Daily Game Plan

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

DATA/HEADLINES:   9:20ET Fed’s Bowman speaks; 11:00ET NY Fed 1-Yr Inflation Expectations; 12:00ET Fed’s Barkin speaks;
1:00ET Fed’s Kashkari speaks

TODAY’S HIGHLIGHTS and News:  

• ECB’s Panetta said “the time for rate cuts are fast approaching”
• Kansas City Chiefs became the first back-to-back Super Bowl champions in 19 years
• The Biden campaign joined TikTok—despite authorities previously flagging the Chinese-owned social media platform as a national security concern
• A soccer player has died after being struck by lightning mid-game in Indonesia

World stocks were steady at their highest in more than two years, after rising for three straight weeks. Trading was subdued as investors waited for US inflation
data while most Asian markets were closed, alongside Brazil and Argentina. With Chinese trading paused for Lunar New Year, US consumer price figures due Tuesday will be key for market sentiment this week. Israel launched a series of airstrikes on Rafah early
today and freed two hostages that were seized during the Oct. 7 raid by Hamas, ahead of a potential ground attack on the southern Gaza city where more than one million people have sought refuge from the war against Hamas.

EQUITIES: 
 

US equity futures were muted ahead of Tuesday’s key consumer price index report, which has the potential to shape timing of a first Fed rate cut. Investors are taking a breather after
US stocks gained for 14 out of the past 15 weeks.  The annual US inflation rate is forecast to have dropped to 2.9% in January from 3.4% the prior month. That would be the first reading below 3% since March 2021.  The rally in Big Tech looked set to extend,
as Amazon.com, Nvidia and Tesla ticked higher in premarket trading.  In M&A news, Diamondback Energy reached an agreement to buy fellow Texas oil-and-gas producer Endeavor Energy.

Futures ahead of the bell: E-Mini S&P is flat, Nasdaq +0.05%, Russell 2000 +0.3%, DJI -0.1%    

In pre-market trading, Bioxcel Therapeutics (BTAI) gains 24% after the company said it received fast track designation from the FDA for a treatment aimed at small cell neuroendocrine
prostate cancer. Diamondback Energy (FANG) shares are up almost 1% after the company reached an agreement to buy fellow Texas oil-and-gas producer Endeavor Energy through a $26 billion deal. Joby Aviation (JOBY) rises 5% as the company signed an agreement
with Dubai’s Road and Transport Authority that grants it the exclusive right to operate air taxis in the Emirate for six years. Monday.com (MNDY) falls ~10% after 4Q results weren’t enough to push the application software company higher as shares have soared
nearly 90% since October. Rivian (RIVN) slips 4% after Barclays cut the recommendation on the electric vehicle maker’s stock, citing increased signs of a broader EV slowdown. Trimble (TRMB) drops 5% after providing a 1Q forecast that disappointed.

European gauges are mixed after opening in positive territory with real estate, consumer product and construction shares outperforming while technology stocks lag. It’s been a busy day
on the deals front, with the family of Italian billionaire Massimo Moratti agreeing to sell a controlling stake in refiner Saras SpA to the commodities trading giant Vitol Group. Shares in Italian luxury brand Tod SpA rose as much as 18% after the founding
family said it had enlisted buyout firm L Catterton in a new attempt to take the company private. In the UK, the government is set to publish data this week that will show whether a stagnating economy tipped into recession last year. JPMorgan analysts said
UK equities could offer a better risk-reward as they’re trading at a record discount after significantly lagging behind peers last year. Shares in the UK underperform with AstraZeneca decreasing 1.7% and Rolls-Royce Holdings falling over 3%. Stoxx 600 +0.3%,
DAX +0.3%, CAC +0.4%, FTSE 100 -0.1%. REITs +1.5%, Utilities +1%, Construction +0.9%. Technology -0.4%.

Asian stocks declined amid muted trading volumes with many markets in the region closed for holidays. Markets in China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam and Malaysia
were closed for holidays. Stocks fell in Australia, India and New Zealand, while shares in Indonesia rose. Local points to watch this week include the Indonesian presidential election on Wednesday and earnings from major companies including Sony and Commonwealth
Bank of Australia. Indonesia +0.8%, Thailand +0.1%, ASX 200 -0.4%, Philippines -0.6%, Sensex -0.7%.

FIXED INCOME: 
 

Treasuries are slightly lower across the curve amid bigger moves in core European rates. Europe, core and semi-core 10yr yields have plunged 5bps after ECB’s Fabio
Panetta in weekend comments said the time for interest-rate cuts “is fast approaching.” Monday’s US session has few scheduled events, although corporate issuance slate is expected to be busy ahead of Tuesday’s CPI data. US yields richer by 1.5bp-2bp across
the curve leaving spreads within 1bp of Friday’s close. US 10-year yields hovering around 4.155%. 2-year yield ~4.46%. 

METALS: 
   

Gold is steady following a weekly decline, as traders weighed the outlook for interest rates ahead of crucial US economic data due this week. The US inflation rate
due Tuesday is forecast to have dropped to 2.9% in January from 3.4% the prior month. The lack of clarity over when the Fed is likely to start easing monetary policy has seen gold trade in a narrow band this year. Spot gold +0.05%, silver +2%.  

ENERGY:  

Crude oil slipped after Iran’s foreign minister flagged the Israel-Hamas conflict could be moving closer to a diplomatic solution. Logistics disruptions in the Red
Sea continued on Monday, with Yemen-based Houthis saying they had targeted a cargo ship in the Red Sea, which they claimed was American. Meanwhile, OPEC is ready to tweak its policy at any time to maintain stability in the oil market, Saudi’s Energy Minister
said at a conference. WTI -1%, Brent -1%, US Nat Gas -0.8%, RBOB +0.2%.

CURRENCIES:   

In currency markets, the dollar was steady as a holiday in most major Asian markets subdued the start of a likely busy week, with all eyes on US inflation data tomorrow.
Analysts expect US core CPI to come in at 0.3% month on month in January, but a still elevated 3.8% year on year. The yen held near a two-month low reached on Friday following comments from central bankers that the Bank of Japan will take its time raising
rates. The euro ticked lower as traders await a reading of the euro zone’s economic growth in the fourth quarter on Wednesday that could offer fresh direction. NZDUSD declined, with RBNZ Governor Adrian Orr expressing concerns about inflation levels in New
Zealand. US$ Index +0.05%, GBPUSD -0.15%, EURUSD -0.15%, USDJPY -0.2%, AUDUSD -0.02%, USDNOK -0.5%, NSDUSD -0.4%.

Bitcoin -0.5%, Ethereum -0.9%.  Prepare for a Bitcoin FOMO rally to record highs: Bernstein.

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
• Cass Information (CASS) Raised to Overweight at Piper Sandler; PT $51
• COPT Defense Properties (CDP) Raised to Outperform at Evercore ISI
• Corteva (CTVA) Raised to Buy at Loop Capital; PT $65
• Lincoln National (LNC) Raised to Hold at Jefferies; PT $26
• Lowe’s (LOW) Raised to Overweight at JPMorgan; PT $265
• Marqeta (MQ) Raised to Buy at BofA
• Mohawk Industries (MHK) Raised to Buy at Deutsche Bank; PT $152
• Old Republic (ORI) Raised to Overweight at Piper Sandler
• PepsiCo (PEP) Raised to Buy at Citi; PT $195
• Rocket Lab USA (RKLB) Raised to Buy at Citi; PT $6
• Sangoma Technologies (STC CN) Raised to Speculative Buy at Canaccord
• Teva (TEVA IT) ADRs Raised to Overweight at Piper Sandler; PT $19
• United Therapeutics (UTHR) Raised to Neutral at Goldman; PT $215
• Viavi (VIAV) Raised to Buy at Stifel; PT $13
• Willis Towers (WTW) Raised to Market Perform at BMO; PT $298
• Raised to Buy at Citi; PT $315
• Downgrades
• Assurant (AIZ) Cut to Market Perform at KBW; PT $182
• Big Lots (BIG) Cut to Sell at Loop Capital; PT $1
• Construction Partners (ROAD) Cut to Neutral at Baird; PT $50
• CVS (CVS) Cut to Hold at Accountability Research; PT $80
• Everest Group Ltd (EG) Cut to Neutral at Citi; PT $375
• FMC Corp (FMC) Cut to Hold at Loop Capital; PT $55
• Hershey (HSY) Cut to Underweight at Morgan Stanley; PT $183
• Newell Brands (NWL) Cut to Market Perform at Raymond James
• Owens Corning (OC) Cut to Equal-Weight at Barclays; PT $160
• Power Integrations (POWI) Cut to Underperform at Northland
• Primerica (PRI) Cut to Market Perform at Raymond James
• Rivian (RIVN) Cut to Equal-Weight at Barclays; PT $16
• Triumph Financial Inc (TFIN) Cut to Underweight at Piper Sandler
• Unity Software (U) Cut to Underperform at Macquarie
• VeriSign (VRSN) Cut to Sell at CFRA
• WP Carey (WPC) Cut to Market Perform at Raymond James
• XPO Inc (XPO) Cut to Underweight at Morgan Stanley; PT $80
• Initiations
• Atossa Therapeutics Inc (ATOS) Rated New Buy at HC Wainwright; PT $4
• Deckers Outdoor (DECK) Rated New Hold at Baptista Research; PT $887.50
• Evaxion Biotech (EVAX) ADRs Rated New Buy at HC Wainwright; PT $14
• Igc Pharma (IGC) Rated New Buy at Ascendiant Capital Markets; PT $2.75
• Impinj (PI) Rated New Sell at Hedgeye
• Johnson Controls (JCI) Rated New Outperform at Baptista Research
• Palmer Square Capital BDC (PSBD) Rated New Outperform at Oppenheimer
• Rated New Buy at Citi; PT $17
• Rated New Outperform at RBC; PT $17
• Rated New Overweight at JPMorgan
• SilverBow Resources (SBOW) Rated New Buy at Roth MKM; PT $41
• Tango Therapeutics (TNGX) Rated New Overweight at Piper Sandler; PT $18
• TKO (TKO) Rated New Buy at Jefferies; PT $120
• Trade Desk (TTD) Rated New Neutral at Seaport Global Securities
• Walmex (WALMEX* MM) ADRs Rated New Hold at Jefferies; PT $46.78

Data sources: Bloomberg, Reuters, CQG