Daily Game Plan

TODAY’S GAME PLAN: 

DATA/HEADLINES:  8:15ET ADP Employment Change; 9:45ET BOC Rate Decision; 10:00ET JOLTS Job Openings, Fed’s Powell
testifies before the House Financial Services Committee; 12:00ET Fed’s Daly speaks; 2:00ET Fed’s Beige Book; 4:15ET Fed’s Kashkari speaks at WSJ event

ADP RESEARCH INSTITUTE SAYS U.S. ADDED 140,000 JOBS IN FEB.

TODAY’S HIGHLIGHTS and News:  

• Israel quietly ending reliance on US-made weapons in the wake of the WH’s pressure in the Gaza war
• Head of Russia’s space agency says his country wants to work with China to build a nuclear power plant on the Moon by 2035
• A record 2.7 million excess retirees in the US in 2023 (early retirees)
• Nikki Haley plans to end her presidential campaign today

Global shares rose, holding just below record highs, as China pledge to deploy vigorous measures to keep its economy growing. Meanwhile, investors awaited congressional
testimony from Fed Chair Jerome Powell, one of several potentially market-moving events in the coming days. Highlights include China’s ongoing annual parliament meeting, the European Central Bank meeting on Thursday, and US non-farm payrolls data on Friday.
Israel sold $8 billion of international bonds, its first such transaction in public markets since its war with Hamas started. Hamas said it was pressing on with efforts to secure a ceasefire in Gaza with Israel despite the absence of Israeli negotiators from
talks in Egypt.         

EQUITIES: 

US equity futures rose as traders waited to see if Fed Chair Jerome Powell will continue to push back against the prospect of speedy interest-rate cuts today. Cybersecurity firm CrowdStrike
Holdings soared 25% post-market after forecast-beating results, also lifting peers such as Palo Alto Networks and Zscaler.  Cryptocurrency-linked stocks rallied, spurred by a rebound in Bitcoin, and Tesla bounced after dropping more than 10% in the first two
days of the week.

Futures ahead of the bell: E-Mini S&P +0.5%, Nasdaq +0.8%, Russell 2000 +0.5%, DJI +0.3%

In pre-market trading, CrowdStrike (CRWD) jumps 22% after the cybersecurity provider reported fourth-quarter results that were stronger than expected. ChargePoint (CHPT) declines 5% after
the electric-vehicle charging company reported fourth-quarter revenue that missed estimates. Couchbase (BASE) rises 10% after the infrastructure software company reported fourth-quarter results that beat expectations. Entravision Communications (EVC) tumbles
50% after reporting that Meta Platforms plans to wind down its authorized sales partner program, which accounted for about half of Entravision’s revenue last year. Foot Locker (FL) slumps 9% after the sportswear retailer issued full-year adjusted earnings
per share outlook that failed to meet analyst expectations. JD.com ADRs (JD) soar 11% after the Chinese e-commerce initiated a $3 billion stock repurchase program and reported a better-than-expected 3.6% rise in revenue. Nordstrom (JWN) slides 9% after the
department-store operator reported fourth-quarter net sales that missed expectations. Thor Industries (THO) slumps 16% after the recreation vehicle seller cut its earnings forecast for the full year.

European gauges hovered near record highs as investors awaited Federal Reserve Chair Jerome Powell’s testimony today and the European Central Bank’s meeting later in the week. The Stoxx
Europe 600 Index nudged higher with retail and chemical stocks outperforming, while the media and health care sectors lagged. In the UK, pub stocks including JD Wetherspoon and Marston’s gained after Chancellor of the Exchequer Jeremy Hunt said the government
would freeze alcohol duty until February 2025 as part of his presentation of the spring budget. Travel stocks gained after analysts upgraded TUI AG and British Airways-owner IAG SA. Shares in the UK outperformed slightly ahead of the spring budget, which is
expected to deliver a cut to national insurance payroll tax.  Stoxx 600 +0.3%, DAX +0.1%, CAC +0.2%, FTSE 100 +0.4%. Chemicals +1.5%, Utilities +1.3%, Retail +1.3%. Media -0.6%, Healthcare -0.3%.

Asian stocks were mostly higher as investors continued to digest China’s ambitious growth target, while Chinese tech shares rose ahead of key earnings releases. The MSCI Asia Pacific
Index erased earlier losses to rise 0.5%, with JD.com surging nearly 8% ahead of its fourth-quarter results
JD.com’s revenue beat after adjusting its product lineup and cutting prices.  Hong Kong shares rebounded and Chinese government bonds rose as China vowed steps to defend its 5%
growth target for this year and the central bank hinted it was ready to cut interest rates.  Chinese nuclear technology-related stocks jump after a regulator called for the sector to be among prioritized areas. Hang Seng Tech +2.7%, Hang Seng Index +1.7%,
Indonesia +1.1%, Singapore +0.9%, Taiwan +0.6%, Sensex +0.5%, Topix +0.4%, ASX 200 +0.1%. Kospi -0.3%, CSI 300 -0.4%, Vietnam -0.6%.

FIXED INCOME:
 

Treasuries are slightly cheaper across the curve in early US trading amid bigger losses across core European rates. Gilts underperform ahead of the UK budget announcement
where Chancellor Jeremy Hunt is expected to unveil personal tax cuts. An increase in the German trade balance caused a sell-off in core and semi-core 10yr yields which rose 3-4bps. China’s 10-year bond yield fell to a 22-year low on expectations that authorities
would keep monetary conditions easy. US session includes Fed Chair Powell’s congressional testimony before the House Financial Services Committee along with two peripheral labor-market reports. US 10-year yields around 4.15%, curve spreads are broadly within
1bp of Tuesday’s closing levels.

METALS:
   

Gold inched higher, hovering near its all-time high. Gold prices have risen for six consecutive sessions, fueled by anticipation of Federal Reserve Chairman Jerome
Powell’s testimony and the ADP private sector jobs report. Powell’s testimony is expected to provide a balance between acknowledging economic progress and a commitment to future rate cuts, without unsettling the markets.  Spot gold +0.3%, silver +0.4%.

ENERGY:    

Oil rose after Saudi Arabia unexpectedly increased prices of its main grade to buyers in Asia. Brent traded above $82 a barrel after dropping almost 2% in the week’s
first two sessions. India’s state-run oil refiners are shying away from contracted Russian supply amid tighter enforcement of US sanctions. Russia is still the biggest supplier to India, but there are signs refiners are buying more from other producers, including
Saudi Arabia. WTI +0.8%, Brent +0.6%, US Nat Gas -1.3%, RBOB +0.3%

CURRENCIES:

Volatility remained low in currency markets, though the Japanese yen strengthened on reports that some Bank of Japan board members think it would be appropriate to
lift rates from negative territory at the March meeting. The dollar weakened against most Group-of-10 peers except the Swiss franc, ahead of Powell’s testimony. Egypt devalued its currency, allowing the pound to weaken around 35% after a massive 600-bp interest-rate
hike at an unscheduled central bank meeting. Euro flows are very light in both spot and options markets. The Aussie$ rose after an initial drop as data showed Australia’s economy slowed in the final three months of last year. US$ Index -0.2%, GBPUSD +0.05%,
EURUSD +0.1%, USDJPY -0.3%, AUDUSD +0.35%, NZDUSD +0.3%, USDCHF +0.2%.

Bitcoin %, Ethereum %. Bitcoin rallied again in volatile trade, while ether jumped almost 10% as crypto mania continued to sweep through the investment community.
After hitting $69k then dipping as low as $61,500 yesterday, Bitcoin is back up to $67k this morning. Billions of dollars have flowed into ETFs in the past few weeks and the market is getting extra support from an outlook that includes an Ethereum upgrade
and bitcoin “halving,” which slows the flow of bitcoin minting.  

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
  • Corbus Pharmaceuticals (CRBP) Raised to Buy at Jefferies
  • Gitlab (GTLB) Raised to Outperform at Wolfe; PT $75
  • Honeywell (HON) Raised to Buy at Berenberg
  • Progressive (PGR) Raised to Overweight at Morgan Stanley; PT $227
  • Regenxbio (RGNX) Raised to Outperform at Leerink; PT $37
  • Target (TGT) Raised to Buy at Deutsche Bank; PT $206
    • Raised to Buy at HSBC; PT $195
• Downgrades
  • Alignment Healthcare (ALHC) Cut to Neutral at Piper Sandler
  • BlackRock TCP Capital (TCPC) Cut to Perform at Oppenheimer
  • ChargePoint (CHPT) Cut to Sector Perform at RBC; PT $3
  • Dada Nexus (DADA) ADRs Cut to Neutral at New Street Research; PT $2
  • Intercorp Finl (IFS) Cut to Neutral at Grupo Santander; PT $30
  • NIO Inc. (NIO) ADRs Cut to Accumulate at CLSA; PT $6
  • Rockwell Automation (ROK) Cut to Hold at Berenberg; PT $290
  • TTEC (TTEC) Cut to Hold at Canaccord; PT $13
• Initiations
  • ABB (ABBN SW) ADRs Rated New Hold at Berenberg; PT $39.50
  • Acadia Health (ACHC) Rated New Overweight at Barclays; PT $100
  • Addus HomeCare (ADUS) Rated New Equal-Weight at Barclays; PT $88
  • Agilon Health (AGL) Rated New Underweight at Barclays; PT $5
  • Agnico Eagle Mines (AEM CN) Rated New Hold at Jefferies; PT C$73.32
  • Alignment Healthcare (ALHC) Rated New Underweight at Barclays; PT $4.50
  • Aspen Aerogels (ASPN) Rated New Buy at Roth MKM; PT $22
  • AST SpaceMobile (ASTS) Rated New Sector Outperform at Scotiabank
  • BBB Foods (TBBB) Rated New Overweight at JPMorgan; PT $30
  • BrightSpring Health Services (BTSG) Rated New Buy at HSBC; PT $13
  • Centene (CNC) Rated New Overweight at Barclays; PT $101
  • Cigna (CI) Rated New Overweight at Barclays; PT $393
  • Community Health (CYH) Rated New Equal-Weight at Barclays; PT $3
  • Crinetics Pharma (CRNX) Rated New Buy at Citi; PT $68
  • CVS (CVS) Rated New Equal-Weight at Barclays; PT $78
  • DaVita (DVA) Rated New Equal-Weight at Barclays; PT $133
  • Electrovaya (ELVA CN) Rated New Buy at Roth MKM; PT C$10.87
  • Elevance (ELV) Rated New Overweight at Barclays; PT $584
  • Encompass Health (EHC) Rated New Overweight at Barclays; PT $95
  • Flux Power (FLUX) Rated New Buy at Roth MKM; PT $10
  • HCA Healthcare (HCA) Rated New Overweight at Barclays; PT $356
  • Humana (HUM) Rated New Equal-Weight at Barclays; PT $356
  • Hyzon Motors (HYZN) Rated New Buy at Roth MKM; PT $1.60
  • Legrand (LR FP) ADRs Rated New Buy at Berenberg; PT $23.80
  • Madrigal Pharma (MDGL) Reinstated Buy at Citi; PT $382
  • Molina (MOH) Rated New Equal-Weight at Barclays; PT $437
  • Nvidia (NVDA) Rated New Outperform at CICC; PT $870
  • Privia Health (PRVA) Rated New Equal-Weight at Barclays; PT $22
  • Pure Storage (PSTG) Rated New Buy at Needham; PT $66
  • RadNet (RDNT) Rated New Equal-Weight at Barclays; PT $48
  • Sanmina (SANM) Rated New Outperform at Fox Advisors; PT $80
  • Schneider Electric (SU FP) ADRs Rated New Buy at Berenberg; PT $54.40
  • Siemens (SIE GR) ADRs Rated New Buy at Berenberg; PT $118.50
  • Surgery Partners (SGRY) Rated New Equal-Weight at Barclays; PT $35
  • Tenet (THC) Rated New Overweight at Barclays; PT $113
  • Thermon (THR) Rated New Buy at Roth MKM; PT $36
  • UnitedHealth (UNH) Rated New Overweight at Barclays; PT $551
  • Universal Health (UHS) Rated New Equal-Weight at Barclays; PT $181
  • Yum China (YUMC) Rated New Add at China Galaxy; PT $58.03
    • Rated New Add at CGS Int’l; PT $58.03

Data sources: Bloomberg, Reuters, CQG