Daily Game Plan

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

DATA/HEADLINES:  8:30ET Durable Goods Orders, Cap Goods Orders; 9:00ET House Price Purchase Index,
FHFA House Price Index MoM; 9:05ET Fed’s Barr speaks; 10:00ET Conf. Board Consumer Confidence, Richmond Fed Manufact. Index, Richmond Fed Business Conditions; 10:30ET Dallas Fed
Services Activity; 11:30ET Biden meets with congressional leaders; 1:00ET  7-Year Note Auction

TODAY’S HIGHLIGHTS and News:  

• Biden says Israel is ready for a ceasefire, Hamas says remarks were premature, “still big gaps”
• Japan’s new births fall for an eighth straight year to record low
  
• Macy’s to Close 150 Namesake Stores
  

Global equity markets fluctuated as investors weighed up the outlook for central bank rate cuts, ahead of key US and European inflation data later in the week. The
global economy has a growing chance of pulling off a soft landing, finance chiefs said in a draft of the G-20’s closing statement at this week’s meeting in Brazil, although citing faster-than-expected disinflation as one of the risks. President Biden said
late Monday night that Israel has agreed to halt military activities in Gaza for the Muslim holy month of Ramadan. Hamas officials said there are “still big gaps to be bridged” and the president’s remarks were premature. Hamas is studying a proposal that includes
a 40-day military pause and the exchange of Palestinian prisoners for Israeli hostages at a ratio of 10 to one.       

EQUITIES: 
 

US equity futures nudged higher as investors awaited a crucial inflation report and other economic data this week that could shape expectations for interest rate cuts. KC Fed President
Schmid said the Fed should be patient in cutting interest rates with inflation above its 2% target and with the job market still strong. Macy’s (M) said it plans to close 150 unproductive locations as the department-store chain seeks to fight off a pair of
activist firms seeking to buy the company.

Futures ahead of the bell: E-Mini S&P +0.01%, Nasdaq +0.1%, Russell 2000 +0.7%, DJI -0.1%  

In pre-market trading, Zoom Video Communications (ZM) jumped 13% as the video-conferencing provider posted better-than-expected quarterly results. Janux Therapeutics (JANX) jumps 106%
after the company reported updated clinical data.  Aaron’s (AAN) slumps 25% after providing disappointing 2024 forecasts. Altice USA (ATUS) gains 4% after Bloomberg reported that Charter Communications is exploring a takeover of the cable provider. Cava (CAVA)
rises 7% after the restaurant chain posted fourth-quarter sales that beat expectations. Cryptocurrency-linked stocks rise after Bitcoin’s price reached the $57,000 level for the first time since late 2021. Cleanspark (CLSK) +16%, Coinbase (COIN) +6, Marathon
Digital (MARA) +12%. Hims & Hers Health (HIMS) soars 18% after the telehealth group’s forecast for first-quarter revenue topped the average analyst estimate. Intuitive Machines (LUNR) slumps 22%, extending Monday’s declines linked to concerns that the spacecraft
company’s lander, which touched down on the moon last week, likely landed on its side. PubMatic (PUBM) rises 27% after the advertising technology company’s fourth-quarter earnings beat expectations. TransMedics (TMDX) gains 21% after the transplant therapy
biotechnology company reported fourth-quarter revenue that beat estimates. Unity Software (U) slides 14% after the video-game software development company’s forecast for revenue fell short of expectations amid a portfolio review that includes exiting some
businesses.

European stock indexes are higher, led by shares in Germany. Investors continue to pile into the largest stocks by market value and those with the strongest balance sheets, while leaving
more risky companies behind. The Stoxx Europe 600 Index is up less than 0.1% with basic resources, autos and REITs outperforming, while healthcare and media decline. Eurofins Scientific SE dropped even as its outlook for 2024 suggests its Ebitda margin will
improve. On the Beach Group Plc surged after the online retailer of package holidays agreed to a long-term distribution partnership with Ryanair Holdings, ending a spat between the two companies. Stoxx 600 +0.03%, DAX +0.7%, CAC +0.2%, FTSE 100 +0.05%. Basic
Resources +1.7%, REITs +0.8%, Autos +0.8%, Technology +0.7%. Media -1%, Healthcare -0.8%.

Asian stocks were mixed, though Chinese shares outperformed, led by tech companies. The MSCI Asia Pacific Index climbed 0.3%, with Li Auto, Alibaba and Sumitomo Mitsui among the top contributors.
Chinese shares in the mainland and Hong Kong reversed earlier weakness to close higher as electric vehicle and semiconductor makers stocks surged.  Artificial intelligence-related and chip stocks in China advanced as a regulator urges accelerating the technology’s
development. Investors will be watching for more support measures from the upcoming NPC meeting next week in China. Samsonite (+13.7%) is weighing its options following interest from suitors including buyout firms. Hang Seng Tech +3.2%, CSI 300 +1.2%, Vietnam
+1.1%, Hang Seng Index +0.9%, Sensex +0.4%, Topix +0.2%. Singapore -0.4%, Philippines -0.4%, Taiwan -0.5%, Kospi -0.8%.

FIXED INCOME: 
 

Treasuries are mixed after sliding Monday amid heavy corporate issuance and two note auctions. Supply remains the main theme, with $42 billion 7-year note auction
at 1pm and another heavy slate of new corporate bonds anticipated. Blue-chip companies in the US have sold a record $172 billion of bonds so far in February. Japan’s two-year bond yield climbed to the highest level since 2011 after stronger-than-expected inflation
data boosted bets the central bank will end its negative-interest-rate policy in coming months. US 10-year yields around 4.278%, relatively flat on the day. 2/10 curve steepens by 4bps.     

METALS: 
   

Gold steadied near a two-week high as the market waited for more clues on when the Fed will start cutting interest rates. Expectations for a rate cut by the US central
bank have been delayed, with investors now foreseeing minimal chances of a reduction until June. Bullion has traded in a narrow range so far this week ahead of the Fed’s favored inflation gauge due Thursday. Spot gold +0.3%, silver +0.7%.  

ENERGY:  

Oil prices struggled for direction as investors weighed the prospects for a Gaza ceasefire. President Biden said that he hopes a cease-fire between Israel and Hamas
could take effect by early next week, pausing hostilities and allowing for the release of remaining hostages. News reports said Russian Prime Minister Mikhail Mishustin approved a six-month ban on gasoline exports beginning March 1. Meanwhile, there “are suggestions
that China has been buying crude cargoes at an accelerated pace since the mid-February holiday. WTI +0.01%, Brent -0.07%, US Nat Gas -0.5%, RBOB +0.5%.

CURRENCIES:   

Currencies trade in a tight range as investors align expectations of Fed rate cuts closer to guidance from policymakers. Federal Reserve Bank of Kansas City President
Jeffrey R. Schmid said the US central bank should be patient in cutting interest rates with inflation above its 2% target and the job market still strong. The Japanese yen strengthened against the dollar, recovering from a three-month low after Japan’s core
consumer inflation beat forecasts, reinforcing expectations that the central bank will end negative rates by April. New Zealand two-year interest rate swaps fell for a second day ahead of Reserve Bank policy meeting on Wednesday. Yuan’s one-month implied volatility
slumps to the lowest level since 2017, implying limited expected swings in the currency ahead of next week’s NPC meeting. US$ Index -0.1%, GBPUSD -0.1%, EURUSD ~flat, USDJPY -0.3%, AUDUSD +0.2%, NZDUSD -0.1%. 

Bitcoin +4.4%, Ethereum +2.7%. Bitcoin climbed, rising briefly beyond $57,000 for the first time since late 2021, supported by investor demand through exchange-traded
funds as well as further purchases by MicroStrategy Inc. Bitcoin ETF inflows soar driven by surge in Fidelity’s FBTC as GBTC outflows grind to a halt.

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
• Huntington Bancshares (HBAN) Raised to Buy at DA Davidson; PT $15.50
• Itron (ITRI) Raised to Outperform at Baird; PT $108
• Kroger (KR) Raised to Equal-Weight at Wells Fargo; PT $50
• Safe Bulkers (SB) Raised to Buy at Jefferies; PT $6
• Sprouts Farmers (SFM) Raised to Buy at BofA; PT $70
• Suzano (SUZB3 BZ) ADRs Raised to Buy at Brasil Plural; PT $14.30
• Unity Software (U) Raised to Neutral at Piper Sandler; PT $30
• Downgrades
• Agiliti (AGTI) Cut to Hold at Jefferies; PT $10
• Capital Product (CPLP) Cut to Hold at Jefferies; PT $18
• Comerica (CMA) Cut to Neutral at DA Davidson; PT $56
• Domino’s Pizza (DPZ) Cut to Neutral at JPMorgan; PT $430
• Employers Holdings (EIG) Cut to Neutral at Janney Montgomery; PT $50
• PPG Industries (PPG) Cut to Equal-Weight at Barclays; PT $149
• RCM (RCM) Cut to Hold at Deutsche Bank; PT $15
• Roku (ROKU) Cut to Underweight at Wells Fargo; PT $51
• Sunnova Energy (NOVA) Cut to Neutral at Janney Montgomery
• Sunoco (SUN) Cut to Neutral at Citi; PT $65
• Sunrun (RUN) Cut to Neutral at Janney Montgomery; PT $13
• Unilever (ULVR LN) ADRs Cut to Underweight at Morgan Stanley; PT $48
• Vizio Holding (VZIO) Cut to Equal-Weight at Wells Fargo; PT $11.50
• Initiations
• AltaGas (ALA CN) Rated New Buy at Jefferies; PT C$34
• Alto Neuroscience (ANRO) Rated New Outperform at William Blair
• Rated New Outperform at Cowen
• Rated New Buy at Stifel; PT $32
• Rated New Outperform at Baird; PT $32
• Rated New Buy at Jefferies; PT $33
• Amer Sports (AS) Rated New Outperform at CICC; PT $20.07
• ARC Resources (ARX CN) Rated New Buy at Jefferies; PT C$28
• Beyond Inc (BYON) Rated New Buy at Hedgeye
• Brookfield Infrastructure (BIP) Rated New Buy at Jefferies; PT $37
• Cable One (CABO) Reinstated Neutral at JPMorgan; PT $514
• Crescent Point Energy (CPG CN) Rated New Buy at Jefferies; PT C$12
• Duolingo (DUOL) Rated New Buy at Seaport Global Securities; PT $222
• Enbridge (ENB CN) Reinstated Buy at Jefferies; PT C$53
• Fractyl Health (GUTS) Rated New Overweight at Morgan Stanley; PT $18
• Gibson Energy (GEI CN) Rated New Buy at Jefferies; PT C$25
• Goldman Sachs (GS) Rated New Buy at Edward Jones
• Kaspi.kz (KSPI KZ) ADRs Rated New Positive at Susquehanna; PT $154
• Keyera (KEY CN) Reinstated Buy at Jefferies; PT C$38
• Korro Bio, Inc. (KRRO) Rated New Outperform at BMO; PT $120
• MEG Energy (MEG CN) Rated New Hold at Jefferies; PT C$28
• MicroStrategy (MSTR) Rated New Buy at Benchmark; PT $990
• New Stratus Energy Inc (NSE CN) Rated New Speculative Buy at Echelon Wealth; PT C$1.40
• NuVista Energy (NVA CN) Rated New Buy at Jefferies; PT C$13
• Open Text (OTEX CN) Rated New Buy at Jefferies; PT C$60.83
• Paramount Resources (POU CN) Rated New Buy at Jefferies; PT C$33
• Pembina Pipeline (PPL CN) Reinstated Buy at Jefferies; PT C$52
• Seagate (STX) Rated New Outperform at Evercore ISI; PT $110
• Strathcona Resources (SCR CN) Rated New Hold at Jefferies; PT C$26
• TAG Oil (TAO CN) Rated New Speculative Buy at Echelon Wealth; PT C$1.10
• TC Energy (TRP CN) Rated New Hold at Jefferies; PT C$57
• Tigo Energy (TYGO) Rated New Buy at HC Wainwright; PT $5
• Topaz Energy (TPZ CN) Rated New Buy at Jefferies; PT C$23
• Tourmaline Oil (TOU CN) Rated New Buy at Jefferies; PT C$70
• Veralto (VLTO) Rated New Outperform at BMO; PT $97
• Whitecap Resources (WCP CN) Rated New Buy at Jefferies; PT C$11

Data sources: Bloomberg, Reuters, CQG