Daily Game Plan

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

DATA/HEADLINES:    8:30ET Philadelphia Fed Non-Manufacturing Activity; 10:00ET Leading Index

TODAY’S HIGHLIGHTS and News:  

• Nvidia, Amazon, Meta and Microsoft combined attribute for ~60% of the S&P 500’s year-to-date rally
• Ukrainian officials say Russia has been using thousands of Starlink terminals on the front lines
  
• US proposed a UN Security Council resolution warning against an Israeli assault on Rafah
  

Global shares fluctuated as a cautious mood spread through global markets and as investors in the US return from a holiday. China cut the benchmark mortgage rate
(5yr loan prime rate) by 25bps as authorities seek to support the property market along with the broader economy. Hamas chief Ismail Haniyeh has arrived in Cairo for talks with Egyptian officials, the militant group said, days after mediators said prospects
for a new truce with Israel had dimmed. Taiwan on Tuesday drove away a Chinese coast guard boat that entered waters near its sensitive frontline islands, a day after China’s coast guard boarded a Taiwanese tourist boat. Investors will next turn their attention
to the US Federal Reserve’s meeting minutes due tomorrow.      

EQUITIES: 
 

US equity futures slipped as investors looked to big retailer earnings to provide insight into consumer resilience amid doubts about the odds of a “soft landing”. Walmart delivered softer
guidance for the current fiscal year, as it expects consumers to be selective in their spending. Vizio jumped pre-market after Walmart said it will buy the firm for $11.50 per share in cash.  Nvidia declined ahead of the bell, as investors await its widely
anticipated earnings report due Wednesday. In corporate news, Discover Financial Services surged after Capital One Financial Corp. agreed to buy the credit card issuer. 

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

In pre-market trading, Walmart (WMT) rose ~3% after earnings beat, even though it delivered softer guidance. Home Depot (HD) declined over 2% after reporting a fifth consecutive drop
in quarterly revenue. Discover Financial (DFS) soars 15% after Capital One said it will acquire the company in an all-stock transaction valued at $35 billion. Capital One (COF) slips 3%. GlobalFoundries (GFS) gains 7% as the US plans to award $1.5 billion
to the largest domestic maker of made-to-order semiconductors under the so-called Chips Act grant. Intel (INTC) rises 3% after Bloomberg reported that the Biden administration is in talks to give more than $10 billion in subsidies to the chipmaker. Iovance
Biotherapeutics (IOVA) rallies 21% as analysts boost their price targets on optimism for the drug developer’s newly approved treatment for patients with advanced melanoma. Medtronic (MDT) climbed 3.8% after the medial device maker boosted sales.

European gauges recover from early losses in muted trading while euro zone wage data did little to move markets. Data from the ECB showed the annual growth in wages across the euro area
slowed to 4.5% in the final quarter of 2023, down slightly from a record high of 4.7% in the third quarter. BOE’s Andrew Bailey said inflation does not need to fall to the 2% target before policymakers back a rate cut and that market bets for three rate cuts
in 2024 are “not unreasonable.”  The Stoxx Europe 600 index is struggling to extend a four day winning streak that took it to within two points of its January 2022 record high on Monday. The chemicals sub-sector outperformed, with Air Liquide SA jumping more
than 4% after the French gas producer beat analysts’ expectations for margin expansion. Barclays Plc soared as much as 6% after announcing plans for capital returns. Evolution AB climbed almost 5% after US regulators terminated a probe into the Swedish online
gambling firm.  Sandoz Group AG tumbled more than 7% after Morgan Stanley downgraded the Swiss pharmaceutical company.   Stoxx 600 +0.02%, DAX -0.1%, CAC +0.3%, FTSE 100 +0.2%. Chemicals +2.1%, Travel & Leisure +1.3%, Utilities +0.9%. Technology -1%, Basic
Resources -1%.

Asian stocks were mixed as a reduction in China’s mortgage reference rate failed to boost investor sentiment in the region. The MSCI Asia Pacific Index pared a drop of 0.4% to settle
little changed, with consumer discretionary declining by the most, while utilities gained. China’s benchmark CSI 300 closed higher after spending most of the session in the red as traders took some relief from a decision by the nation’s lenders to cut a key
mortgage reference rate by the most on record today. Meanwhile, China’s Ministry of Housing said that 214 cities across the country have set up real estate financing coordination mechanisms so far this year, a major move to stabilize the housing market. Philippines
+0.8%, Taiwan +0.6%, Hang Seng Index +0.6%, Sensex +0.5%, Shanghai Comp +0.4%, CSI 300 +0.2%, ASX 200 -0.1%, Topix -0.3%, Kospi -0.8%.

FIXED INCOME: 
 

Treasuries are mixed with the curve steeper as front-end yields drop around 2.5bp vs Friday close while long-end trades slightly cheaper on the day. Core European
rates outperform, led by front-end of UK curve after Bank of England Governor Andrew Bailey said inflation doesn’t need to fall to target before policymakers start lowering interest rates. US 2s10s, 5s30s spreads are steeper by ~2bp on the day with 10-year
yield around 4.28%, little changed.

METALS: 
   

Gold is higher for a fourth straight day as traders counted down to the release of Federal Reserve minutes tomorrow and commentary from US central bankers that will
shape expectations for interest rates. A handful of Fed officials are also scheduled to speak this week. Among them, Minneapolis Fed chief Neel Kashkari addresses economic trends and the outlook on Thursday. Kashkari said earlier this month officials would
like to see “a few more months” of data before reducing rates but added that two to three cuts will likely be appropriate for 2024. Elsewhere, Gold shipments from Europe’s key refining hub jumped 92% in January as sales to China and Hong Kong increased. Spot
Gold +0.5%, Silver +0.2%.

ENERGY:  

Oil slipped from near the highest level in over three months as tensions in the Red Sea continue to simmer.  The price difference between monthly contracts has been
widening, indicating a more robust outlook in parts of the physical market. Global oil demand rose by more than 500,000 barrels per day (bpd) in December from November, for the eighth monthly record in 2023, the latest data by JODI showed on Tuesday. Rising
demand in Asia more than offset declines in the United States and Europe. Russia met its target for crude-export cuts in January, complying with its pledge to allies in OPEC+, according to data from the country’s Energy Ministry.   WTI -1.1%, Brent -0.8%,
US Nat Gas -1.2%, RBOB -1.6%.

CURRENCIES:   

In currency markets, the dollar eased versus G-10 peers, although it’s holding above 150 yen for a sixth day, as investors grew less certain Japan’s era of ultra-low
rates will end any time soon given the country is in recession. Japanese finance minister Shunichi Suzuki said on Tuesday authorities were “closely watching FX moves with a high sense of urgency.”  US$ Index -0.2%, GBPUSD +0.2%, EURUSD +0.25%, USDJPY -0.02%,
AUDUSD +0.4%, NZDUSD +0.4%.

Bitcoin +0.8%, Ethereum -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
• Alaska Air (ALK) Raised to Buy at Deutsche Bank; PT $51
• ASML (ASML NA) ADRs Raised to Neutral at Redburn; PT $900
• AvalonBay (AVB) Raised to Overweight at Barclays; PT $204
• Ball (BALL) Raised to Outperform at RBC; PT $74
• Bradesco (BBDC4 BZ) ADRs Raised to Neutral at Goldman; PT $2.80
• Brunswick (BC) Raised to Buy at B Riley; PT $108
• Canadian Western Bank (CWB CN) Raised to Sector Outperform at Scotiabank
• CIBC (CM CN) Raised to Sector Outperform at Scotiabank; PT C$67
• Dada Nexus (DADA) ADRs Raised to Buy at Daiwa; PT $3.50
• DT Midstream (DTM) Raised to Peerperform at Wolfe
• Equinor (EQNR NO) ADRs Raised to Equal-Weight at Morgan Stanley; PT $28.50
• Freshworks (FRSH) Raised to Outperform at Wolfe; PT $27
• JetBlue (JBLU) Raised to Buy at Deutsche Bank; PT $9
• Southwest Air (LUV) Raised to Buy at Deutsche Bank; PT $42
• Uber (UBER) Raised to Buy at Citic Securities; PT $90
• US Foods Holding (USFD) Raised to Overweight at Piper Sandler; PT $59
• Downgrades
• Airbnb (ABNB) Cut to Neutral at Phillip Secs; PT $150
• Apple (AAPL) Cut to Neutral at Phillip Secs
• Camden Property (CPT) Cut to Equal-Weight at Barclays; PT $100
• Canadian Tire (CTC/A CN) Cut to Market Perform at BMO; PT C$150
• Caterpillar (CAT) Cut to Inline at Evercore ISI; PT $338
• Couchbase (BASE) Cut to Equal-Weight at Barclays
• CymaBay (CBAY) Cut to Market Perform at Leerink; PT $32.50
• Eagle Bulk (EGLE) Cut to Hold at Cleaves Securities; PT $57
• Entegris (ENTG) Cut to Neutral at Mizuho Securities; PT $140
• Granite Point Mortgage (GPMT) Cut to Market Perform at JMP
• Healthcare Realty Trust (HR) Cut to Neutral at Wedbush; PT $15
• Cut to Hold at Stifel; PT $15
• Holley (HLLY) Cut to Neutral at JPMorgan; PT $5
• Hudson Pacific (HPP) Cut to Neutral at Wedbush; PT $7.50
• Ingersoll Rand (IR) Cut to Inline at Evercore ISI; PT $89
• MSCI (MSCI) Cut to Sell at Redburn; PT $470
• NuStar Energy (NS) Cut to Market Perform at Raymond James
• Prelude Therapeutics (PRLD) Cut to Neutral at HC Wainwright
• Sandstorm Gold (SSL CN) Cut to Neutral at CIBC; PT C$8
• SSR Mining (SSRM CN) Cut to Underperform at RBC; PT C$4.05
• Sunoco (SUN) Cut to Hold at Stifel; PT $62
• Tesla (TSLA) Cut to Neutral at Phillip Secs; PT $175
• Timken (TKR) Cut to Inline at Evercore ISI; PT $84
• TreeHouse (THS) Cut to Hold at Truist Secs; PT $35
• UDR (UDR) Cut to Equal-Weight at Barclays; PT $37
• WW Grainger (GWW) Cut to Hold at Loop Capital; PT $1,000
• Initiations
• AGNC Investment (AGNC) Rated New Buy at Compass Point; PT $10.25
• Alphabet (GOOGL) Rated New Accumulate at Guosheng Securities
• AMD (AMD) Rated New Buy at President Capital Management; PT $209
• Rated New Buy at Guosheng Securities
• Apple (AAPL) Rated New Hold at Guosheng Securities
• ArriVent Biopharma (AVBP) Rated New Buy at Goldman; PT $27
• Rated New Buy at Jefferies; PT $35
• Rated New Buy at Citi; PT $30
• Biote (BTMD) Rated New Buy at B Riley; PT $9
• Booking (BKNG) Rated New Buy at Seaport Global Securities; PT $4,380
• BrightSpring Health Services (BTSG) Rated New Outperform at Leerink
• Rated New Buy at Guggenheim; PT $15
• Rated New Overweight at Wells Fargo
• US Rated New Overweight at Morgan Stanley; PT $18
• Rated New Buy at Goldman; PT $26
• Rated New Buy at Jefferies; PT $18
• CG oncology (CGON) Rated New Outperform at LifeSci Capital; PT $86
• Rated New Overweight at Cantor; PT $75
• Rated New Neutral at Goldman; PT $42
• Rated New Overweight at Morgan Stanley; PT $55
• Crown Holdings (CCK) Rated New Buy at Baptista Research; PT $93.10
• Dyne Therapeutics (DYN) Rated New Buy at HC Wainwright; PT $36
• Engene Holdings (ENGN) Rated New Outperform at Leerink; PT $31
• EQB Inc (EQB CN) Rated New Buy at Veritas Investment Research Co; PT C$97
• Galaxy Digital (GLXY CN) Rated New Buy at Canaccord; PT C$17
• Immunovant (IMVT) Rated New Overweight at JPMorgan; PT $51
• Intel (INTC) Rated New Buy at Citic Securities; PT $55
• Morgan Stanley Direct Lending Fund (MSDL) US Rated New Outperform at Raymond James; PT $22
• US Rated New Equal-Weight at Wells Fargo; PT $21
• Rated New Neutral at JPMorgan
• US Rated New Market Perform at KBW; PT $21
• Rated New Outperform at RBC
• Nuveen Churchill Direct Lending (NCDL) Rated New Buy at Truist Secs
• US Rated New Equal-Weight at Wells Fargo; PT $18
• Rated New Market Perform at JMP
• Rated New Market Perform at KBW
• Nvidia (NVDA) Rated New Buy at Guosheng Securities
• Spotify (SPOT) Rated New Hold at Baptista Research; PT $259.30

Data sources: Bloomberg, Reuters, CQG