Daily Game Plan

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

DATA/HEADLINES:    8:30ET Nonfarm Productivity, Unit Labor Costs, Initial Jobless Claims; 9:45ET S&P Global US Manufacturing
PMI; 10:00ET Construction Spending, ISM Manufacturing

TODAY’S HIGHLIGHTS and News:  

• ATF preparing to regulate private gun sales with background check
• Cease-fire negotiations between Israel and Hamas are still in the early stages
  
• Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas

World stocks steadied as investor focus returns to corporate earnings. Global factories delivered a largely uneven performance at the start of 2024, surveys showed.
Concerns over office market loans reverberated around the world. Inflation in the euro zone eased as expected last month but underlying price pressures fell less than forecast, official preliminary data showed. Sweden’s Riksbank held rates steady and said
it may lower borrowing costs as soon as the first half of the year, pivoting from a tightening campaign. The US carried out two separate strikes on Houthi targets in Yemen and intercepted a missile fired by the Iran-backed group, as the fallout from the Israel-Hamas
war continues to roil the region                          

EQUITIES: 
 

US equity futures get a moderate bounce overnight as investors prepared for the next wave of tech megacap earnings and reset their expectations on the timing of Federal Reserve interest-rate
cuts. Apple, Amazon.com and Meta Platforms earnings results are due after the close. Apple is seen narrowly avoiding a fifth straight sales decline.  Regional bank shares will be in focus again today after the sector’s main benchmark experienced its biggest
single day decline since the collapse of Signature Bank. New York Community Bancorp gained as much as 4% in premarket trading following its record plunge. BofA strategists warned that equity sentiment is ticking lower for the first time since October. Investors
are preparing for cuts and it is just about the timing, according to BofA.

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.4%, Russell 2000 +0.8%, DJI +0.05%    

In pre-market trading, Align Technology (ALGN) jumps 12% after the dental equipment firm reported fourth-quarter results and first-quarter guidance, which beat estimates. Arcutis Biotherapeutics
(ARQT) drops 6% after the drugmaker filed for a $300m mixed-securities shelf.  Canada Goose (GOOS) rises 11% after the parka retailer’s fiscal fourth-quarter revenue outlook exceeded the average analyst estimate.  Cardinal Health (CAH) falls 3% after posting
quarterly results. MaxLinear (MXL) declines 11% after the semiconductor device company gave a disappointing revenue forecast. Nextracker (NXT) surges 21% after the maker of measuring machines for the solar industry boosted its revenue guidance. Qualcomm (QCOM)
slips 2% after the world’s biggest seller of smartphone processors said it’s expecting a modest recovery for the industry in 2024. Wolfspeed (WOLF) falls 5% after providing a disappointing revenue forecast

European gauges are battling to recoup early losses with travel, autos and energy shares outperforming while real estate and banks are lower again. The BOE held its key rate at 5.25%
as expected and dropped references to further tightening in its guidance. Banks were weighed down by BNP Paribas SA (-7%) as it lowered performance targets for 2025. ING Groep NV dropped over 6% after warning net interest income could decline. Deutsche Bank
more than quadrupled its US commercial real estate provisions. Shell (SHEL LN +2.5%) will buy back $3.5 billion of shares this quarter after a big earnings beat. Adidas AG fell sharply after signaling a profit drop this year due to unfavorable currency movements.
Roche Holding AG shares also slipped as it forecast a sluggish recovery in sales and earnings. Volvo Car AB was the biggest gainer as it announced it would stop funding struggling electric vehicle maker Polestar. Stoxx 600 ~flat, DAX +0.05%, CAC -0.6%, FTSE
100 +0.3%. Autos +1.4%, Travel +1.3%, Energy +1.2%, Technology +0.9%. REITs -1.1%, Basic Resources -1%, Banks -1%.   

Asian equities were mixed as Japan and Australia followed the US market lower, while Chinese stocks gained on the government’s latest policy-support efforts. The rebound came after a
senior finance ministry official said Beijing will maintain the strength of its fiscal spending, while focusing on favorable policies for semiconductors and the tech sector.  The MSCI Asia Pacific Index fell 0.4%, although sentiment was helped by a stabilization
in Chinese blue chips along with some better surveys on home prices and manufacturing. China’s factory activity expanded in January with the first rise in new export orders since June, helping lift business confidence to a nine-month high, a private-sector
survey showed.  China Caixin Manufacturing PMI came in slightly better at 50.8 versus 50.6. Tokyo-based Aozora Bank plunged more than 21% after warning of a loss tied to investments in US commercial property. South Korea outperformed in the region following
upbeat trade data and a survey showing factory activity grew for the first time in 19 months. Kospi +1.8%, Vietnam +0.7%, Hang Seng Index +0.5%, Taiwan +0.4%, CSI 300 +0.1%. Sensex -0.2%, Philippines -0.3%, Shanghai Composite -0.6%, Nikkei 225 -0.8%, ASX 200
-1.2%.              

FIXED INCOME: 
 

Treasuries pared some of yesterday’s gains as traders digest the Fed’s pushback on a March cut and fresh concerns about regional lenders. Goldman now sees a first
reduction in rates in May. In Europe, core and semi-core 10yr yields are higher by 4bps on weaker demand for Spanish and French supply. The US session includes weekly jobless claims and January manufacturing gauges, with January jobs report ahead Friday. 10-year
yields around 3.93%, 2-year yield ~4.23%. Bank of America changed its first rate cut forecast to June from March.

METALS: 
   

Gold snapped three days of gains, slipping back after Federal Reserve Chairman Jerome Powell damped hopes of a rate cut in March. Still, gold is heading for a weekly
gain as escalating tensions in the Middle East boost haven demand.  Spot gold -0.3%, silver -1.7%. 

ENERGY:  

Oil rebounded after the biggest decline in three weeks on Wednesday as investors weighed the risks from any US retaliation to a deadly attack in Jordan against signs
of robust American supply.  There was limited price movement after two OPEC+ sources said that the Thursday meeting of the group of oil-producing countries left production policy changes off its agenda. JPMorgan analysts said they expect China to remain the
single largest contributor to global oil demand growth in 2024. WTI +1%, Brent +0.9%, US Nat Gas +1%, RBOB +0.9%.

CURRENCIES:   

In currency markets, the dollar traded stronger versus the majority of its Group-of-10 peers in the aftermath of the Federal Reserve policy meeting. Sterling held
losses after the BOE rate decision. The yen is the only gainer against the greenback among its Group-of-10 peers. Riksbank’s dovish statement weighs on the Swedish Krona. US$ Index +0.3%, GBPUSD -0.2%, EURUSD -0.5%, USDJPY -0.05%, AUDUSD -0.8%, NZDUSD -0.5%,
USDSEK +0.9%.

Bitcoin -1%, Ethereum -0.6%. Spot bitcoin ETFs from BlackRock and Fidelity Investments each saw more than $2 billion of net inflows during their first 12 trading
days, while Grayscale Bitcoin Trust suffered more than $5 billion of net outflows.   

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
• Cigna (CI) Raised to Buy at Deutsche Bank; PT $370
• Euronet (EEFT) Raised to Overweight at Stephens; PT $120
• Netstreit (NTST) Raised to Sector Weight at KeyBanc
• Qualcomm (QCOM) Raised to Buy at Fubon; PT $175
• Rockwell Automation (ROK) Raised to Buy at Daiwa; PT $310
• Veritone (VERI) Raised to Neutral at Roth MKM; PT $1.85
• Downgrades
• Alphabet (GOOGL) Cut to Hold at China Renaissance; PT $146
• AMD (AMD) Cut to Hold at Punto Casa de Bolsa; PT $174.26
• Amplitude (AMPL) Cut to Underweight at Morgan Stanley; PT $12
• Brookfield Asset Management (BAM CN) Cut to Hold at HSBC; PT C$58.26
• Corning (GLW) Cut to Reduce at HSBC; PT $29
• Extreme Networks (EXTR) Cut to Neutral at Rosenblatt Securities Inc
• Lennox (LII) Cut to Underweight at JPMorgan; PT $330
• New York Community Bancorp (NYCB) Cut to Sector Perform at RBC; PT $7
• Cut to Hold at Jefferies; PT $7
• Nucor (NUE) Cut to Sell at CFRA
• PagSeguro (PAGS) Cut to Neutral at New Street Research; PT $15
• PPG Industries (PPG) Cut to Neutral at Redburn; PT $160
• Qualcomm (QCOM) Cut to Neutral at Citi; PT $160
• StoneCo (STNE) Cut to Neutral at UBS; PT $21
• Tricon (TCN CN) Cut to Peerperform at Wolfe
• ZoomInfo (ZI) Cut to Equal-Weight at Morgan Stanley; PT $20
• Initiations
• Arvinas (ARVN) Reinstated Buy at Goldman; PT $70
• Biote (BTMD) Rated New Buy at Jefferies; PT $6.55
• Bunge Global (BG) Rated New Buy at Citi; PT $108
• Campbell Soup (CPB) Rated New Sell at Citi; PT $41
• Conagra (CAG) Rated New Neutral at Citi; PT $30
• Darling Ingredients (DAR) Rated New Neutral at Citi; PT $49
• Dynavax (DVAX) Reinstated Neutral at Goldman; PT $20
• General Mills (GIS) Rated New Neutral at Citi; PT $67
• Guidewire (GWRE) Rated New Outperform at Raymond James; PT $125
• Hershey (HSY) Rated New Neutral at Citi; PT $213
• Hormel (HRL) Rated New Neutral at Citi; PT $31
• J M Smucker (SJM) Rated New Buy at Citi; PT $153
• Kellanova (K) Rated New Neutral at Citi; PT $57
• Kraft Heinz (KHC) Rated New Buy at Citi; PT $43
• Lamb Weston (LW) Rated New Buy at Citi; PT $132
• Mama’s Creations Inc (MAMA) Rated New Buy at Roth MKM; PT $6
• Mondelez (MDLZ) Rated New Buy at Citi; PT $87
• Quanterix (QTRX) Rated New Sector Outperform at Scotiabank; PT $30
• Regency Centers (REG) Rated New Overweight at Wells Fargo; PT $70
• SilverBow Resources (SBOW) Rated New Buy at Mizuho Securities; PT $40
• SolarWinds (SWI) Reinstated Neutral at JPMorgan; PT $14
• Stellantis (STLA) Rated New Outperform at Wolfe
• Strathcona Resources (SCR CN) Rated New Outperform at ATB Capital
• Sylogist (SYZ CN) Rated New Buy at Stifel Canada; PT C$14
• Tyson (TSN) Rated New Neutral at Citi; PT $56
• Vista Energy (VISTAA MM) ADRs Rated New Buy at Banco BTG Pactual; PT $40

Data sources: Bloomberg, Reuters, CQG