money supply growing two times faster than the Eurozone.  The Australian
dollar weakened 0.4% and the New Zealand dollar was down about 0.8%. The two currencies have been in demand because of their links to global commodities.

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 7:35ET:

Advancers

• EYES +37.7% (+$2.18); Second Sight Medical Extends Rally After Argus 2s FDA Approval
• XSPA +25.3% (+$0.41); Meme Stock XpresSpa Rises in U.S. Premarket on Heavy Volume)
• ATH +18% (+$8.82); Apollo and Athene to Merge in All-Stock Transaction
• ZKIN +15.4% (+$0.80)
• ORTX +15.4% (+$1.04)
• MCFE +14.4% (+$3.05); McAfee to Sell Unit to Symphony-Led Group for $4b: M&A Snapsho
• CUE +14.2% (+$1.85)
• AER +14.2% (+$7.20); GE, AerCap Rise Premarket on Report of Leasing Merger Talks
• REKR +12.4% (+$1.64)
• AYRO +11.9% (+$0.65)
• GME +11.3% (+$15.6); GameStop Shares Rise Premarket, Extending Recent Gains
• EPM +10.6% (+$0.45)
• CARA +10.5% (+$1.90); Vifor, Cara Announce FDA Priority Review of NDA for Korsuva
• ADPT +10.1% (+$4.27); Adaptive Bio Jumps After Covid-19 Test Emergency Nod
• MBI +8.9% (+$0.68)
• MYTE +8.5% (+$2.30); BARRON’S ROUNDUP: Tech Dividend Play; Lowe’s Comeback; Mytheresa
• FIXX +7.8% (+$0.74)
• NEX +7.7% (+$0.43); NexTier Oilfield Shares Up 14%, Most in More Than 14 Weeks
• MGIC +7% (+$1.09); Magic Reports Fourth Quarter Results

Decliners

• SLNO -25.3% (-$0.68)
• LKCO -16.2% (-$0.16); U.S.-Listed Chinese Stocks to Watch: JD.com, Sinopec, NIO Inc.
• CYDY -16% (-$0.65)
• SIFY -15% (-$0.59)
• CBD -14.6% (-$0.70)
• SLGG -10.7% (-$0.63)
• MFGP -9.2% (-$0.64)
• ORMP -7.8% (-$0.59)
• HKIB -7.7% (-$0.50); Amtd International Rises 37%: Chinese U.S. Listings
• OPEN -7.7% (-$1.69); Opendoor’s Slump Continues After First Earnings Since IPO
• VIOT -7.5% (-$0.73)
• KOPN -7% (-$0.58)
• NIU -6.8% (-$2.27); Niu Technologies Announces Fourth Quarter and Full Year 2020 Financial Results
• FINV -6.6% (-$0.33)
• RAAS -6.5% (-$1.29); Cloopen Group Holding ADRs Rated New Neutral at Goldman
• BILI -6.4% (-$7.59); Bilibili Files Its Annual Report on Form 20-F
• ACTC -6.4% (-$1.06)
• IACA -6.3% (-$0.71)
• KMPH -6.1% (-$0.61)

David Wienke

Cabrera Capital Markets, LLC