Daily Game Plan

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

DATA/HEADLINES:  8:30ET Retail Sales, PPI, Jobless Claims; 10:00ET Business Inventories

US Producer Prices Jump, Adding to Signs of Persisting Inflation. The producer price index for final demand increased 0.6% from January. US FEB. PRODUCER PRICES RISE 0.6% M/M; EST. 0.3%.
US RETAIL SALES INCREASED 0.6% IN FEB.; EST. 0.8%.

TODAY’S HIGHLIGHTS and News:  

• It took 63% of all personal income taxes in Feb to pay the interest on the US debt 
  
• China urges US to stop ‘unreasonably suppressing’ TikTok  
• AI will probably be smarter than any single human next year. By 2029, AI is probably smarter than all humans combined – Elon Musk tweet
• Small and mid-cap stocks will outperform this year, according to BofA
  
• Biden Says US Steel Should Remain Domestically Owned, Operated

Global shares hovered near record highs amid dovish remarks from ECB speakers, while investors remained cautious ahead of key economic data from the US.  ECB’s Muller
says more info required to cut, may get it soon. Governing Council member Stournaras said the ECB must cut rate twice before summer break and two more times before the end of the year. The central bank has monetary policy decisions scheduled for April 11,
June 6 and July 18. JPMorgan Private Bank strategists upgraded price targets on the S&P 500, European stocks and Japanese equities “because underlying data continues to be pretty resilient.”  With the next US Federal Reserve meeting less than a week away,
investors are holding on to the view that the central bank will still cut rates around three times this year.                  

EQUITIES:  

US equity futures made small gains as investors awaited further readings on US inflation for clues on the Federal Reserve’s interest-rate path. The PPI data will be the final inflation
report before next week’s Fed policy meeting. Netflix and Meta Platforms rose in premarket trading, with analysts flagging potential benefits to social-media and streaming companies from legislation targeting TikTok. Adobe advanced ahead of first-quarter earnings.
Tesla fell after a grim sales prediction from a key analyst. Small and mid-cap stocks will outperform large cap this year, according to BofA.    

Futures
ahead of the data: E-Mini S&P +0.3%, Nasdaq +0.4%, Russell 2000 +0.05%, DJI +0.3%  

In pre-market trading, Robinhood (HOOD) shares rise 12% after the online brokerage platform reported positive operating data in February including rising assets under custody and surging
trading volume. Citigroup (C) shares rise 1.9% as Goldman Sachs raised the recommendation on the lender to buy from neutral. Hello Group (MOMO), the parent firm of Chinese dating apps Momo and Tantan, trades 16% lower after reporting a drop in paying users
for both apps. Fisker (FSR) plunged 38% after the Wall Street Journal reported the electric-vehicle startup has hired advisers to assist with a possible bankruptcy filing. SentinelOne (S ) shares drop 11% after the security software company gave a full-year
revenue forecast that was weaker than expected at the midpoint of the range. Turtle Beach (HEAR) soared 27% after the sound technology company reported its fourth-quarter results and said it would buy PDP at an enterprise value of $118 million. UiPath (PATH)
rises 7% after the automation software company reported fourth-quarter results that beat expectations. Under Armour (UAA) shares are down 7.2% after the company announced the return of Kevin Plank as chief executive officer.

European shares rise for a third day as Stoxx 600 reaches a fresh record high even as tech firms extend losses for a second session. Sentiment points to a sector rotation as retail, real
estate and consumer products lead this month’s gains. Consumer products and services outperformed, led by Polish e-commerce platform Allegro.eu SA following an earnings beat. Renewable-energy producer Encavis AG soared 26% after accepting a $3.1B offer from
a group led by KKR. Agricultural chemicals maker K+S AG, trading platform IG Group Holdings and arms maker Rheinmetall AG jumped on encouraging results. Chemicals maker Lanxess AG and insurer Swiss Life Holding AG fell after missing profit estimates. Anheuser-Busch
InBev’s shares were suspended from trading today at the request of Belgium’s Financial Services and Markets Authority following the news tobacco giant Altria would sell down its stake in the brewer. ECB’s Stournaras called for two rate cuts before the August
break, saying “economic growth in the euro area is much weaker than expected and risks are to the downside, while inflation has come down significantly and the risks are balanced.”   Stoxx 600 +0.3%, DAX +0.3%, CAC +0.8%, FTSE 100 -0.05%. Utilities +1.4%,
Retail +0.8%, REITs +0.8%, Food & Bev +0.7%. Basic Resources -0.8%, Travel -0.3%.

Asian stocks were mixed as traders continued to assess whether the Bank of Japan will raise interest rates for the first time since 2007. Sentiment remained fragile in Chinese markets
despite officials pledging central government funds to encourage consumers and businesses to replace old equipment and goods. Indian shares rebounded after financial institutions made record single-day purchases of local shares Wednesday. Investors remain
concerned about the froth in the nation’s small-and mid-cap shares. The MSCI Asia Pacific Index reversed early losses to gain  0.2%. Copper miners were a bright spot in the region after the metal jumped to an 11-month high. AIA Group fell after its full-year
operating profit missed consensus estimates. Kospi +0.9%, Singapore +0.8%, Topix +0.5%, Sensex +0.4%, Taiwan was flat. ASX 200 -0.2%, CSI 300 -0.3%, Vietnam -0.5%, Hang Seng Index -0.7%.

FIXED INCOME: 
 

Treasury yields are steady as traders await US producer-price data, which comes after a sticky consumer reading earlier this week. Bond traders are prepping for a
new Fed dot plot, after the most recent median forecast of policymakers showed three 25-bp rate reductions this year. US yields slightly richer from front-end out to belly of the curve and slightly cheaper across long-end, steepening 2s10s by almost 1bp on
the day. US 10-year Treasury yields around 4.19%, 2-year yield ~4.63%. Bunds trimmed small declines after the ECB comments. Japan’s 20-year auction showed weak demand amid growing fears the BoJ will end its negative interest-rate policy as early as next week.

METALS: 
   

Gold edged lower before a fresh crop of US inflation data that will provide clues on when the Federal Reserve could start to loosen policy. Policymakers are expected
to hold borrowing costs steady for a fifth straight meeting, with swaps markets anticipating a cut in June.  Gold is the No. 1 pick in commodities markets for JPMorgan Chase & Co. and the metal has the potential to rally more than 15% this year to $2,500 an
ounce, according to the bank’s global head of commodities research. Copper steadies after jumping to an 11-month high on likely capacity cuts at Chinese smelters. Traders bought into bullish options yesterday, betting the metal’s rally will extend on possible
supply tightness and monetary easing. Spot gold -0.3%, silver -0.1%.  

ENERGY:   

Crude oil added to the biggest gain in about five weeks after the International Energy Agency said global oil markets face a supply deficit throughout 2024 as OPEC+
looks set to continue output cuts. Dovish signals from central banks indicated a path out of economic doldrums, the IEA said today. The agency bolstered forecasts for global demand growth by 9% on a stronger US outlook. Yesterday’s nearly 2% gain was aided
by news that Ukraine attacked another Russian refinery.  Creeping oil prices are complicating the inflation picture again, with US producer prices and retail sales updates up next on the docket. Annual headline PPI inflation is expected to tick back up to
a still-subdued 1.1% during the month. WTI +0.9%, Brent +0.7%, US Nat Gas -0.1%, RBOB +0.2%.

CURRENCIES:   

In currency markets, the yen weakened for a third day ahead of Friday’s briefing by Rengo — Japan’s largest umbrella group for labor unions — on annual wage negotiations.
The Bank of Japan will decide whether to raise interest rates this month after officials see the initial tally from the spring wage talks. The dollar edged up and headed for its first weekly gain in a month. US$ Index +0.05%, GBPUSD +0.05%, EURUSD -0.1%, USDJPY
flat, AUDUSD flat; NZDSUSD +0.2%. 

Bitcoin -0.5%, Ethereum -1%.

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
• Ashland Inc (ASH) Raised to Buy at Jefferies; PT $126
• Citigroup (C) Raised to Buy at Goldman; PT $68
• Cresco Labs (CL CN) Raised to Buy at Echelon Wealth; PT C$3.25
• Goldman Sachs (GS) Raised to Outperform at Daiwa; PT $430
• Instacart (CART) Raised to Outperform at Bernstein; PT $43
• Jack in the Box (JACK) Raised to Outperform at Wedbush; PT $88
• Labrador Iron Ore (LIF CN) Raised to Buy at Accountability Research
• NeuroPace (NPCE) Raised to Overweight at Wells Fargo; PT $20
• Newlake Capital Partners (NLCP) Raised to Buy at Compass Point
• Palomar (PLMR) Raised to Buy at Jefferies; PT $88
• RTX Corp (RTX) Raised to Overweight at Wells Fargo; PT $120
• Solid Biosciences (SLDB) Raised to Overweight at Piper Sandler; PT $20
• Thomson Reuters (TRI CN) Raised to Overweight at Barclays; PT C$242.33
• UiPath (PATH) Raised to Overweight at JPMorgan; PT $28
• Williams-Sonoma (WSM) Raised to Neutral at Goldman; PT $263
• Raised to Equal-Weight at Morgan Stanley
• Downgrades
• Chubb (CB) Cut to Neutral at Citi; PT $275
• Cue Health (HLTH) Cut to Neutral at BTIG
• Huntington Ingalls (HII) Cut to Hold at Hedgeye
• Oportun (OPRT) Cut to Hold at Jefferies; PT $3.50
• Paymentus (PAY) Cut to Market Perform at Raymond James
• Spruce Bio (SPRB) Cut to Neutral at Ladenburg Thalmann
• Cut to Market Perform at Leerink; PT $2
• Cut to Sector Perform at RBC; PT $2
• Sterling Check (STER) Cut to Hold at Stifel; PT $16.50
• UGI (UGI) Cut to Equal-Weight at Wells Fargo; PT $28
• Under Armour (UAA) Cut to Neutral at BNPP Exane
• Cut to Underperform at Evercore ISI
• Cut to Hold at Williams Trading; PT $8
• Initiations
• Absci (ABSI) Rated New Sector Outperform at Scotiabank; PT $13
• Aecom (ACM) Rated New Buy at Truist Secs; PT $106
• AGCO (AGCO) Rated New Buy at Truist Secs; PT $142
• American Healthcare REIT (AHTR) Rated New Overweight at Barclays
• Ametek (AME) Rated New Buy at Truist Secs; PT $210
• Amkor Technology (AMKR) Rated New Equal-Weight at Fox Advisors
• Avidity Biosciences (RNA) Rated New Overweight at Cantor; PT $60
• Bitdeer Technologies Group (BTDR) Rated New Buy at Benchmark; PT $13
• Boyd Gaming (BYD) Rated New Buy at Hedgeye
• Cascades (CAS CN) Reinstated Sector Perform at Scotiabank; PT C$13.50
• Catalyst Pharma (CPRX) Rated New Buy at Citi; PT $27
• Caterpillar (CAT) Rated New Buy at Truist Secs; PT $390
• CNH Industrial (CNHI) Rated New Buy at Truist Secs; PT $18
• Cognex (CGNX) Rated New Buy at Truist Secs; PT $47
• Cummins (CMI) Rated New Hold at Truist Secs; PT $303
• Deere (DE) Rated New Buy at Truist Secs; PT $494
• Fluor (FLR) Rated New Buy at Truist Secs; PT $46
• Fortive (FTV) Rated New Buy at Truist Secs; PT $99
• Illinois Tool (ITW) Reinstated Buy at Truist Secs; PT $303
• Jacobs (J) Rated New Hold at Truist Secs; PT $154
• MasTec (MTZ) Rated New Hold at Truist Secs; PT $96
• Newamsterdam Pharma (NAMS) Rated New Sector Outperform at Scotiabank
• Oshkosh (OSK) Rated New Hold at Truist Secs; PT $121
• Paccar (PCAR) Rated New Hold at Truist Secs; PT $117
• Parker-Hannifin (PH) Rated New Buy at Truist Secs; PT $602
• Prime Mining Corp (PRYM CN) Rated New Buy at Eight Capital; PT C$3.80
• Quanta Services (PWR) Rated New Buy at Truist Secs; PT $301
• Robinhood (HOOD) Rated New Outperform at Bernstein; PT $30
• SHL TeleMedicine (SHLTN SW) ADRs Rated New Buy at Litchfield Hills; PT $11
• Sirius XM (SIRI) Rated New Neutral at Guggenheim; PT $4
• Super Micro Computer (SMCI) Rated New Buy at Hedgeye
• Tempest Therapeutics Inc (TPST) US Rated New Sector Outperform at Scotiabank; PT $13
• Terex (TEX) Rated New Buy at Truist Secs; PT $73
• United Rentals (URI) Rated New Buy at Truist Secs; PT $793
• Zebra Tech (ZBRA) Rated New Hold at Truist Secs; PT $300
• ZYUS Life Sciences Corp (ZYUS CN) Rated New Buy at Roth MKM; PT C$4

Data sources: Bloomberg, Reuters, CQG