Daily Game Plan

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

DATA/HEADLINES:   8:00ET Fed’s Bostic speaks; 9:10ET Fed’s Barkin speaks; 11:30ET US to sell $28 billion 2-year
FRNs; 2:00ET FOMC Meeting Minutes*; 1:00ET Treasury auctions $16 billion of 20-year bonds  

TODAY’S HIGHLIGHTS and News:  

• Elon Musk said that the first human implanted with Neuralink’s brain chip has made a full recovery
• Netanyahu said that Israel would not pay any price for the return of hostages still held in Gaza
  
• Biden administration canceled another $1.2 billion in student loans
• President Biden’s brother James will testify behind closed doors to a House of Representatives impeachment inquiry today
• Scientists have found a gigantic quasar, likely the single brightest object in the known universe
  

World shares are mixed as traders braced for a key earnings report from Nvidia, seen as a bellwether for the health of the global economy, and whether it can deliver
another blockbuster earnings beat. China’s stock exchanges tightened supervision on quantitative trading and restricted selling on the open and the close. In the commodity space, aluminum surged on speculation that a fresh wave of US sanctions against Russia
may target the metal, potentially disrupting supplies.       

EQUITIES: 
 

US equity futures are slipping for a third straight day as investors awaited minutes from the last Federal Reserve policy meeting, as well as earnings from Nvidia after the close. Nvidia
fell over 1% in pre-market trading after falling more than 4% yesterday as some traders took profit before the earnings results. The company is expected to post a more than three-fold surge in its fourth-quarter revenue on robust demand for its chips that
dominate the market for artificial intelligence. Palo Alto Networks plunged more than 20% after the cybersecurity firm cut its revenue forecasts. Amazon.com gained after replacing Walgreens in the Dow Jones Industrial Average, effective next week.    

Futures ahead of the bell: E-Mini S&P -0.3%, Nasdaq -0.6%, Russell 2000 -0.5%, DJI -0.2%    

In pre-market trading, Palo Alto Networks (PANW) slumped 23% after forecasting third-quarter billings below estimates, signaling cautious spending by businesses. Shares of other cybersecurity
companies such as Fortinet (FTNT),  Zscaler (ZS) and Crowdstrike Holdings (CRWD) fell between 6% and 9%. Renewable energy firm SolarEdge Technologies (SEDG) dropped 16% after it projected first-quarter revenue below analysts’ estimates. Walgreens Boots Alliance
fell 3% after the pharmacy chain operator lost its spot on the Dow Jones Industrial Average to Amazon. Community Health Systems (CYH) falls 14% after the hospital owner released results that disappointed. International Flavors & Fragrances (IFF) drops 7% after
providing a disappointing sales outlook. Intuitive Machines (LUNR) jumps 24% after giving an update on its lunar lander, Odysseus. Matterport (MTTR) falls 9% after giving first-quarter subscription and revenue guidance below estimates. RingCentral (RNG) falls
4% after a disappointing outlook. SolarEdge (SEDG) plunges 20% as the solar equipment maker’s first-quarter revenue forecast missed estimates. Teladoc Health (TDOC) slides 20% after the healthcare services company reported fourth-quarter revenue that was weaker
than expected. Wix.com (WIX) rises 5% as the web platform company’s fourth-quarter revenue edged past the average estimate of analysts.

European gauges are mostly lower amid disappointing earnings from some of the region’s biggest companies. The Stoxx Europe 600 index edged lower with healthcare and travel leading declines
while autos outperformed. Weak earnings from Glencore and Rio Tinto, the world’s biggest iron ore miner, weighed on the basic resources sub-index.  HSBC Holdings tumbled more than 7% after reporting an 80% plunge in fourth-quarter profit after taking unexpected
charges on holdings in a Chinese bank. Carrefour SA gained after the French grocer announced a share buy-back, even as quarterly sales disappointed. Stoxx 600 -0.2%, DAX +0.3%, CAC +0.1%, FTSE 100 -0.8%.  Autos +1.5%, Banks +1%, Retail +0.6%. Healthcare -1.1%,
Travel & Leisure -0.8%, Media -0.6%.

Asian stocks were broadly mixed. Chinese shares rose after policymakers took more steps to revive investor confidence, defying broader weakness in Asia following a tech-led retreat on
Wall Street. Hong Kong-listed Chinese firms jumped as much as 4% before paring gains. Property developers led the gains after banks ramped up funding help. The MSCI Asia Pacific Index erased earlier losses to finish slightly lower.  Chinese tech giants including
Tencent and Alibaba gained, while miners dragged on the index as iron ore extended declines amid concerns about demand outlook in China. Elsewhere, Japan’s exports rose 11.9% year on year in January, faster than estimates. Hang Seng Tech +2.7%, Hang Seng Index
+1.6%, CSI 300 +1.3%, Thailand +0.9%, Philippines +0.6%, Kospi -0.2%, Topix -0.2%, Taiwan -0.4%, Sensex -0.6%, ASX 200 -0.7%, Singapore -0.8%.

FIXED INCOME: 
 

Treasuries are slightly richer across the curve with gains led by front-end. Bunds lag as market digests German 10-year auction.  US Treasury yield curve steepened
overnight as 2yr yield is lower by 3bps and 10yr is 1bp lower around 4.26%. US session includes a 20-year bond auction and the January FOMC minutes.
Swaps traders currently see little chance of the Fed lowering borrowing costs before June.

METALS: 
   

Gold prices rose for the fifth consecutive session ahead of the release of Federal Reserve minutes, expected to offer insights into the timing of the central bank’s
move towards monetary easing. Spot gold +0.2%, silver +0.05%. 

ENERGY:  

Oil prices extended losses on growing expectations that cuts to US interest rates will take longer than thought outweighed ongoing concerns over attacks on shipping
in the Red Sea. But Houthi attacks on commercial vessels in the Red Sea and Bab al-Mandab strait have continued to stoke concerns over freight flows through the critical waterway. Drone and missile strikes have hit at least four vessels since last Friday.
US natural gas jumped after Chesapeake said it will lower production. Natural gas prices this month fell to an inflation-adjusted 30-year low, hurting producers who are selling at nominal prices as low as they were in the depths of the COVID-19 downturn. WTI
+0.02%, Brent is flat, US Nat Gas +10%, RBOB +0.5%.

CURRENCIES:   

The dollar fluctuated as investors awaited minutes from the Federal Reserve’s latest policy meeting for more evidence that the central bank will take its time to
cut interest rates. The euro is flat versus the dollar, after a five-day winning streak. The yen and Aussie$ gained slightly, supported by solid gains in Chinese stock indexes. Australia’s wage growth quickened last quarter, exceeding the RBA’s forecast peak
and reinforcing expectations the central bank will stand pat in March. US$ Index -0.02%, GBPUSD +0.02%, EURUSD +0.01%, USDJPY -0.03%, AUDUSD +0.15%, NZDUSD +0.3%.

Bitcoin -1.5%, Ethereum -2.3%.

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
• Allegion (ALLE) Raised to Buy at CFRA; PT $165
• Canada Nickel (CNC CN) Raised to Buy at Echelon Wealth; PT C$3.90
• COPT Defense Properties (CDP) Raised to Buy at Jefferies; PT $28
• Cresud (CRES AR) ADRs Raised to Buy at Allaria Ledesma y Cia; PT $14
• HomeTrust Banc (HTBI) Raised to Outperform at KBW; PT $32
• Norfolk Southern (NSC) Raised to Overweight at Barclays; PT $305
• Vertical Aerospace (EVTL) Raised to Buy at Canaccord; PT $1.50
• Downgrades
• Allegion (ALLE) Cut to Equal-Weight at Wells Fargo; PT $140
• Amplitude (AMPL) Cut to Sector Perform at Scotiabank; PT $12
• Discover Financial (DFS) Cut to Sector Perform at RBC; PT $140
• Cut to Peerperform at Wolfe
• Eli Lilly (LLY) Cut to Hold at DZ Bank; PT $820
• Fathom Digital Manufacturing C (FATH) Cut to Hold at Needham
• Home Depot (HD) Cut to Reduce at HSBC; PT $323
• MakeMyTrip (MMYT) Cut to Neutral at Macquarie; PT $60
• Masonite (DOOR) Cut to Hold at Stifel; PT $133
• Palo Alto Networks (PANW) Cut to Neutral at Rosenblatt Securities Inc
• Cut to Hold at Loop Capital; PT $300
• Cut to Neutral at Piper Sandler; PT $300
• Cut to Equal-Weight at Capital One; PT $302
• RAPT Therapeutics (RAPT) Cut to Market Perform at Leerink; PT $10
• Cut to Neutral at HC Wainwright
• Cut to Neutral at JPMorgan; PT $15
• Steven Madden (SHOO) Cut to Hold at Williams Trading; PT $44
• Vizio Holding (VZIO) Cut to Neutral at Roth MKM; PT $11.50
• Wendy’s (WEN) Cut to Neutral at JPMorgan; PT $19
• Initiations
• Alphabet (GOOGL) Rated New Buy at CMB International; PT $172.20
• AnaptysBio (ANAB) Rated New Buy at Stifel; PT $50
• Centerra Gold (CG CN) Rated New Outperform at BMO; PT C$10
• ChargePoint (CHPT) Rated New Buy at Benchmark; PT $4.25
• Confluent (CFLT) Rated New Buy at Stifel; PT $40
• CrossFirst Bankshares (CFB) Rated New Neutral at Janney Montgomery
• Dynatrace (DT) Rated New Overweight at Capital One; PT $64
• Guild Holdings (GHLD) Rated New Buy at BTIG; PT $18
• Keros Therapeutics (KROS) Rated New Outperform at William Blair
• Meta Platforms (META) Rated New Buy at CMB International; PT $547.60
• Regenxbio (RGNX) Resumed Outperform at Raymond James; PT $45
• Sabre (SABR) Rated New Overweight at Cantor; PT $5
• Spruce Bio (SPRB) Rated New Buy at Guggenheim; PT $10
• UiPath (PATH) Rated New Sector Perform at Scotiabank
• World Kinect Corp (WKC) Rated New Neutral at JPMorgan; PT $25

Data sources: Bloomberg, Reuters, CQG