Daily Game Plan

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

DATA/HEADLINES:  8:30ET Empire Manufacturing, Import Price Index, Export Price Index; 9:15ET Industrial Production,
Capacity Utilization, Mfg Production; 10:00ET U. of Mich. Sentiment

TODAY’S HIGHLIGHTS and News:  

• Hamas has proposed what it’s calling a “comprehensive” cease-fire deal
• S&P & Nasdaq Quarterly Rebalance, FTSE Rebalance, Options Expiration Today
• Keenan Allen is now a Chicago Bear

Global stocks are mostly modestly firmer as a recent pickup in inflation isn’t likely to shift Federal Reserve policymakers’ forecasts for three interest-rate cuts
this year. Investors are drawing relief from the recent slowdown in inflation in the euro zone. Japan’s largest union group announced stronger-than-expected annual wage deals Friday, intensifying speculation that the central bank will next week raise interest
rates for the first time since 2007. In Europe, CPI’s out of Italy and France showed slight pick-up while ECB’s Rehn says inflation is set to enable easing this summer. Copper, typically seen as a bellwether of the global economy, surged above $9,000 a ton
as bets that a pick-up in global manufacturing activity will push up demand for industrial commodities.  

EQUITIES:  

US equity futures fluctuated and looking to avoid its first two week losing streak of the year into today’s options expiration.  Fed Chair Jerome Powell and his colleagues will update
their economic and rate projections at the March 19-20 meeting for the first time since December. Economists see policymakers marking up their 2024 forecasts for US gross domestic product to an annual rate of 1.7% from 1.4% and lifting their inflation projection
to 2.5% from 2.4%. In addition to the decision on rates, the committee is scheduled to hold a discussion of issues surrounding its $7.5 trillion balance sheet. Economists have become increasingly optimistic about the economic outlook. US stock funds attracted
record inflows of $56.1 billion in the week through March 13 as investors dismissed the risk of stagflation, BofA said, citing EPFR data. Conservatives are urging the Biden administration to consider Nippon Steel’s acquisition of US Steel “without political
interference.” They argue that the deal would help American workers and allow Japan and the US to better compete with China.     

Futures ahead of the data: E-Mini S&P +0.1%, Nasdaq -0.1%, Russell 2000 +0.15%, DJI +0.15%  

In pre-market trading, ADBE shares slid more than -10% overnight following earnings results and weaker guidance in the software sector. Cardlytics (CDLX) climbs 42% after the application
software company reported fourth-quarter earnings that beat consensus estimates. Fisker (FSR) says in emailed statement that it’s responding to a report of a possible bankruptcy filing. Shares jumped 42%. Geron (GERN) shares soar 77% in premarket trading after
the biotechnology company won the backing of a US Food and Drug Administration advisory panel for its anemia drug candidate on Thursday. PagerDuty (PD) declines 8% after the applications software company gave forecasts that analysts said were below expectations. 
Smartsheet (SMAR) falls 11% after the cloud-based software company’s full-year revenue forecast undershot expectations. Ulta Beauty (ULTA) slides 6.6% after the cosmetics retailer’s fourth-quarter result beat consensus, but according to Oppenheimer, fell short
of “even more bullish expectations.”

European gauges are grinding higher and on track for their eighth consecutive week of gains — the longest winning streak since 2018 — lifted by conviction that euro-area interest rates
will start to fall in the coming months. Telecom and auto shares lead gains while real estate underperform. Among individual movers, Swisscom AG gained 2% after the Swiss operator said it has agreed to buy Vodafone Italia for €8 billion. Shares in Polish fashion
retailer LPP plunged 27% after Hindenburg Research took a short position in Poland’s biggest fashion retailer. HelloFresh SE was among the top gainers, recouping some recent losses, on relief the meal-kit maker’s full-year earnings contained no further negative
surprises. British Airways-owner IAG climbed 4.5% after a double upgrade to outperform at BNP Paribas Exane.  Stoxx 600 +0.3%, DAX +0.4%, CAC +0.5%, FTSE 100 +0.2%. Telecom +1.5%, Autos +1.4%, Retail +1.1%. REITs -0.8%, Healthcare and Tech -0.3% EMEA Q1 INDEX
REBALANCE & QUAD WITCHING

Asian stocks were mostly lower, with Hong Kong and Korean stocks leading a broad regional selloff. The MSCI Asia Pacific Index fell 1%, ending the week 1.7% lower, after seven straight
weekly gains. The technology sector was the biggest drag, led by TSMC as analysts warned the stock’s rally had gone too far, too fast. The PBOC declined to add fresh stimulus, leaving its one-year loan rate unchanged and draining cash from the banking system.
China will impose more stringent requirements for IPOs, its securities regulator said. Changes may include more on-site inspections. Meanwhile,  Nomura raised its 2024 target for the MSCI Asia excluding Japan Index. Philippines -2.1%, Kospi -1.9%, Hang Seng
Index -1.4%, Taiwan -1.3%, Sensex -0.6%, ASX 200 -0.5%, Singapore -0.4%, Nikkei 225 -0.3%. CSI 300 +0.2%, Topix +0.3%, Shanghai Composite +0.5%, CSI 1000 +0.2%.

FIXED INCOME: 
 

US Treasury yields are slightly cheaper across the curve with gains led by the long-end, unwinding a portion of Thursday’s aggressive selloff. Bunds lag after French
inflation is revised higher and money markets trim pricing for potential ECB easing for a fourth day. The US session is set to focus on data, which includes industrial production and University of Michigan sentiment. 10yr yields lower by ~2bps at 4.27%. Both
2s10s and 5s30s spreads flatter by around 1bp on the day.

METALS: 
   

Gold is slightly higher but is headed for its first weekly loss in four after a series of hot inflation readings pushed back expectations for when the Federal Reserve
will cut interest rates. Swaps markets are now indicating a 55% chance of a Fed rate cut in June, down from 67% a week ago. Policymakers are widely expected to leave borrowing costs unchanged at the March 19-20 meeting. Spot gold +0.05%, silver +1.3%.

ENERGY:   

Oil edged lower but remains on track for weekly gains of more than 3% after finding support following a drop in US crude inventories and the IEA forecast a supply
deficit through 2024, changing its earlier projection of a surplus. Drone attacks on Russian energy facilities by Ukraine also helped lift crude prices this week. About 60% of Russian crude outflows may be at risk from Ukraine’s capability to target its export
facilities, RBC said. Brent open interest posted its biggest daily increase since November 2020 this week, ahead of Thursday’s price rally. WTI -0.6%, Brent -0.5%, US Nat Gas +0.9%, RBOB -0.15%.

CURRENCIES:   

In currency markets, the yen is lower even after Japan’s largest union group announced stronger-than-expected annual wage deals, keeping the prospect of some form
of policy tightening from the BOJ next week on the table.  A rate hike has been largely priced in by markets, but a slow pace of tightening after that would reduce the yen’s yield advantage over the dollar as the Fed remains cautious about lowering borrowing
costs. The kiwi is the weakest of the G-10 currencies after some downbeat remarks from the finance minister. US dollar is nearly flat but headed for its first winning week in four as the latest inflation data gives more reasons for the Fed to hold off on cutting
interest rates. US$ Index -0.05%, GBPUSD +0.02%, EURUSD +0.1%, USDJPY +0.2%, AUDUSD -0.1%, NZDUSD -0.5%.  

Bitcoin -4.2%, Ethereum -4.2%.

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
• Dick’s Sporting (DKS) Raised to Buy at Williams Trading; PT $235
• Dollar General (DG) Raised to Outperform at Telsey; PT $170
• DoorDash (DASH) Raised to Neutral at Piper Sandler
• Madrigal Pharma (MDGL) Raised to Neutral at B Riley; PT $270
• nCino (NCNO) Raised to Equal-Weight at Morgan Stanley; PT $27
• Rivian (RIVN) Raised to Overweight at Piper Sandler
• Snowflake (SNOW) Raised to Neutral at Guggenheim
• Southern States Bancshares (SSBK) Raised to Outperform at KBW; PT $35
• Thor Industries (THO) Raised to Buy at Citi; PT $122
• VerticalScope (FORA CN) Raised to Action List Buy at TD; PT C$12
• Raised to Outperform at CIBC; PT C$9
• Downgrades
• Berry Global (BERY) Cut to Sector Perform at RBC; PT $62
• Chesswood Group (CHW CN) Cut to Underperform at Raymond James; PT C$5
• Discover Financial (DFS) Cut to Neutral at Seaport Global Securities
• EverCommerce (EVCM) Cut to Underweight at JPMorgan; PT $10
• Immuneering (IMRX) Cut to Hold at Jefferies; PT $3
• Cut to Market Perform at Cowen
• Markel Group Inc (MKL) Cut to Neutral at Janney Montgomery; PT $1,600
• MorphoSys (MOR GR) ADRs Cut to Equal-Weight at Wells Fargo; PT $18.25
• Oportun (OPRT) Cut to Market Perform at JMP
• Polestar (PSNY) ADRs Cut to Neutral at Piper Sandler
• Republic Services (RSG) Cut to Equal-Weight at Morgan Stanley; PT $199
• Tidewater Midstream (TWM CN) Cut to Neutral at CIBC; PT C$1.10
• Initiations
• APi Group (APG) Rated New Buy at Jefferies; PT $48
• Aqua Metals (AQMS) Rated New Speculative Buy at Benchmark; PT $2
• BorgWarner (BWA) Rated New Overweight at Piper Sandler; PT $43
• Five9 (FIVN) Rated New Outperform at RBC; PT $80
• Ford (F) Reinstated Neutral at Piper Sandler; PT $13
• General Motors (GM) Reinstated Neutral at Piper Sandler; PT $44
• Golden Entertainment (GDEN) Rated New Buy at Truist Secs; PT $45
• LanzaTech Global (LNZA) Rated New Buy at Seaport Global Securities
• Luckin Coffee (LKNCY) ADRs Rated New Buy at SPDB Intl HK; PT $23.70
• Mobileye (MBLY) Rated New Neutral at Piper Sandler; PT $31
• Pure Storage (PSTG) Rated New Buy at Citi; PT $65
• Solid Biosciences (SLDB) Rated New Buy at Citi; PT $16
• Stellantis (STLA) Rated New Overweight at Piper Sandler; PT $39

Data sources: Bloomberg, Reuters, CQG