Daily Game Plan

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

DATA/HEADLINES:   9:00ET
FHFA House Price Index; 10:00ET Conf. Board Consumer Confidence, JOLTS Job Openings; 10:30ET Dallas Fed Services Activity

TODAY’S HIGHLIGHTS and News:  

• Elon Musk’s Neuralink implants brain chip in first human
  
• Iran Urges Diplomacy as US Weighs Response to Deadly Attack
  
• Donald Trump nominated for Nobel Peace Prize
  

Global stocks traded at two-year highs ahead of the Federal Reserve meeting tomorrow. The euro zone’s economy barely avoided a recession in the final quarter of last
year, data showed, helped by expansions in Spain and Italy. As expected, Germany was the weak spot with GDP falling 0.3%.  France’s economy stagnated in Q4, with 0.0% growth. Italy’s and Spain’s economies grew 0.2% and 0.6%, respectively. Both Spanish Q4 GDP
and January ‘flash’ HICP inflation came in well above consensus, expanding 1.4% q/q, due to government spending.  Japan’s unemployment rate in December fell to 2.4%, slightly below expectations. Iran urged the US to use diplomacy to ease tensions in the Middle
East, as Tehran braces for a military response to the deadly attack on an American base over the weekend. Israel’s military said troops are fighting in the tunnels beneath Gaza for the first time and added that eliminating the threat of Hamas may take until
the end of 2024 or longer.                         

EQUITIES: 
 

US equity futures were muted overnight as investors looked forward to a rush of major earnings for insights on whether the record-breaking rally in equities can continue. The latest record
close on Monday pushed the S&P 500’s gains this month to 3.3%, while the Nasdaq 100 has surged 4.6%. Morgan Stanley analysts turned bullish on major US banks on expectations that pending capital rules will be less onerous than the current proposal. Goldman,
Citi and BofA were raised to overweight. The busiest week so far of this reporting season moves up a notch with Microsoft and Google reporting after the bell. Apple, Amazon.com and Meta Platforms report Thursday.   

Futures ahead of the bell: E-Mini S&P -0.25%, Nasdaq -0.25%, Russell 2000 -0.6%, DJI -0.25%

In premarket trading, Super Micro Computer (SMCI) jumps 13% after the server maker beat estimates on second-quarter net sales and raised its revenue forecast for the year. General Motors
(GM) jumped 8% after beating profit expectations, while United Parcel Service fell over 6% after its revenue guidance missed projections. Pfizer gains 0.8% after it reported fourth-quarter earnings that beat analysts’ estimates as the US government returned
fewer doses of its Covid-19 treatment than predicted. Calix (CALX) plunges 19% after the communication software company’s first-quarter forecast disappointed. Danaher (DHR) falls 2.5% after the company forecasted core sales for 2024 that disappointed. Johnson
Controls (JCI) slips 2% after cutting its adjusted earnings per share forecast for the full year. Spotify (SPOT) rises 1.8% after UBS upgraded its rating to buy. Tesla (TSLA) climbs 2% as Cathie Wood’s Ark Investment Management bought more shares. Whirlpool
(WHR) drops 4.7% after issuing weaker than expected projections. Woodward (WWD) rises 5.8% after boosting its full-year profit and sales outlook.

European gauges ticked higher, reaching a two-year high, as a busy earnings week gets underway. The Stoxx 600 Index makes modest gains with autos, banks and media outperforming while
food & beverage sector slides. France’s CAC 40 Index hit another record high after the country narrowly escaped a recession at the end of 2023. The wider euro zone also dodged a downturn.  Advertising giant WPP Plc jumped on the open, before paring gains,
after announcing AI investment plans. Food and beverage shares underperformed, weighed down by spirits maker Diageo after reporting results that missed estimates.  Delivery Hero SE and Deliveroo Plc both fell after the former exited its stake in the UK food
delivery company. Shares in Renault SA rose after it scrapped plans to list its electric-vehicle business. Stoxx 600 +0.1%, DAX +0.1%, CAC +0.3%, FTSE 100 +0.6%. Banks +1.2%, Media +0.7%, Autos +0.6%. Telecom -0.9%, Basic Resources -0.8%.

Shares in Asia fell, led by declines in in Hong Kong and mainland China markets, amid renewed concerns over property developers and company earnings. Hong Kong stocks fell more than 2%,
while those on the mainland declined for a third day. The MSCI Asia Pacific Index fell 0.4%, with Tencent, AIA Group and TSMC among the biggest drags. EV maker BYD fell over 3% after full-year earnings fell short of analyst expectations due to a price war
in China.  Japanese and Korean equities reversed earlier gains, while Australia’s ASX 200 gained for a seventh straight day. Hang Seng Tech Index -3.3%, Hang Seng Index -2.3%, CSI 300 -1.8%, Sensex -1.1%, Taiwan -0.5%, Topix -0.1%, Kospi -0.1%. Nikkei 225
+0.1%, ASX 200 +0.3%, Vietnam +0.3%, Indonesia +0.5%         

FIXED INCOME: 
 

Treasury yields extended their drop after a cut in the quarterly borrowing estimate by the US Treasury yesterday eased concerns about the flood of debt being issued
to cover the federal deficit. Treasuries slightly richer across the curve led by long-end with 5s30s curve flatter by around 2bp. 10-year yields around 4.07%.  Markets expect a 47% chance of a Fed rate cut in March, the CME FedWatch tool showed, down from
88% a month earlier. China’s benchmark government bond yield fell to its lowest in nearly 22 years as mounting expectations for further monetary easing increased.   

METALS: 
   

Gold erased earlier gains as investors look to the federal Reserve meeting for fresh clues on when US monetary easing will start. The Federal Open Market Committee
meeting on Wednesday will be eyed in particular for indications on whether the central bank will start lowering borrowing costs in March, a scenario that swap markets have deemed increasingly unlikely in recent weeks. Gold is 1.4% lower in January so far,
heading for the first monthly decline in four.  Spot gold +0.05%, silver -0.5%.                  

ENERGY:  

Oil prices nudge lower as the market waited for a US response to the deadly attack on American troops in Jordan.  Meanwhile, Saudi Aramco announced it received a
directive from the Saudi Arabia’s energy ministry to maintain its maximum sustainable production capacity at 12 million barrels a day. Oil futures slumped more than 1% Monday, pulling back from their highest levels since November, as worries over China’s economy
and other concerns around the demand outlook sparked pressure. The downside remains limited though due to concerns around a potential intensification of fighting in the Middle East that could threaten crude flows. WTI -0.7%, Brent -0.8%, US Nat Gas +1.5%,
RBOB -2.2%.            

CURRENCIES:   

In currency markets, the euro reversed losses after stronger-than-expected GDP data from euro zone countries eased some concerns about struggling economies in the
region. Data showed surprisingly strong GDP readings from Italy and Spain at the end of last year, while France escaped a recession. The dollar slipped as traders waited for US data and the Federal Reserve’s policy decision. Nigeria’s naira plunged to a record
against the dollar following a revision of the methodology used to set the exchange rate, in effect the second devaluation of the currency in seven months. US$ Index -0.15%, GBPUSD -0.3%, EURUSD +0.05%, USDJPY +0.05%, AUDUSD -0.4%, NZDUSD -0.3%, USDCHF +0.3%.
 

Bitcoin +0.2%, Ethereum -0.1%.   

TECHNICAL LEVELS: 

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

• Upgrades
• Bank of America (BAC) Raised to Overweight at Morgan Stanley; PT $41
• Block (SQ) Raised to Outperform at Wedbush; PT $90
• Raised to Buy at BTIG; PT $85
• BNY Mellon (BK) Raised to Equal-Weight at Morgan Stanley; PT $62
• Citigroup (C) Raised to Overweight at Morgan Stanley; PT $65
• Equinox Gold (EQX CN) Raised to Buy at Desjardins; PT C$7.75
• Goldman Sachs (GS) Raised to Overweight at Morgan Stanley; PT $449
• Netflix (NFLX) Raised to Buy at Citic Securities; PT $600
• Sensata (ST) Raised to Outperform at Oppenheimer; PT $50
• Spotify (SPOT) Raised to Buy at UBS; PT $274
• Downgrades
• Aecon Group (ARE CN) Cut to Hold at Paradigm Capital; PT C$14
• AMD (AMD) Cut to Outperform at Raymond James
• Brookfield Infrastructure (BIP) Cut to Sector Perform at National Bank
• Enfusion (ENFN) Cut to Underweight at JPMorgan; PT $9
• Five Below (FIVE) Cut to Market Perform at Oppenheimer; PT $200
• Idexx Labs (IDXX) Cut to Neutral at Piper Sandler
• Masimo (MASI) Cut to Hold at Jefferies; PT $121
• Northern Trust (NTRS) Cut to Underweight at Morgan Stanley; PT $86
• Pacific Premier Bancorp (PPBI) Cut to Outperform at Raymond James
• Science 37 (SNCE) Cut to Neutral at Baird; PT $5.75
• Western Alliance (WAL) Cut to Equal-Weight at Wells Fargo; PT $72
• Initiations
• Acadia Pharma (ACAD) Rated New Outperform at Baird; PT $40
• Accenture (ACN) Rated New Buy at Mizuho Securities; PT $426
• Alexandria Real Estate (ARE) Rated New Buy at Deutsche Bank; PT $140
• American Homes (AMH) Rated New Buy at Deutsche Bank; PT $40
• AvalonBay (AVB) Reinstated Buy at Deutsche Bank; PT $206
• Boston Properties (BXP) Reinstated Hold at Deutsche Bank; PT $74
• Brandywine Realty (BDN) Rated New Hold at Deutsche Bank; PT $5.50
• Brixmor Property (BRX) Reinstated Buy at Deutsche Bank; PT $27
• Camden Property (CPT) Reinstated Hold at Deutsche Bank; PT $90
• CareTrust REIT (CTRE) Rated New Hold at Deutsche Bank; PT $23
• Celestica (CLS CN) Rated New Underperform at Baptista Research
• Cogent Comms (CCOI) Rated New Hold at Baptista Research; PT $80.20
• Cognizant (CTSH) Rated New Neutral at Mizuho Securities; PT $82
• CommVault (CVLT) Rated New Hold at Baptista Research; PT $84.20
• Confluent (CFLT) Rated New Hold at Loop Capital; PT $23
• CrowdStrike (CRWD) Rated New Outperform at Raymond James; PT $330
• CubeSmart (CUBE) Rated New Sell at Deutsche Bank
• Diodes (DIOD) Rated New Underperform at Baptista Research; PT $71.30
• Ecd Automotive Design (ECDA) Rated New Buy at Litchfield Hills; PT $8
• Elf Beauty (ELF) Rated New Neutral at Baird; PT $185
• Enveric Biosciences Inc (ENVB) Rated New Buy at HC Wainwright; PT $10
• Epam Systems (EPAM) Rated New Buy at Mizuho Securities; PT $340
• Equity LifeStyle (ELS) Rated New Hold at Deutsche Bank; PT $64
• Equity Residential (EQR) Reinstated Hold at Deutsche Bank; PT $64
• Essex Property (ESS) Rated New Hold at Deutsche Bank; PT $240
• Extra Space (EXR) Rated New Hold at Deutsche Bank
• Federal Realty (FRT) Reinstated Hold at Deutsche Bank; PT $109
• Genpact (G) Rated New Neutral at Mizuho Securities; PT $40
• Global Atomic (GLO CN) Rated New Speculative Buy at Canaccord; PT C$4.75
• Globalstar (GSAT) Rated New Buy at Baptista Research; PT $3.80
• Globant (GLOB) Rated New Buy at Mizuho Securities; PT $283
• Healthcare Realty Trust (HR) Rated New Hold at Deutsche Bank; PT $18
• Healthpeak Properties (PEAK) Rated New Hold at Deutsche Bank; PT $21
• Highwoods (HIW) Reinstated Buy at Deutsche Bank; PT $28
• Independence Realty (IRT) Reinstated Buy at Deutsche Bank; PT $18
• Instacart (CART) Rated New Equal-Weight at Morgan Stanley; PT $28
• Invitation Homes (INVH) Reinstated Hold at Deutsche Bank; PT $35
• JFrog (FROG) Rated New Hold at Baptista Research; PT $36.60
• Kilroy (KRC) Reinstated Hold at Deutsche Bank; PT $40
• Kimbell Royalty Partners (KRP) Rated New Buy at Truist Secs; PT $22
• Kimco Realty (KIM) Reinstated Hold at Deutsche Bank; PT $23
• Light & Wonder (LNW) Rated New Overweight at JPMorgan; PT $98
• Lithium Americas (LAC CN) Rated New Hold at HSBC; PT C$6.72
• LTC Properties (LTC) Rated New Hold at Deutsche Bank; PT $34
• Medical Properties (MPW) Reinstated Sell at Deutsche Bank; PT $3
• Mid-America (MAA) Rated New Hold at Deutsche Bank; PT $139
• National Health Investors (NHI) Rated New Buy at Deutsche Bank; PT $69
• National Storage (NSA) Rated New Sell at Deutsche Bank
• NeuroPace (NPCE) Rated New Outperform at Leerink; PT $22
• NexPoint Residential (NXRT) Rated New Buy at Deutsche Bank; PT $38
• Olema Pharma (OLMA) Rated New Buy at Citi; PT $20
• Omega Healthcare (OHI) Reinstated Buy at Deutsche Bank; PT $36
• Paycor HCM (PYCR) Rated New Buy at Baptista Research; PT $25
• Phillips Edison (PECO) Rated New Buy at Deutsche Bank; PT $41
• Pinstripes (PNST) Rated New Outperform at Oppenheimer; PT $6
• Public Storage (PSA) Rated New Sell at Deutsche Bank
• Rapid7 (RPD) Rated New Hold at Baptista Research; PT $59.40
• Regency Centers (REG) Reinstated Buy at Deutsche Bank; PT $74
• Sabra Health (SBRA) Rated New Buy at Deutsche Bank; PT $21
• SharkNinja (SN) Rated New Equal-Weight at Morgan Stanley; PT $54
• Sitio Royalties (STR) Rated New Buy at Truist Secs; PT $29
• SL Green (SLG) Reinstated Hold at Deutsche Bank; PT $48
• SoundHound AI (SOUN) Rated New Buy at Ladenburg Thalmann; PT $4
• Sprinklr (CXM) Rated New Buy at Baptista Research; PT $15.80
• Sprout Social (SPT) Rated New Hold at Baptista Research; PT $70.30
• Sun Communities (SUI) Rated New Hold at Deutsche Bank; PT $129
• UDR (UDR) Rated New Hold at Deutsche Bank; PT $40
• Unity Software (U) Rated New Buy at Citic Securities; PT $40
• Ventas (VTR) Reinstated Buy at Deutsche Bank; PT $60
• Welltower (WELL) Reinstated Buy at Deutsche Bank; PT $115
• WonderFi Technologies In (WNDR CN) Rated New Buy at Eight Capital
• Worthington Enterprises (WOR) Rated New Hold at Canaccord; PT $56

Data sources: Bloomberg, Reuters, CQG