Daily Game Plan

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

DATA/HEADLINES:  no data or Fed speakers are due for today 

TODAY’S HIGHLIGHTS and News:  

• Israeli war cabinet sending the negotiations team to Paris today for talks on a new hostages deal
  
• ISRAEL PROPOSES PLAN FOR COMPLETE POSTWAR CONTROL OF GAZA: FT
  
• The White House has issued sanctions against Russia for the death Alexei Navalny
• Intuitive Machines landed a spacecraft on the moon on Thursday, the first US touchdown in more than 50 years and the first ever by the private sector
• Weight-loss drugs could boost US GDP by 1% in coming years, Goldman says
  

Global shares took a breather as investors assessed the outlook for equities after benchmarks from the US to Europe and Japan hit all-time highs in the wake of Nvidia’s
blockbuster earnings. Three top Fed officials stressed on Thursday that the US central bank is still on track to cut interest rates this year but said more evidence of disinflation is needed. FED’s Waller said January’s jump in CPI warrants caution in deciding
when to start cutting interest rates. ECB’s Nagal said the Bank should not be lured into cutting rates as there is insufficient evidence at present that inflation is under control. Global equity returns should broaden, though stock performance in 2024 is likely
to be about earnings delivery, according to Citigroup strategists.  In other news, Israel‘s war cabinet approved sending negotiators to truce talks taking place in Paris today as pressure mounts in the Middle East.   

EQUITIES: 
 

US equity futures are little changed after the Dow and S&P500 settled at record highs, with the Nasdaq 100 within striking distance of its all-time high. The S&P 500 advanced more than
2% on Thursday as investors cheered blowout results from Nvidia Corp., but only 73% of its members advanced.  Nvidia’s $277 billion one-day boost to its market capitalization on Thursday was the biggest single-session increase in value ever. The US is back
on the moon. Robotic spacecraft Odysseus became the first private machine to touch down on the lunar surface intact, where it will scout the environment ahead of plans for a crewed mission.    

Futures ahead of the bell: E-Mini S&P +0.1%, Nasdaq is flat, Russell 2000 -0.2%, DJI +0.1%  

In pre-market trading, Intuitive Machines (LUNR) soars 43% after a lander from the commercial space startup touched down on the moon on Thursday. Applied Optoelectronics (AAOI) sinks
37% after the maker of fiber-optic networking products posted a surprise drop in revenue in the fourth quarter. Block Inc. (SQ) rallies 16% after the payments technology company raised its forecast for 2024. Booking Holdings (BKNG) slips 8% after giving a
disappointing forecast for travel reservations and gross bookings, with the war in Israel and currency fluctuations weighing on results. Carvana (CVNA) soars 30% after the used-car retailer topped Wall Street’s profit expectations in the final months of 2023
and said it expects improved earnings this quarter. Fluence Energy (FLNC) advances 7% as JPMorgan raises its recommendation on the energy-storage company to overweight, saying Thursday’s selloff triggered by a short report was overdone. Maravai LifeSciences
(MRVI) climbs 30% after its revenue outlook for the year topped analyst estimates.  MercadoLibre (MELI) falls ~7% after recording earnings per share for the fourth quarter that fell short of estimates.

European gauges are steady to higher and on course for a fifth week of gains as optimism surrounding the boom in artificial intelligence applications buoyed equity sentiment around the
world. The Stoxx Europe 600 index edged higher amid mixed earnings, after closing at a record high on Thursday. UK-based lender Standard Chartered Plc climbed more than 8% after unveiling a profit beat and share buyback. German insurer Allianz SE declined
after non-life insurance earnings missed analysts’ expectations. Deutsche Telekom AG, Europe’s largest telecommunications operator, slipped after a miss in non-US earnings. European Central Bank member Isabel Schnabel said overnight that she was confident
that the eurozone is heading for a soft landing. Stoxx 600 +0.3%, DAX +0.05%, CAC +0.6%, FTSE 100 +0.05%. Autos +1%, Financial Services +0.6%, Chemicals +0.6%. Telecom -0.8%, Utilities -0.4%.

Asian stocks were mixed, but still saw a fifth straight week of gains as investors took heart from Beijing’s recent market rescue efforts, which have spurred a strong rebound in Chinese
shares. The MSCI Asia Pacific Index eked out a small gain with trading largely range bound as Japan was shut for a holiday. Sentiment has been upbeat in Asia as Chinese authorities took further steps to restore investor confidence, including restrictions on
equity net sales, stock purchases by state funds and a clampdown on quant trading. Mainland Chinese stocks as a result posted a ninth session of gains, the longest winning streak since 2018. Hong Kong edged closer to erasing losses this year. Shanghai Composite
+0.5%, ASX 200 +0.4%, Taiwan +0.2%, Kospi +0.1%, CSI 300 +0.1%. Sensex -0.02%, Hang Seng Index -0.1%, Singapore -1.2%, Vietnam -1.2%.

FIXED INCOME: 
 

The 10-year Treasury yield was steady after top Fed officials hammered home the message Thursday that the US central bank is still on track to cut interest rates
this year, just not anytime soon. Fed Gov. Chris Waller late Thursday said there was “no rush” to cut interest rates following stronger-than-expected inflation and economic data since the beginning of the year.  Goldman economists pushed back their view on
when the Fed will begin cutting rates to June from May. 2s10s spread is flatter by ~1.2bp on the day; 10-year yield stands at around 4.315%. Monday’s session sees a US double auction of 2- and 5-year notes for combined $127B.

METALS: 
   

Gold headed for a small weekly gain, as comments from a slew of Federal Reserve officials failed to clarify when the US central bank would pivot to monetary easing.
Gold also found support from the dollar’s first weekly loss this year. Meanwhile, investors in the world’s largest gold-backed exchange-traded fund — SPDR Gold Shares — offloaded holdings in the biggest one-day sell off since October.  Spot gold +0.2%, silver
-0.03%.  

ENERGY:  

Oil prices are lower and on track to end a two-week winning streak. Oil benchmarks pared some of their Thursday gains after Fed Gov Waller’s comments that policymakers
should delay interest rate cuts by at least another couple of months. Weak Chinese demand is weighing on crude prices, RBC said, adding that the growth in the country’s diesel inventories since the middle of 2023 is “a worry.”  Red Sea shipping delays and
OPEC+ supply cuts are tightening physical oil markets in Europe and Africa as well as the Brent crude market structure, lending further support to oil futures prices.  WTI -1.6%, Brent -1.5%, US Nat Gas -3.8%, RBOB -0.8%.

CURRENCIES:   

In currency markets, the dollar fluctuated, looking to snap a four-day losing streak as US Treasury yields rose and traders pared bets for US interest-rate cuts in
coming months. The dollar saw some support after Waller on Thursday said January’s jump in consumer prices warrants caution in deciding when to start cutting interest rates. That’s after Fed Vice Chair Philip Jefferson and Governor Lisa Cook made clear they
want more evidence that inflation is headed back to their 2% target before lowering borrowing costs.  US$ Index -0.05%, GBPUSD +0.2%, EURUSD +0.1%, USDJPY +0.01%, AUDUSD +0.3%.

Bitcoin -1.3%, Ethereum -1.7%.

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
• AXT (AXTI) Raised to Buy at B Riley; PT $3.80
• Block (SQ) Raised to Overweight at Wells Fargo; PT $95
• Raised to Buy at Seaport Global Securities; PT $95
• Carvana (CVNA) Raised to Market Perform at Raymond James
• Raised to Outperform at William Blair
• Cheniere Energy Partners (CQP) Raised to Hold at Stifel; PT $50
• DraftKings (DKNG) Raised to Overweight at Barclays; PT $50
• Fluence Energy (FLNC) Raised to Overweight at JPMorgan; PT $23
• Fox Corp (FOXA) Raised to Buy at Citi; PT $35
• Genmab (GMAB DC) ADRs Raised to Outperform at BMO; PT $48
• Huntsman (HUN) Raised to Overweight at Wells Fargo; PT $32
• Innergex Renewable Energy (INE CN) Raised to Sector Perform at Peters & Co; PT C$9
• Phillips Edison (PECO) Raised to Buy at Mizuho Securities
• Summit Materials (SUM) Raised to Overweight at JPMorgan; PT $47
• Downgrades
• Allegion (ALLE) Cut to Neutral at Mizuho Securities; PT $141
• Applied Opto (AAOI) Cut to Neutral at B Riley; PT $16
• Boeing (BA) Cut to Neutral at Northcoast
• Brighthouse Financial (BHF) Cut to Underweight at Morgan Stanley
• Brixmor Property (BRX) Cut to Neutral at Mizuho Securities
• Cascades (CAS CN) Cut to Sector Perform at RBC; PT C$14
• Exro Technologies (EXRO CN) Cut to Speculative Buy at Canaccord; PT C$1.20
• Huntsman (HUN) Cut to Sell at CFRA
• Johnson Controls (JCI) Cut to Neutral at Mizuho Securities; PT $62
• ModivCare Inc (MODV) Cut to Hold at Deutsche Bank; PT $40
• Cut to Hold at Jefferies; PT $39
• NIO Inc. (NIO) ADRs Cut to Underweight at JPMorgan; PT $5
• Nutrien (NTR CN) Cut to Underweight at JPMorgan; PT C$64.71
• Penumbra (PEN) Cut to Neutral at JPMorgan; PT $250
• Piedmont Lithium (PLL) Cut to Neutral at BTIG
• Pulmonx (LUNG) Cut to Equal-Weight at Wells Fargo; PT $14
• Rivian (RIVN) Cut to Sell at UBS; PT $8
• Initiations
• Adeia Inc (ADEA) Rated New Buy at Rosenblatt Securities Inc; PT $15
• BioNTech (BNTX) ADRs Rated New Outperform at BMO; PT $127
• Cantaloupe Inc (CTLP) Rated New Buy at Benchmark; PT $10
• Cemex (CEMEXCPO MM) ADRs Reinstated Outperform at BBVA; PT $8.60
• CPI Card (PMTS) Rated New Buy at Roth MKM; PT $40
• Element Fleet (EFN CN) Rated New Buy at Jefferies; PT C$27
• I3 Verticals (IIIV) Rated New Buy at Benchmark; PT $28
• Incyte (INCY) Reinstated Buy at Jefferies; PT $81
• Novartis (NOVN SW) ADRs Rated New Market Perform at BMO; PT $114
• Nuvalent (NUVL) Rated New Outperform at Baird; PT $105
• ORIC Pharma (ORIC) Rated New Overweight at Cantor
• Pfizer (PFE) Reinstated Buy at Guggenheim; PT $36
• Power of Canada (POW CN) Rated New Buy at Jefferies; PT C$43
• Quanta Services (PWR) Rated New Buy at William O’Neil

Data sources: Bloomberg, Reuters, CQG