Daily Game Plan

TODAY’S GAME PLAN:  

DATA/HEADLINES:  10:00ET House votes on TikTok bill; 1:00ET 30 Year Bond Auction

TODAY’S HIGHLIGHTS and News:  

• Putin warns the West that Russia is ready for nuclear war if the US sent troops to Ukraine
  
• Content creators are revolting against a potential TikTok ban
  
• IDF confirmed that a Hamas military leader was killed by a strike in southern Lebanon
• Robert F. Kennedy Jr. is considering Aaron Rodgers or Jesse Ventura for a 2024 running mate
  
• Wage deals in Japan bolstered expectations for a BOJ policy shift
  

World shares held close to record highs thanks to new all-time peaks in Europe and the US, as investors bet hotter-than-expected US inflation won’t stop the Federal
Reserve and other central banks from cutting interest rates.  Expectations that the Bank of Japan will raise rates is closer due to recent wage hike agreements from several of Japan’s top corporations. BOJ officials are considering scrapping the buying of
ETFs, while continuing bond purchases, sources said. Putin warned the West that Russia was technically ready for nuclear war and that if the US sent troops to Ukraine, it would be considered a significant escalation of the conflict. He said the nuclear war
scenario was not “rushing” up and he saw no need for the use of nuclear weapons in Ukraine.                

EQUITIES: 

US equity futures were little changed in the wake of another record-breaking session and its best CPI day since November.  The S&P 500 has gone 265 sessions without a drop of at least
2%, its longest stretch since 2018, according to Bloomberg data. President Biden said he will sign a bill that could ban TikTok and would give him the power to ban other apps that he deems to be security threats if passed by Congress. House of Representatives
plans to vote on a bill today that would give TikTok’s Chinese owner ByteDance about six months to divest the US assets of the short-video app or face a ban. Meanwhile, the Pentagon pulled out of a plan to spend as much as $2.5 billion on a chip grant to Intel
Corp.    

Futures ahead of the bell: E-Mini S&P -0.03%, Nasdaq -0.2%, Russell 2000 -0.1%, DJI +0.05%

In pre-market trading, Beauty Health (SKIN) soars 21% after the skin-care company reported fourth-quarter sales that topped estimates. Clover Health (CLOV) rises 9% after the Medicare
Advantage insurer reported Q4 revenue that beat estimates. Dollar Tree (DLTR) slumps 6% after issuing an annual sales outlook that fell short. Eli Lilly & Co. (LLY) rises about 1% after teaming up with Amazon.com to expand its developing business of selling
weight-loss drugs directly to patients. Petco (WOOF) rises 3% after the company reported comparable sales for the fourth quarter that topped the consensus estimate. Tesla (TSLA) falls 2% after Wells Fargo cuts the recommendation on the EV maker’s stock to
underweight. ZIM Integrated Shipping (ZIM) falls 4% after the marine shipping company reported its fourth-quarter results and gave a positive outlook.

European gauges nudged higher with the benchmark Stoxx 600 Index hovering near a record high after a slew of upbeat corporate earnings reports. The region’s retailers outperform as solid
results from Zalando (+14%) and Zara-owner Inditex more than offset news of Adidas’ first loss in 30 years due to its Kanye West problems. Steel company Vallourec SA jumped after ArcelorMittal SA agreed to buy an equity stake. Britain’s economy returned to
growth in January after entering a shallow recession in the second half of 2023, official data showed. UK GDP grew by 0.2% month-on-month. Stoxx 600 +0.2%, DAX +0.05%, CAC +0.5%, FTSE 100 ~flat. Retail +2.5%, Utilities +1%, Banks +0.9%, Basic Resources +0.8%.
Autos -0.8%, Telecom -0.4%.

Asian stocks were mixed to lower as investors tried to gauge the prospects for global monetary policy after higher than expected US inflation data. Japanese shares fell as Toyota Motor
met its labor union’s demands for increases in salary and bonuses. Toyota agreed to give factory workers their biggest pay increase in 25 years, sparking expectations that bumper salary raises will give the central bank more flexibility to make a key policy
shift next week. Panasonic, Nippon Steel and Nissan were also among some of Japan’s biggest names that agreed to fully meet union demands for pay hikes. The MSCI Asia Pacific Index erased early gains to fall 0.3%. Mainland Chinese stocks fell, halting a three-day
win streak. Sensex -1.2%, CSI 300 -0.7%, Topix -0.3%, Hang Seng Index -0.1%. Vietnam outperformed, up 2%. Philippines +1.5%, Singapore +0.6%, CSI 1000 +0.5%, Kospi +0.4%, ASX 200 +0.2%. The Shanghai Composite fell 0.4% after touching its 200 day moving average
for the first time since August.

FIXED INCOME:
 

Treasuries are slightly cheaper across the curve with front-end underperforming. Hedge funds are unwinding short Treasury futures bets at a rapid clip, a sign that
basis-trade positions are diminishing, BofA strategists said. Gilts lag across core European rates as market digests an offering of 30-year inflation-linked debt and a wave of domestic data. US session includes 30-year bond reopening, following soft reception
for Tuesday’s 10-year sale. US 10-year Treasury yields around 4.18%. 2-year yield ~4.617%.

METALS:
   

Gold steadied after snapping a record-breaking run of gains, as the market weighs the impact of US inflation print this week that damped hopes of an imminent easing
of interest rates by the Federal Reserve. Still, traders are sticking to their guns on rate-cut wagers, with swaps markets pricing in around a 60% chance of a reduction in June. Bullion traded in a narrow range after closing 1.1% lower on Tuesday, the first
decline in 10 sessions. Spot gold +0.3%, silver +0.7%.

ENERGY:

Oil prices rose on expectations of strong global demand. OPEC+ stuck to its forecast of a strong oil demand growth globally and raised its economic growth forecast
for this year. US crude stockpiles fell by 5.5 million barrels last week, the API is said to have reported, registering the first decline in seven weeks if confirmed by the EIA. Gasoline and distillate supplies also dropped. WTI +1.7%, Brent +1.5%, US Nat
Gas -1.7%, RBOB +1.6%.

CURRENCIES:

In currency markets, the dollar kept to tight daily ranges versus Group-of-10 peers. The dollar fluctuated and hasn’t seen a daily move by more than 1% in either
direction since November. The yen saw two-way flows ahead of next week’s Bank of Japan policy meeting. The yen initially strengthened after Toyota Motor met its labor union’s demands for increases in salary and bonuses. Sterling firmed after data showed the
UK economy rebounded in January. US$ Index -0.1%, GBPUSD +0.1%, EURUSD +0.1%, USDJPY +0.2%, AUDUSD +0.1%, USDNOK -0.3%.

Bitcoin +2.9%, Ethereum +2.5%. Within two months of launch, the spot bitcoin ETFs account for ~4% of all bitcoin outstanding.

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
  • BILL Holdings Inc (BILL) Raised to Neutral at BNPP Exane; PT $72
  • Cellebrite DI (CLBT) Raised to Outperform at William Blair
  • Cooper Cos (COO) Raised to Overweight at JPMorgan; PT $120
  • Kanzhun (BZ) ADRs Raised to Buy at New Street Research; PT $25
    • ADRs Raised to Outperform at Macquarie
  • Moelis & Co (MC) Raised to Neutral at Goldman; PT $58
  • Nice Ltd (NICE IT) ADRs Raised to Buy at DA Davidson
  • Nucor (NUE) Raised to Buy at Citi; PT $240
  • Southwest Air (LUV) Raised to Hold at Jefferies; PT $28
  • Texas Roadhouse (TXRH) Raised to Outperform at Baird; PT $175
  • Tri Pointe Homes (TPH) Raised to Outperform at RBC; PT $38
• Downgrades
  • Brown & Brown (BRO) Cut to Underperform at BofA; PT $86
  • Cleveland-Cliffs (CLF) Cut to Neutral at Citi; PT $22
  • Columbia Banking (COLB) Cut to Neutral at DA Davidson; PT $20
  • EQT Corp (EQT) Cut to Neutral at Mizuho Securities; PT $39
  • Fidelity National (FIS) Cut to Neutral at Baird; PT $78
  • Heritage Insurance (HRTG) Cut to Market Perform at JMP
  • MP Materials (MP) Cut to Equal-Weight at Morgan Stanley; PT $15.50
  • Tesla (TSLA) Cut to Underweight at Wells Fargo; PT $125
• Initiations
  • Alphabet (GOOGL) Rated New Buy at SWS Research; PT $179.50
  • Bitdeer Technologies Group (BTDR) Rated New Buy at BTIG; PT $15
  • Campbell Soup (CPB) Reinstated Inline at Evercore ISI; PT $49
  • Carnival (CCL) Reinstated Buy at Goldman; PT $20
  • Cue Biopharma (CUE) Rated New Buy at Jefferies; PT $6
  • Freehold Royalties (FRU CN) Reinstated Market Perform at BMO; PT C$15
  • Idacorp (IDA) Rated New Equal-Weight at Morgan Stanley; PT $92
  • Immunovant (IMVT) Rated New Buy at Goldman; PT $50
  • IN8bio (INAB) Rated New Buy at JonesTrading; PT $5
  • Legend Biotech (LEGN) ADRs Rated New Outperform at Raymond James
  • LNG Energy Group (LNGE CN) Rated New Buy at Eight Capital
  • Manhattan Associates (MANH) Rated New Neutral at Citi; PT $260
  • MidWestOne Financial (MOFG) Rated New Neutral at Piper Sandler; PT $24
  • Norwegian Cruise (NCLH) Reinstated Neutral at Goldman; PT $19
  • PrairieSky Royalty (PSK CN) Reinstated Outperform at BMO; PT C$30
  • Prelude Therapeutics (PRLD) Rated New Market Outperform at JMP; PT $7
  • Royal Caribbean (RCL) Reinstated Buy at Goldman; PT $162
  • SPS Commerce (SPSC) Rated New Buy at Citi; PT $216
  • Staar Surgical (STAA) Rated New Outperform at CICC; PT $46.50
  • Topaz Energy (TPZ CN) Reinstated Outperform at BMO; PT C$27
  • Weyerhaeuser (WY) Reinstated Neutral at CIBC; PT $37

Data sources: Bloomberg, Reuters, CQG