Daily Game Plan

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

DATA/HEADLINES:  11:00ET Fed’s Harker speaks

TODAY’S HIGHLIGHTS and News:  

• US funding bill blocks China from buying oil from Strategic Petroleum Reserve
  
• Congressional leaders unveiled a $436B package to keep the government operating through Sept. 30
• Russia Accuses Germany Of Planning To Attack Its Territory – FT
  
• JetBlue Announces Termination of Merger Agreement With Spirit
  

World shares are mixed as investors braced for a week packed with central bank events and key economic data releases.  China’s National People’s Congress meeting
starting on Tuesday might flag new stimulus measures. China’s Li Qiang will become the first premier in three decades to not hold a press briefing at the annual parliamentary meetings, as President Xi Jinping consolidates control.  As the earnings season comes
to an end, investor focus turns to the timing of the first cut in interest rates in Europe and the US.  Fed Chair Jerome Powell testifies before lawmakers on Wednesday and Thursday ahead of the February employment report on Friday. In Europe, a UK budget on
Wednesday is followed by the ECB’s latest policy meeting on Thursday.  The Bank of Canada also meets this week.         

EQUITIES: 

US equity futures are mixed, with small cap Russell 2000 futures outperforming. S&P 500 and Nasdaq futures are trading slightly lower, having made record closing highs on Friday on upbeat
earnings and enthusiasm for all things AI. The S&P 500 made gains for 16 of the last 18 weeks, a run not seen since 1971. Apple slipped premarket after it was hit with a €1.8 billion EU penalty over an investigation into allegations it silenced music-streaming
rivals on its platforms. The big tech-led rally isn’t like other bubbles, Goldman Sachs said. It sees the Magnificent 7’s valuations as supported by their fundamentals. Nvidia claimed another milestone by overtaking Saudi Aramco in market value, making the
chipmaker the world’s third-most valuable public company after Apple and Microsoft. Spirit Airlines (SAVE) today announced that its merger agreement with JetBlue Airways Corporation has been terminated by mutual agreement.

Futures ahead of the bell: E-Mini S&P -0.15%, Nasdaq +0.05%, Russell 2000 +0.6%, DJI -0.4%  

In pre-market trading, chipmakers continued their ascent, with Western Digital, Micron Technology and Nvidia Corp. rising more than 2%. Akero Therapeutics (AKRO) climbs 35% after the
drug developer said a mid-stage study of its experimental treatment for a liver disease met additional histology endpoints.  Cryptocurrency-linked stocks rally after Bitcoin breached the $65,000 mark. Marathon Digital (MARA) +5.7%, Coinbase (COIN) +6.5%. Lyft
(LYFT) gains 7% after RBC speculates about a partnership between the ride-hailing service and food delivery firm DoorDash (DASH +3%). Macy’s (M) rises 18% after Arkhouse Management and Brigade Capital Management boosted their offer by 14%. Sea Ltd. (SE) climbed
12% after the company reported a smaller-than-expected drop in quarterly earnings and predicted improving prospects for its e-commerce and gaming businesses. Super Micro Computer (SMCI) jumps 16% and Deckers Outdoor (DECK) gains 4.6% after the pair were added
to the S&P 500 index in the latest quarterly weighting change.

European gauges are mixed after reaching a fresh record, with investors awaiting the European Central Bank’s meeting later this week for insights into monetary policy direction. The Stoxx
600 index reversed early gains, though the tech shares subindex outperformed, tracking Friday’s Wall Street gains. Among individual stocks, Delivery Hero SE rose after announcing the launch of a financing transaction to amend and extend its financing facilities.
Ferrari NV fell after being downgraded to sell from neutral at Citi. Shares in London underperform, with the FTSE 100 down 0.6%. Stoxx 600 -0.1%, DAX -0.03%, CAC +0.1%. Technology +1.1%, Energy and Healthcare +0.3%. Basic Resources -1.3%, Travel & Leisure
-1.2%, Retail -1%.

Asian stocks were mostly higher, lifted by the tech sector, as traders prepared for China’s key political meeting this week.  The MSCI Asia Pacific Index rose 0.4%. The world’s top chipmaker,
Taiwan Semiconductor Manufacturing Co., rose 5.2% to a record high. Japan’s Nikkei 225 closed above 40,000 for the first time, having risen for five straight weeks. An upbeat report on fourth quarter capex today suggested GDP could be revised to positive from
negative, meaning Japan was not in recession after all. China’s Premier Li Qiang will present a government report at the National People’s Congress on Tuesday, forecasting China’s 2024 growth target and detailing plans to bolster its economy. Taiwan’s TAIEX
Index gained ~2%, hitting a record high. Kospi +1.2%, Nikkei 225 +0.5%, Philippines +0.5%, Shanghai Composite +0.4%, Vietnam +0.2%, Sensex +0.1%, CSI 300 +0.1%, Hang Seng Index +0.05%. ASX 200 -0.1%, Singapore -0.4%, Indonesia -0.5%.

FIXED INCOME: 
 

Treasuries are cheaper across the curve, underperforming core European rates. Today’s session is expected to include at least 10 corporate bond offerings, while economic
data slate is empty.  Treasury yields cheaper by 2bp to 3bp across the curve with spreads broadly within 1bp of Friday’s close; 10-year yields around 4.215%. Syndicate desks are calling for roughly $30b of new IG sales this week and $130b in March.

METALS: 
   

Gold prices steadied at elevated levels following a nearly 2% surge on Friday, fueled by weaker-than-expected US economic data, prompting expectations of Federal
Reserve monetary easing. The precious metal is trading near its highest levels of the year, supported by disappointing factory data and a decline in consumer sentiment. Spot gold and silver are flat.

ENERGY:  

Oil prices were slightly lower following the widely expected extension of voluntary output cuts by OPEC+ on Sunday. OPEC+ members led by Saudi Arabia and Russia agreed
to extend voluntary oil output cuts of 2.2 million barrels per day into the second quarter. Russia will cut its oil output and exports by an additional 471,000 bpd in the second quarter.  A measure in the US funding legislation unveiled by congressional leaders
on Sunday would block China from buying oil from the Strategic Petroleum Reserve. The SPR currently holds more than 360 million barrels of oil but is close to 40-year lows. Meanwhile, Yemen’s Iran-backed Houthis vowed on Sunday to continue targeting British
ships in the Gulf of Aden following the sinking of a UK-owned vessel.  WTI -0.2%, Brent -0.1%, US Nat Gas +7.5%, RBOB -0.5%.

CURRENCIES:   

In currency markets, the dollar traded mixed and within tight ranges versus its major peers amid a thin data calendar. The Swiss franc rose after Swiss CPI data was
released but the move quickly faded. One-day yen hedging costs were relatively low even as they capture the release of Tokyo inflation data and a speech by Bank of Japan Governor Kazuo Ueda. Japan is considering officially stating that the country’s economy
has overcome deflation, Kyodo reported.  US$ Index +0.05%, GBPUSD +0.15%, EURUSD +0.1%, USDJPY +0.2%, AUDUSD -0.1%, USDCHF +0.25%.

Bitcoin +4%, Ethereum +1%. Bitcoin is within striking distance of its record $68,999.99 hit in November 2021.  BlackRock and Fidelity captured 79% of total inflows
into the “Newborn Nine” Bitcoin ETFs since the SEC approved the assets in January.

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
• Affirm Holdings (AFRM) Raised to Buy at President Capital Management
• Ball (BALL) Raised to Buy at BofA; PT $72
• BP (BP/ LN) ADRs Raised to Buy at Jefferies; PT $42.30
• BRF (BRFS3 BZ) ADRs Raised to Overweight at Barclays; PT $4
• Canadian Western Bank (CWB CN) Raised to Buy at Veritas Investment Research Co; PT C$32
• DoorDash (DASH) Raised to Outperform at RBC; PT $175
• Dutch Bros (BROS) Raised to Overweight at Piper Sandler; PT $37
• First Quantum Minerals (FM CN) Raised to Outperform at RBC; PT C$18
• FleetCor (FLT) Raised to Outperform at Baird; PT $330
• fuboTV (FUBO) Raised to Buy at Seaport Global Securities; PT $2.50
• International Paper (IP) Raised to Buy at BofA; PT $42
• Lyft (LYFT) Raised to Outperform at RBC; PT $23
• Norfolk Southern (NSC) Raised to Buy at UBS; PT $302
• Packaging Corp (PKG) Raised to Buy at BofA
• Squarespace (SQSP) Raised to Outperform at Baird; PT $39
• UDR (UDR) Raised to Overweight at Wells Fargo; PT $39
• Downgrades
• Ambev (ABEV3 BZ) ADRs Cut to Equal-Weight at Barclays; PT $3
• Apollo Commercial (ARI) Cut to Underperform at BofA; PT $10.50
• Ares Commercial (ACRE) Cut to Underperform at BofA
• BioVie (BIVI) Cut to Neutral at Cantor
• Blackstone Mortgage (BXMT) Cut to Neutral at BofA; PT $21
• BrightSpire Capital Inc (BRSP) Cut to Underperform at BofA
• CommScope (COMM) Cut to Underweight at JPMorgan
• Ecopetrol (ECOPETL CB) ADRs Cut to Underweight at Morgan Stanley; PT $8.50
• Ferrari (RACE) Cut to Sell at Citi; PT $356.77
• G-III Apparel (GIII) Cut to Underweight at Barclays; PT $23
• Healthpeak Properties (DOC) Cut to Neutral at JPMorgan; PT $19
• International Game (IGT) Cut to Hold at Stifel; PT $30
• P10 (PX) Cut to Equal-Weight at Morgan Stanley; PT $9
• Ready Capital (RC) Cut to Underperform at KBW; PT $8
• Rush Street (RSI) Cut to Neutral at Susquehanna; PT $6
• Starwood Property (STWD) Cut to Neutral at BofA; PT $21.50
• TPG RE Finance Trust (TRTX) Cut to Underperform at BofA
• Vizio Holding (VZIO) Cut to Neutral at Guggenheim
• Xenia Hotels (XHR) Cut to Neutral at B Riley; PT $17
• Initiations
• American Healthcare REIT (AHTR) Rated New Buy at Truist Secs; PT $17
• Rated New Market Outperform at JMP
• Rated New Overweight at Morgan Stanley
• Rated New Overweight at KeyBanc; PT $16
• Rated New Neutral at Citi; PT $14
• Rated New Outperform at RBC; PT $15
• Carvana (CVNA) Rated New Underperform at Baptista Research; PT $69.40
• Connect Biopharma (CNTB) ADRs Rated New Buy at HC Wainwright; PT $7
• Highwood Asset Management (HAM CN) Rated New Buy at Canaccord; PT C$8.75
• Kyverna Therapeutics (KYTX) Rated New Outperform at Leerink; PT $48
• Rated New Overweight at Wells Fargo; PT $44
• Rated New Overweight at Morgan Stanley
• Rated New Overweight at JPMorgan; PT $39
• Live Nation (LYV) Rated New Buy at Baptista Research; PT $118.80
• Metals Acquisition (MTAL) Rated New Sector Outperform at Scotiabank
• Nvidia (NVDA) Rated New Buy at President Capital Management; PT $970
• Pembina Pipeline (PPL CN) Rated New Hold at Baptista Research
• Pool Corp (POOL) Rated New Underperform at Baptista Research; PT $406
• Super Micro Computer (SMCI) Rated New Neutral at Goldman; PT $941
• Teck Resources (TECK/B CN) Rated New Buy at Baptista Research
• Toast (TOST) Rated New Outperform at Evercore ISI; PT $32

Data sources: Bloomberg, Reuters, CQG