Daily Game Plan

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

DATA/HEADLINES:   8:15ET ADP Employment Change; 8:30ET Employment Cost Index, US Treasury Funding Announcement;
9:45ET MNI Chicago PMI; 2:00ET FOMC Rate Decision; 2:30ET Fed’s Powell speaks

TODAY’S HIGHLIGHTS and News:  

• NFL NOTES PLAYOFFS SET RECORD WITH 38.5M VIEWERS PER GAME
• Meta, X, TikTok, Snap, and Discord CEOs to testify before the Senate Judiciary Committee
  
• China said the US may abandon Taiwan if Donald Trump wins the presidency
  
• Wage differential between job-stayers and job-changers has collapsed to the lowest on record
  

World stocks nudge higher as global markets look ahead to the latest monetary policy decision from the US Federal Reserve and as earning results continue to pour
in. The Fed’s outlook could set the tone for February while investors await more support from Beijing to boost the Chinese economy and stock market.  Data out of Japan showed tepid wage data and cooling inflation that may leave room for the Bank of Japan to
take its time raising rates. An official survey in China showed manufacturing activity shrinking in January for a fourth month. UK home prices rose 0.7% in January, faster than expected. President Biden said he had decided how to respond to the deadly attack
on US troops without giving further details but added that he wanted to avoid a wider war in the Middle East. Hamas said yesterday it was studying a proposal for a ceasefire to the fighting in Gaza.                            

EQUITIES: 
 

US equity futures are mostly lower, with Nasdaq leading losses as results from Microsoft, Alphabet and Advanced Micro Devices failed to show the large benefits from AI that investors
expected. In after-hours trading, shares of Alphabet dropped more than 5%, while Microsoft slipped 1.6% after the tech giants posted quarterly earnings. AMD gave a weak revenue forecast, echoing rival Intel’s downbeat view of the PC and data center chip markets.
Iran vowed to retaliate against any US strike on its soil or assets abroad, as the White House readies a response to an attack that killed three American soldiers. Investor focus now shifts to the first interest-rate decision of the year from the Fed.

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.9%, Russell 2000 +0.4%, DJI +0.2%  

In pre-market trading, Paramount Global soared as much as 21% after Bloomberg reported that media mogul Byron Allen made a $14.3 billion offer for the media and entertainment company. 
Tesla fell 2.7% after a Delaware judge voided Elon Musk’s $55 billion pay package. Advanced Micro Devices (AMD) slips 5% after the chipmaker gave a revenue forecast that was weaker than expected. Alphabet (GOOGL) falls 5.6% reporting fourth-quarter revenue
from its core search advertising business that fell short of analysts’ estimates.  Boston Scientific (BSX) jumps 3% after earnings beat estimates. Mondelez (MDLZ) falls 4% after the maker of Oreo cookies issued weaker-than-expected guidance. Rockwell Automation
(ROK) slides ~8% after reporting first-quarter sales and adjusted earnings that trailed estimates. SoFi Technologies (SOFI) slips 3% as Morgan Stanley issued a downgrade. Starbucks (SBUX) gains 3% as management maintained confidence in the company’s 2024 profit
goal. Stryker (SYK) climbs 5% after the medical-device manufacturer forecast for 2024 beat expectations.

European gauges gave up early gains and are trading mixed. The Stoxx 600 is marginally higher after the index closed at a two year high on Tuesday. Bank shares outperform while the retail
sector largely underperforms. Novo Nordisk shares were up more than 3% in early trade before reversing gains, after the Danish company reported better than expected earnings amid soaring demand for weight loss drug Wegovy and diabetes drug Ozempic. H&M plunged
10% after it missed profit forecasts and made a surprise announcement of a new CEO. Novartis AG shares slumped after the drugmaker reported weak prostate cancer drug sales. Spanish lender Santander rose over 2% after reporting a record-high profit for the
last quarter of 2023. Stoxx 600 +0.2%, DAX -0.1%, CAC +0.1%, FTSE 100 +0.1%. Banks +1.1%, Autos +0.9%, Basic Resources +0.8%. Retail -1.8%, Technology -0.6%.

Asian markets were mixed as investors evaluated a slew of economic data from across the region, including China and Australia. The MSCI Asia Pacific Index rose 0.2%, trimming its monthly
decline to 2%.  Shares in Japan and Australia gained but it was another losing session for Chinese stocks on a lack of details on a reported market-stabilization fund.  Mainland Chinese stocks fell to a five-year low while the ASX 200 reached an all-time high
after the country’s fourth-quarter inflation rate was lower than expected at 4.1%.  South Korea’s Kospi fell after heavyweight Samsung Electronics reported a 34% fall in operating profit year-on-year and a 73.4% plunge in net profit. Philippines’ equities
rose after the nation’s fourth-quarter GDP beat estimates. ASX 200 +1.1%, Topix +1%, Sensex +0.9%, Philippines +0.4%, Kospi -01%, Taiwan -0.8%, CSI 300 -0.9%, Vietnam -1.3%, Hang Seng Index -1.4%.         

FIXED INCOME: 
 

Treasuries fluctuated ahead of the Fed rate decision. US session features ADP employment and the quarterly refunding announcement. US yields remain within 1bp-2bp
of Tuesday’s closing levels; 10-year yield around 4.02% after briefly dropping below 4% during the European session. In Europe, core 10yr yields are lower by 3.6bps on better-than-expected French CPI figures and weaker German retail sales data.  The Fed funds
futures market has priced in a nearly 98% probability that the central bank will leave rates unchanged this month, according to the CME FedWatch tool.  Investors will be looking for clues on shifts in the central bank’s policy stance in Fed Chair Jerome Powell’s
post-meeting statement.  

METALS: 
   

Gold steadied as traders await a Federal Reserve meeting for clues on when the US central bank will start cutting interest rates. Total gold demand may expand again
in 2024 after hitting a record 4,899 tons last year, according to the World Gold Council. Consumption was supported by strong OTC market activity and sustained central-bank buying, which is expected to continue. Spot gold is flat, silver -0.4%.

ENERGY:  

Oil prices fell as lackluster economic activity in China, the world’s biggest crude importer, weighed on sentiment.  However, both oil benchmarks are set to rise
this month as conflicts in the Middle East expanded, disrupting oil and natural gas tanker shipping routes, adding to delivery costs. Crude stockpiles at Cushing fell by 2 million barrels last week, the API said. That would cut holdings at the storage hub
to the lowest in two months if confirmed by the EIA. WTI -1.5%, Brent -1.3%, US Nat Gas +1.6%, RBOB -1.5%.

CURRENCIES:   

In currency markets, the dollar ticked higher and headed for its biggest monthly gain since September while the yen was set for its sharpest monthly drop in almost
a year.  A sharp slowdown in Australian inflation pushed the Aussie dollar down as much as 0.5%. The Loonie is easing along with oil as attention turns to Canadian growth for November. The euro slid after data showed that French inflation eased more than expected
in January, only to rebound from day lows as German regional CPI data came out.  US$ Index +0.1%, EURUSD flat, GBPUSD -0.05%, USDJPY +0.1%, AUDUSD -0.3%, USDCAD +0.2%, USDNOK +0.2%.

Bitcoin -2.3%, Ethereum -3.3%.   

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
• Check Point Software (CHKP) Raised to Outperform at William Blair
• CommVault (CVLT) Raised to Overweight at KeyBanc; PT $109
• Core Scientific (CORZQ) Raised to Buy at Compass Point; PT $8.50
• Danaher (DHR) Raised to Buy at Nephron Research; PT $275
• Manulife Financial (MFC CN) Raised to Neutral at CIBC; PT C$30
• SM Energy (SM) Raised to Buy at Seaport Global Securities; PT $50
• Sun Life Financial (SLF CN) Raised to Outperform at CIBC; PT C$75
• TechTarget (TTGT) Raised to Buy at UBS; PT $45
• Valeo Pharma (VPH CN) Raised to Buy at Echelon Wealth
• Downgrades
• 2Seventy Bio (TSVT) Cut to Market Perform at Cowen
• Cadence Bank (CADE) Cut to Market Perform at Hovde Group; PT $32.50
• CF Industries (CF) Cut to Neutral at UBS
• Crexendo (CXDO) Cut to Neutral at B Riley; PT $6.75
• Dr Reddy’s (DRRD IN) ADRs Cut to Underperform at Jefferies; PT $61
• Eagle Bulk (EGLE) Cut to Hold at Jefferies; PT $55
• Enthusiast Gaming (EGLX CN) Cut to Sector Perform at Scotiabank
• Fortune Brands (FBIN) Cut to Market Perform at BMO; PT $82
• General Motors (GM) Cut to Hold at Punto Casa de Bolsa
• Johnson Controls (JCI) Cut to Hold at Deutsche Bank; PT $60
• LSB Industries (LXU) Cut to Neutral at UBS; PT $9
• Sanmina (SANM) Cut to Hold at CFRA
• SoFi Technologies (SOFI) Cut to Underweight at Morgan Stanley; PT $6.50
• Southwestern Energy (SWN) Cut to Neutral at Seaport Global Securities
• Verizon (VZ) Cut to Equal-Weight at Barclays; PT $44
• Vertex Pharmaceuticals (VRTX) Cut to Underperform at Baird; PT $325
• Initiations
• Bridgebio (BBIO) Rated New Market Perform at BMO; PT $37
• Brookfield Renewable Partners (BEP-U CN) Reinstated Sell at Veritas Investment Research Co
• Essa Pharma (EPIX) Rated New Buy at JonesTrading; PT $18
• GE (GE) Rated New Buy at President Capital Management; PT $156
• Northwest Natural (NWN) Rated New Neutral at Janney Montgomery; PT $39
• Saputo (SAP CN) Rated New Buy at Jefferies; PT C$34
• Sarepta (SRPT) Rated New Outperform at BMO; PT $170
• Silence Therapeutics (SLN) ADRs Rated New Outperform at BMO; PT $67
• Toast (TOST) Rated New Sector Perform at RBC; PT $19

Data sources: Bloomberg, Reuters, CQG