Daily Game Plan

TODAY’S GAME PLAN:  

DATA/HEADLINES:  8:30ET Employment Report, Canada Unemployment

US FEB. UNEMPLOYMENT RATE 3.9%; EST. 3.7%. US FEB. NONFARM PAYROLLS RISE 275K M/M; EST. +200K

TODAY’S HIGHLIGHTS and News:  

• ECB’S VILLEROY: WE’RE MORE AND MORE CONFIDENT ON INFLATION GOAL
• Tire Separates From Boeing 777, Crushes Cars In San Francisco Parking Lot
  
• LILLY SAYS ALZHEIMER’S DRUG DECISION DELAYED BY FDA

Global shares are higher after a weaker inflation forecast from the European Central Bank on Thursday reinforced the view that monetary easing will begin in June.
The broad rally came after Federal Reserve Chair Jerome Powell told a Senate committee that the central bank is “not far” from confidence needed to ease policy. Policymakers from the European Central Bank lined up to support a rate cut there before their summer
break. The ECB will likely start lowering interest rates sometime between April and June, French central bank head and ECB policymaker Francois Villeroy de Galhau said today. Meanwhile, the Bank of Japan is leaning towards ending negative rates in March according
to many sources depending on wage talks which end next week.             

EQUITIES: 

US equity futures edged lower with all eyes on the crucial monthly US jobs report that could shift the needle on timing of interest-rate cuts. The Labor Department’s closely watched jobs
data is likely to show that job growth slowed in February after two straight months of robust gains, though it probably remains too strong for the Fed to consider a June rate cut. Chip stocks advanced in US premarket trading, with Nvidia having added more
than $1 trillion in value already this year. Tech stock funds saw their largest weekly outflow on record, but it hasn’t dimmed the broader euphoria, BofA strategists said, citing EPFR data. The Senate is expected to give Congress’ final approval today of legislation
funding through September, averting a partial government shutdown.   

Futures ahead of the data: E-Mini S&P -0.1%, Nasdaq -0.1%, Russell 2000 -0.1%, DJI -0.3%

In pre-market trading, Amylyx Pharmaceuticals (AMLX) tumbles 80% after the company said the AMX0035 PHOENIX study missed endpoints. Costco (COST) shares slipped 4% after its quarterly
sales miss overshadowed an earnings beat. Broadcom’s (AVGO -2%) revenue beat and forecast for $10 billion in sales of AI-linked chips failed to impress investors. AerSale (ASLE) sinks 20% after the aircraft engineering company reported revenue and adjusted
profit trailed estimates. Carvana (CVNA) rises 5% as RBC issued an upgrade and doubled the price target to a Street-high $90. DocuSign (DOCU) rises 8.6% after the e-signature company reported fourth-quarter results that beat and gave a strong outlook. Domo
(DOMO) falls 12% as the application software company’s outlook pointed to ongoing growth pressures.  Biogen (BIIB) gains 3.7%; Biogen markets Leqembi with partner Eisai, which received FDA approval to treat Alzheimer’s in July. Funko (FNKO) jumps 7% after
the maker of bobble-head dolls reported fourth-quarter profit and sales that came in ahead of estimates. Gap (GPS) advances 8% after the clothing retailer reported fourth-quarter EPS that topped consensus expectations. Marvell Technology (MRVL) slips 5.6%
after the chipmaker gave a first-quarter forecast that was weaker than expected. MongoDB (MDB) drops 8.8% after the database software company gave a full-year forecast that was much weaker than expected. Porch Group (PRCH) rises 22% after the home services
software company reported an earnings beat. Samsara (IOT) jumps 14% after the application software company’s full-year forecast topped analyst estimates.

European gauges are mixed ahead of the US jobs report. Stoxx 600 index is roughly flat and is on track for a seventh week of gains. Among individual names, HelloFresh SE plunged by a
record 42% after the meal-kit firm said it no longer expects to achieve previously provided 2025 goals. DS Smith Plc rallied 7% after Mondi Plc agreed to buy the company for £5.1 billion ($6.5 billion) to create one of the largest makers of packaging. Stoxx
600 -0.05%, DAX -0.2%, CAC +0.01%, FTSE 100 -0.5%. Financial Services +0.9%, REITs +0.7%, Insurance +0.6%. Telecom and Technology -0.4%.

Asian stocks rose as technology shares rallied again on dovish signals from the US central bank as well as ongoing optimism about artificial intelligence. The MSCI Asia Pacific Index
advanced 0.9%, for its longest weekly win streak in more than three years. Tech hardware shares were the biggest boosts to the regional gauge, with TSMC rallying for a fifth day. Mainland China benchmarks edged higher as traders digested developments from
the National People’s Congress. Some were disappointed by the lack of details for strong stimulus from Beijing to shore up the nation’s economy. China is in the process of raising more than $27 billion for its largest chip fund, accelerating the development
of cutting-edge technologies to counter a US campaign to thwart its rise. Japan’s household spending shrank the most in three years, its 11th straight decline. Philippines +1.5%, Kospi +1.25%, ASX 200 +1.1%, Thailand +1%, Hang Seng Index +0.75%, Taiwan +0.5%,
CSI 300 +0.4%, Topix +0.3%. Vietnam -1.65%. India was closed for a holiday.

FIXED INCOME:
 

Treasuries are mixed ahead of the jobs report. Bunds lead gains for most sovereign bond markets after several European Central Bank policymakers suggested an April
interest-rate hike shouldn’t be ruled out. US 10-year yields around 4.07%, 2s10s curve flatter by ~2bps after widening by almost 5bps yesterday.  Jobs report is expected to show 200k nonfarm payrolls increase vs 353k in January; crowd-sourced whisper number
is 215k. IG dollar issuance slate empty so far with no offerings expected. Yields are spiking after the employment number that is much stronger than expected.

METALS:
   

Gold extended gains for an eight straight day and fresh all-time high on expectations that US jobs data today will cement the case for interest-rate cuts in coming
months. Spot gold is headed for its biggest weekly jump in five months amid optimism for a mid-year Fed rate cut. The frenzied nature of this month’s gains has led some analysts to conclude that major new buyers are stepping into the market, such as investment
funds making bold bets on the global macroeconomic outlook.  Spot gold +0.3%, silver +0.7%.  Gold’s 14 day RSI is at the highest level since the March 2022 high.

ENERGY:

Oil prices trade lower ahead of US jobs report, on track for a losing week. An International Energy Agency official told Reuters the agency sees a relatively well-supplied
market in 2024 with demand growth slowing.  China’s oil demand has entered a low-growth phase as decarbonization starts to eat into fossil fuel consumption, the country’s biggest energy producer said. WTI -0.7%, Brent -0.6%, US Nat Gas -1.9%, RBOB -0.5%.

CURRENCIES:

The dollar is slightly lower, headed for its sharpest weekly drop of the year on the growing likelihood of lower borrowing costs later in the year. The yen rallied
after a Reuters report that a growing number of BOJ policymakers are leaning toward ending negative rates this month. the euro fell after Bank of France Governor Francois Villeroy de Galhau said the ECB is very likely to cut interest rates at its April or
June meetings. US NFP in focus, with the consensus forecasting that 200,000 new jobs were created last month. US$ Index -0.05%, GBPUSD +0.2%, EURUSD -0.15%, USDJPY -0.6%, AUDUSD +0.3%, USDNOK -0.3%.

Bitcoin +0.2%, Ethereum +1.7%. Another huge inflow into bitcoin ETFs ($473MM net), driven by record inflow into Fidelity. Total inflows now $9.4B.  

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
  • Carvana (CVNA) Raised to Sector Perform at RBC; PT $90
  • Coinbase (COIN) Raised to Neutral at Goldman
  • Dycom Industries (DY) Raised to Buy at B Riley; PT $172
  • First Quantum Minerals (FM CN) Raised to Overweight at Morgan Stanley
  • GameStop (GME) Raised to Hold at Hedgeye
  • Gap (GPS) Raised to Outperform at KGI Securities; PT $25.20
  • Gates Industrial (GTES) Raised to Outperform at Wolfe; PT $20
  • GE (GE) Raised to Overweight at JPMorgan; PT $180
  • HCI Group (HCI) Raised to Outperform at William Blair
  • Healthpeak Properties (DOC) Raised to Outperform at RBC; PT $21
  • Kinetik (KNTK) Raised to Overweight at JPMorgan; PT $40
  • Marvell Technology (MRVL) Raised to Buy at Summit Insights
  • MongoDB (MDB) Raised to Buy at DA Davidson; PT $430
  • Regenxbio (RGNX) Raised to Outperform at RBC; PT $35
• Downgrades
  • a.k.a. Brands (AKA) Cut to Hold at Truist Secs; PT $10
  • AeroVironment Inc (AVAV) Cut to Neutral at Baird; PT $161
  • ALX Oncology (ALXO) Cut to Hold at Stifel; PT $14
  • Avangrid (AGR) Cut to Sell at Janney Montgomery; PT $35
  • Figs (FIGS) Cut to Market Perform at Oppenheimer
  • Hess Midstream (HESM) Cut to Neutral at JPMorgan; PT $37
  • Kilroy (KRC) Cut to Sector Perform at RBC; PT $39
  • Kodiak Gas Services (KGS) Cut to Neutral at JPMorgan; PT $27
  • Marvell Technology (MRVL) Cut to Neutral at Fubon; PT $75
  • Maxeon Solar (MAXN) Cut to Sell at UBS; PT $3
  • Northern Trust (NTRS) Cut to Sell at CFRA; PT $86
  • Petrobras (PETR4 BZ) ADRs Cut to Neutral at BofA
    • ADRs Cut to Neutral at Grupo Santander; PT $18
  • Runway Growth Finance (RWAY) Cut to Neutral at JPMorgan; PT $12.50
  • Rush Street (RSI) Cut to Market Perform at JMP
  • Sleep Country Canada (ZZZ CN) Cut to Neutral at CIBC; PT C$32
  • Union Pacific (UNP) Cut to Hold at Hedgeye
  • Vulcan Materials (VMC) Cut to Peerperform at Wolfe
• Initiations
  • Aaron’s Co (AAN) Reinstated Market Perform at Cowen; PT $7
  • ACI Worldwide (ACIW) Rated New Buy at Jefferies; PT $38
  • Associated Banc (ASB) Rated New Equal-Weight at Barclays; PT $22
  • AST SpaceMobile (ASTS) Rated New Buy at UBS; PT $7
  • Banc of California (BANC) Rated New Equal-Weight at Barclays; PT $16
  • Bank of Hawaii (BOH) Rated New Underweight at Barclays; PT $51
  • BankUnited (BKU) Rated New Equal-Weight at Barclays; PT $29
  • Birkenstock (BIRK) Rated New Sell at Hedgeye
  • Cadence Bank (CADE) Rated New Equal-Weight at Barclays; PT $28
  • Columbia Banking (COLB) Rated New Equal-Weight at Barclays; PT $20
  • East West Bancorp (EWBC) Rated New Overweight at Barclays; PT $106
  • Engene Holdings (ENGN) Rated New Overweight at Morgan Stanley; PT $40
  • First Hawaiian (FHB) Rated New Equal-Weight at Barclays; PT $25
  • First Horizon (FHN) Rated New Overweight at Barclays; PT $18
  • First Interstate Banc (FIBK) Rated New Equal-Weight at Barclays; PT $28
  • Gap (GPS) Rated New Sell at Hedgeye
  • Hesai Group (HSAI) ADRs Rated New Buy at Deutsche Bank; PT $7
  • Ideaya Biosciences (IDYA) Rated New Buy at BTIG; PT $55
  • J M Smucker (SJM) Rated New Hold at Baptista Research; PT $130.70
  • Knife River Corp (KNF) Rated New Peerperform at Wolfe
  • New York Community Bancorp (NYCB) Rated New Equal-Weight at Barclays
  • Newpark Resources (NR) Rated New Buy at Roth MKM; PT $10
  • Old National (ONB) Rated New Overweight at Barclays; PT $20
  • Ovintiv (OVV) Rated New Hold at Baptista Research; PT $53.50
  • Permian Resources (PR) Rated New Hold at Baptista Research; PT $16.80
  • Pinnacle Financial (PNFP) Rated New Equal-Weight at Barclays; PT $93
  • Popular (BPOP) Rated New Overweight at Barclays; PT $99
  • PROG Holdings (PRG) Rated New Outperform at Cowen; PT $37
  • Prosperity Banc (PB) Rated New Equal-Weight at Barclays; PT $68
  • Shift4 Payments (FOUR) Rated New Hold at Baptista Research; PT $93.10
  • SQM (SQM/B CI) ADRs Rated New Outperform at Haitong Intl; PT $80
  • Synovus (SNV) Rated New Equal-Weight at Barclays; PT $42
  • Texas Capital (TCBI) Rated New Underweight at Barclays; PT $47
  • UMB Financial (UMBF) Rated New Equal-Weight at Barclays; PT $91
  • Upbound Group Inc (UPBD) Rated New Outperform at Cowen; PT $43
  • Valley National (VLY) Rated New Underweight at Barclays; PT $8
  • Webster Financial (WBS) Rated New Overweight at Barclays; PT $70
  • Western Alliance (WAL) Rated New Overweight at Barclays; PT $91
  • Wintrust Financial (WTFC) Rated New Overweight at Barclays; PT $135

Data sources: Bloomberg, Reuters, CQG