Daily Game Plan

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

DATA/HEADLINES:   8:30ET Chicago Fed National Activity Index, Jobless Claims; 9:45ET S&P Global US Manufacturing
PMI/Services PMI; 10:00ET Existing Home Sales, Fed’s Jefferson speaks; 1:00ET 30 Year TIPS auction; 3:15ET Fed’s Harker speaks;  5:00ET Fed’s Cook, Kashkari speak

TODAY’S HIGHLIGHTS and News:  

• GLOBAL DEBT RISES TO NEW RECORD HIGH AT $313 TRILLION IN 2023 -IIF
• Nvidia Expects to Compete for Business in China and Serve the Market Successfully
• Several major cell phone companies are experiencing outages
  
• Google will pause Gemini’s image generation of people after issues
  
• Joe Biden called Vladimir Putin a “crazy SOB”
  

Global stocks rose as unexpectedly strong revenue forecasts from US chip giant Nvidia lifted sentiment around the world. European shares rose to a record high and
Japan’s blue-chip Nikkei index also hit an all-time high for the first time since 1989. The Nikkei has jumped nearly 17% already this year. In Europe, the euro zone’s services sector climbed out of contractionary territory for the first time since July as
the Eurozone composite PMI rose to its highest since May 2023 at 53.3.  French services PMI rises while German manufacturing PMI falls to 42.3, below the forecast of 46.  UK PMI and Euro-Zone PMI’s were slightly softer.  Meanwhile, two missiles were fired
at a vessel off the southeast coast of Yemen on Thursday, as Houthis continue attacks on shipping to show support for the Palestinians in the Gaza war.

EQUITIES:
 

US equity futures are higher after Nvidia Corp.’s blowout sales forecast fanned gains in tech stocks around the world and propelling Nasdaq 100 futures to a 2% gain in early trading.
Nvidia soared as much as 14% post-market after results showed demand is exploding for artificial intelligence computing hardware. The company, which is on the verge of surpassing Alphabet in market value, has been the biggest driver of US stock market gains
this year. Analysts noted that Nvidia is still less expensive than peers. The stock traded at about 30 times forward earnings as of yesterday’s close, compared with AMD at 43 times.    

Futures ahead of the bell: E-Mini S&P +1.3%, Nasdaq +2.1%, Russell 2000 +0.5%, DJI +0.5%   

In pre-market trading, Nvidia (NVDA) surges 13% after delivering another eye-popping sales forecast. Remitly (RELY) soars 24% after the money transfer firm provided a year revenue forecast
that topped estimates and a strong 4Q sales beat. Carnival (CCL) gains 5% as rival Royal Caribbean (RCL) +5% lifted its annual guidance. DigitalOcean (DOCN) jumps 9% after the provider of platform tools for start-ups posted 4Q revenue that beat estimates.
DoorDash (DASH) rises 4% as Morgan Stanley raises its rating, predicting robust growth. Enerplus (ERF) ADRs gain 9% after Chord agreed to buy the Canadian oil and gas company for $3.7 billion in stock and cash. Etsy (ETSY) falls 9% after the e-commerce company’s
outlook pointed to a slow start to the fiscal year. Indivior (INDV) ADRs jump 16% after the drugmaker reported upbeat results for the fourth quarter. Lucid Group (LCID) sinks 8% after the electric vehicle maker forecast production for 2024 disappointed. Rivian
(RIVN) falls 16% after it provided a disappointing forecast.  Moderna (MRNA) gains 3% after the company reported fourth-quarter revenue that beat analysts’ expectations by gaining Covid vaccine market share on its rival Pfizer. Vertiv (VRT) gains 5% with analysts
noting strong order numbers for the data center equipment company.

European gauges are higher with most benchmarks at or near all-time highs. Tech and auto shares led the advance in Europe, climbing more than 3% with the region’s biggest chipmaker, ASML
Holding NV, advancing as much as 5%. BE Semiconductor surged as much as 18% after fourth-quarter revenue rose 16%, snapping six quarters of falling sales. Mercedes-Benz Group AG jumped over 5% after the German carmaker’s gloomy earnings forecast was offset
by its plan for an accelerated $3.2 billion buyback.  Rolls Royce Holdings surged more than 8% after reporting higher-than-expected profit. Stocks pared gains as traders trimmed bets on rate cuts by the European Central Bank after data showed euro-area private-sector
activity hit an eight-month high. London’s FTSE was a notable laggard due to its lack of tech firepower.  The food and beverage sector lagged behind following a downbeat earnings report by Nestle SA.  Stoxx 600 +0.7%, DAX +1.3%, CAC +1%, FTSE 100 is roughly
flat. Technology +3%, Autos +2.8%, Insurance +1.6%, Travel +1%. Food & Bev -1.4%.

Asian stocks gained as Nvidia’s better-than-expected revenue forecast sparked a rally in tech shares, helping Japanese stocks to surge past a historic peak reached more than three decades
ago. The MSCI Asia Pacific Index rose 1.1% to its highest level since April 2022, with Nvidia suppliers such as TSMC and SK Hynix among the biggest boosts. Chinese stocks extended their gains into an eighth session, with the CSI 300 Index capping its longest
run of gains since July 2020.  Nikkei 225 +2.2%, Hang Seng Index +1.4%, Shanghai Composite +1.3%, Taiwan +0.9%, CSI 300 +0.9%, Sensex +0.7%, Kospi +0.4%, ASX 200 +0.05%. Vietnam -0.2%.

FIXED INCOME:
 

Treasuries are narrowly mixed with the long-end barely outperforming, flattening 2s10s and 5s30s spreads. Core European rates are choppy following a round of services
and manufacturing PMI’s data. US session focus includes jobless claims and PMI data, along with a busy Fed speaker slate.  Also, a $9b 30-year TIPS auction is scheduled for 1pm. 10-year yield ~4.34%, 2-year around 4.7%.

METALS:
   

Gold traded in a narrow range as traders look for fresh drivers after Federal Reserve minutes indicated policymakers seem content to leave interest rates higher until
they’re sure inflation will keep cooling. Despite the hawkish Fed signals, gold prices are holding above $2,000, supported by safe-haven demand amid ongoing geopolitical risk in Ukraine and the Middle East. Spot gold +0.1%, silver +0.5%.    

ENERGY:

Oil prices fluctuated as a rise in US crude inventories tempered gains buoyed by expectations that demand in the US will improve as refineries try to return to service
after outages. Crude inventories have climbed amid outages at large refineries that have left utilization rates at the lowest level in two years. US crude inventories surged by 7.2 million barrels last week, API data showed. That would take total holdings
to the highest since November if confirmed by the EIA today. WTI -0.2%, Brent -0.15%, US Nat Gas -3.5%, RBOB -0.6%.

CURRENCIES:

In currency markets, the dollar slipped to its weakest in nearly three weeks as Nvidia Corp.’s revenue beat boosted risk sentiment, damping the demand for haven assets.
The euro rallied after surprisingly strong PMI data prompted traders to scale back bets for interest rate cuts by the European Central Bank this year. Investors await US PMI readings and speeches by a chorus of Federal Reserve speakers later in the day for
any hints into the timing and scope of US monetary easing. Sterling rose as much as 0.6% versus the dollar, supported by a slight rise in UK PMI and gained for the third straight day as volatility in the pair continue to fall to its lowest in two years.  US$
Index -0.2%, GBPUSD +0.2%, EURUSD +0.2%, USDJPY +0.1%, AUDUSD +0.2%, NZDUSD +0.2%.  

Bitcoin +0.1%, Ethereum +0.6%.

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
  • AbCellera Biologics (ABCL) Raised to Buy at Benchmark; PT $9
  • American Woodmark (AMWD) Raised to Outperform at Baird; PT $120
  • Caret Holdings Inc (ROOT) Raised to Overweight at Cantor; PT $13
  • Coty (COTY) Raised to Outperform at Cowen; PT $16
  • DoorDash (DASH) Raised to Overweight at Morgan Stanley; PT $145
  • European Residential REIT (ERE-U CN) Raised to Buy at Echelon Wealth
  • First Quantum Minerals (FM CN) Raised to Buy at Jefferies; PT C$18
  • Gates Industrial (GTES) Raised to Overweight at KeyBanc; PT $18
  • Graphic Packaging (GPK) Raised to Outperform at Raymond James; PT $32
  • Martin Marietta (MLM) Raised to Hold at HSBC; PT $543
  • Mosaic (MOS) Raised to Sector Outperform at Scotiabank; PT $40
  • Remitly (RELY) Raised to Outperform at BMO; PT $28
  • YPF (YPFD AR) ADRs Raised to Buy at UBS; PT $27
• Downgrades
  • Antero Resources (AR) Cut to Hold at Benchmark
  • Capital One (COF) Cut to Inline at Evercore ISI; PT $142
    • Cut to Hold at Edward Jones
  • Gilead (GILD) Cut to Hold at Truist Secs; PT $82
  • Hexcel (HXL) Cut to Underweight at Morgan Stanley; PT $66
  • Jackson Financial (JXN) Cut to Hold at Jefferies; PT $55
  • Lucid (LCID) Cut to Underweight at Cantor; PT $4
  • Wendy’s (WEN) Cut to Market Perform at Bernstein; PT $20
• Initiations
  • AGF Management (AGF/B CN) Rated New Buy at Jefferies; PT C$9
  • Amazon (AMZN) Rated New Buy at CMB International; PT $213
  • Apartment Income REIT (AIRC) Reinstated Neutral at Goldman; PT $34
  • Applied Therapeutics (APLT) Rated New Outperform at Leerink; PT $12
  • AvalonBay (AVB) Reinstated Neutral at Goldman; PT $191
  • Camden Property (CPT) Reinstated Buy at Goldman; PT $112
  • Celcuity (CELC) Rated New Buy at Stifel; PT $40
  • CI Financial (CIX CN) Rated New Buy at Jefferies; PT C$19
  • Equity Residential (EQR) Reinstated Buy at Goldman; PT $70
  • Essex Property (ESS) Reinstated Sell at Goldman; PT $227
  • IGM Financial (IGM CN) Rated New Hold at Jefferies; PT C$37
  • Microsoft (MSFT) Rated New Buy at CMB International; PT $473.60
  • Mid-America (MAA) Reinstated Buy at Goldman; PT $149
  • New Oriental Education (EDU) ADRs Rated New Buy at CMB International
  • Spotify (SPOT) Rated New Buy at China Merchants; PT $312
  • Tencent Music (TME) ADRs Rated New Buy at China Merchants; PT $13
  • UDR (UDR) Reinstated Neutral at Goldman; PT $39
  • USA Compression Partners (USAC) Rated New Outperform at Raymond James
  • Whirlpool (WHR) Rated New Buy at Loop Capital; PT $140

Data sources: Bloomberg, Reuters, CQG