Daily Game Plan

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

DATA/HEADLINES:   8:30ET CPI Revisions; 1:30ET Fed’s Logan speaks

TODAY’S HIGHLIGHTS and News:  

• USDA forecasts net farm income to plunge 25.5% in 2024
• Tucker Carlson’s interview revealed Putin invaded Ukraine out of the apparently sincere belief that he’s retaking lands that rightfully belong to Russia
• Putin said he’d consider negotiations with Ukraine if the US stops supplying weapons to Kyiv
• Super Bowl: you can place a bet on whether Swift will cry at the game

Global markets treaded water before the release of US inflation data that could shift the narrative of the Federal Reserve’s fight against inflation. The MSCI All
Country stock index was little changed, and up ~2.5% for the year.  Global equity funds experienced heavy outflows in the week to Feb. 7.  According to data from LSEG, investors withdrew a net $13.38 billion from global equity funds, the most in a week since
June 21, 2023. US equity funds suffered about $11.74 billion worth of net selling, while pouring about $3.4 billion and $1.3 billion into Asian and European. US earnings and sales delivery is significantly outpacing that of Europe, JPMorgan said, underpinning
its preference for the region.

EQUITIES: 
 

US equity futures inched higher a day after the S&P500 rose briefly above 5,000 for the first time ever, with a 21% surge since October. Early focus this morning will be on the release
of revisions to the consumer price index. The S&P500 Index has posted only one weekly drop since late October. According to Bank of America’s Michael Hartnett, the rally is getting close to triggering sell signals.

Futures ahead of the bell: E-Mini S&P +0.15%, Nasdaq +0.25%, Russell 2000 +0.4%, DJI +0.1%    

In pre-market trading, Affirm Holdings (AFRM) sinks 7% after the buy-now, pay-later firm’s forecast for annual transaction volume came in below expectations. Cryptocurrency-linked stocks
rallied as Bitcoin rises past the $47,000 mark. Marathon Digital (MARA) +11%, Riot Platforms +9%. Cloudflare (NET) soars 27% after reporting revenue that beat expectations. Expedia (EXPE) tumbles 14% after the online travel agency reported fourth-quarter gross
bookings that missed estimates. Masonite International (DOOR) soars 35% after agreeing to be bought by Owens Corning (OC). Take-Two Interactive (TTWO) falls 8% after the video-game company slashed its full-year net bookings forecast.

European gauges ticked marginally higher, lifted by strong reports from luxury firm Hermes International SCA and gaming firm Ubisoft SA (+18%), though poor sales from L’Oreal tempered
the optimism. German inflation eased in January to 3.1%, the federal statistics office said, confirming preliminary data. The ECB’s Kazaks said easing hopes for the next two meetings may be too aggressive, though Villeroy said cuts are coming this year. L’Oreal
shares tumbled 7% as Chinese shoppers reined in travel spending, while Tesco advanced after Barclays said it will acquire much of the supermarket chain’s banking business.  Stoxx 600 +0.1%, DAX +0.1%, CAC -0.05%, FTSE 100 +0.05%. Technology +0.9%, Healthcare
+0.9%, Autos +0.8%. Utilities and Food & Beverage -1%.

Asian stocks were mostly lower, weighed by Hong Kong, while many markets in the region were shut for public holidays. Markets were shut for the Lunar New year holidays in mainland China,
Taiwan, South Korea, Indonesia, the Philippines and Vietnam, while Hong Kong traded thinly and shut early.  China will be off all next week while Hong Kong will be closed Monday and Tuesday and Japan will be shut on Monday. The MSCI Asia Pacific Index slipped
0.2%. Shares in Japan, which has been receiving a surge of foreign inflows as investors flee China, were mixed. Nissan shares collapsed almost 12% for their largest fall in decades after the automaker cut its outlook on slumping China sales. SoftBank Group
gained 8.7% after strong earnings. Meanwhile Grab Holdings and GoTo Group, Southeast Asia’s biggest ride-hailing companies, have restarted talks for a merger. Sensex +0.2%, Nikkei 225 +0.1%, ASX 200 +0.1%, Topix -0.2%, Hang Seng Index -0.8%.

FIXED INCOME: 
 

Treasuries are marginally cheaper on the day, with yields higher by 1bp-2bp across the curve. US Treasuries came under light selling pressure as hawkish comments
were made by ECB’s Kazaks and BoE’s Haskel pushing back on rate cuts. Ten-year Treasuries held steady, around 4.17%, up about 15 basis points in the past five days. 2-year yield around 4.47%. Curve is slightly flatter.  

METALS: 
   

Gold moved lower and is headed for a small weekly decline on further signs the Federal Reserve may delay rate cuts. Investors will also be looking at annual revisions
to monthly US inflation data, for clues, after last year’s adjustments cast doubt on the Fed’s progress in taming consumer prices. Spot gold -0.4%, silver is flat. 

ENERGY:  

Oil prices edged lower but are on track for weekly gains of about 5%, with the market watching events in the Middle East after Israel rejected a ceasefire offer from
Hamas. India’s state oil refiners are in talks with Rosneft to secure long-term supplies of Russian crude, sources said. WTI -0.2%, Brent -0.4%, US Nat Gas -3.5%, RBOB -0.5%.

CURRENCIES:   

It’s been a quiet few days in the currency space, aside from the yen. The Japanese yen steadied after slipping 0.8% against the dollar on Thursday, in the wake of
comments from a Bank of Japan deputy governor suggesting the central bank will be in no rush to shift its easy policy settings. The Dollar is headed for a fourth weekly gain, pushing the yen to a 10-month low. Elsewhere, the New Zealand dollar outperformed
amid speculation of another interest rate hike by its central bank. Markets are bracing for data on annual US CPI revisions, which consist of revised monthly inflation figures going back five years. US$ Index +0.1%, USDJPY +0.1%, GBPUSD -0.1%, EURUSD -0.1%,
AUDUSD +0.3%, NZDUSD +0.6%.

Bitcoin +4.4%, Ethereum +3.7%. Bitcoin advanced beyond $47,000 and reached a one-month high, supported by signs of steady inflows into a batch of US funds for the
token as well as growing attention on the so-called halving due in April. Bitcoin is now up 11% so far this year, beating even the so-called Magnificent Seven mega-cap tech stocks.   

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
• ARC Resources (ARX CN) Raised to Outperform at BMO; PT C$25
• Aurora Cannabis (ACB CN) Raised to Buy at Canaccord
• Bunge Global (BG) Raised to Buy at HSBC; PT $105
• Computer Modelling Group (CMG CN) Raised to Buy at Canaccord; PT C$11
• Enel Chile (ENELCHIL CI) ADRs Raised to Outperform at Grupo Santander
• Femsa (FEMSAUBD MM) ADRs Raised to Buy at HSBC; PT $158
• Globant (GLOB) Raised to Outperform at Grupo Santander; PT $260
• IGM Biosciences (IGMS) Raised to Outperform at RBC; PT $21
• Inotiv (NOTV) Raised to Buy at Jefferies; PT $11.50
• Liberty Global (LBTYA) Raised to Buy at Citi; PT $24
• Downgrades
• Albemarle (ALB) Cut to Neutral at Citi; PT $120
• ARM Holdings PLC (ARM) ADRs Cut to Underperform at Grupo Santander
• Asbury Auto (ABG) Cut to Hold at Craig-Hallum; PT $230
• Bradesco (BBDC4 BZ) ADRs Cut to Hold at Jefferies; PT $3
• Brookfield Renewable Partners (BEP-U CN) Cut to Neutral at JPMorgan
• Brookfield Renewable (BEPC CN) Cut to Neutral at JPMorgan; PT C$41.73
• Cemex (CEMEXCPO MM) ADRs Cut to Equal-Weight at Barclays; PT $9
• Civista Bancshares (CIVB) Cut to Equal-Weight at Stephens; PT $19
• EnerSys (ENS) Cut to Market Perform at Oppenheimer
• Envista Holdings (NVST) Cut to Hold at Jefferies; PT $23
• Everest Group Ltd (EG) Cut to Equal-Weight at Wells Fargo; PT $402
• Expedia (EXPE) Cut to Neutral at Citi; PT $156
• Lululemon (LULU) Cut to Underperform at BNPP Exane; PT $415
• PayPal (PYPL) Cut to Hold at DZ Bank; PT $60
• Prudential Financial (PRU) Cut to Market Perform at Raymond James
• RXO, Inc. (RXO) Cut to Neutral at BofA; PT $22
• Spectrum Brands (SPB) Cut to Hold at Canaccord; PT $86
• Synlogic (SYBX) Cut to Sell at HC Wainwright
• Cut to Market Perform at Leerink; PT $1
• Zurn Elkay Water (ZWS) Cut to Neutral at Mizuho Securities; PT $34
• Initiations
• Allurion Technologies (ALUR) Rated New Buy at Jefferies; PT $5
• Alphatec (ATEC) Rated New Overweight at Wells Fargo; PT $26
• Chicago Atlantic (REFI) Rated New Overweight at Zuanic
• Decibel Cannabis Co Inc (DB CN) Rated New Overweight at Zuanic
• Gold Flora (GRAM CN) Rated New Overweight at Zuanic
• Green Thumb Industries Inc (GTII CN) Rated New Overweight at Zuanic
• Jushi Holdings (JUSH CN) Rated New Overweight at Zuanic
• Newlake Capital Partners (NLCP) Rated New Overweight at Zuanic
• Ocular Therapeutix (OCUL) Rated New Buy at BofA; PT $15
• Parex Resources (PXT CN) Reinstated Neutral at Banco BTG Pactual
• Pyxis Oncology (PYXS) Rated New Buy at BTIG; PT $8
• StateHouse Holdings Inc (STHZ CN) Rated New Neutral at Zuanic
• Tidewater (TDW) Rated New Buy at Johnson Rice; PT $88
• Tilt Holdings (TILT CN) Rated New Overweight at Zuanic
• Verano Holdings (VRNO CN) Rated New Overweight at Zuanic
• Village Farms International (VFF) Rated New Overweight at Zuanic
• WM Technology (MAPS) Rated New Neutral at Zuanic
• Yum China (YUMC) Reinstated Outperform at Haitong Intl

Data sources: Bloomberg, Reuters, CQG