Daily Game Plan

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

DATA/HEADLINES:  8:30ET New York Fed Services Business Activity; 10:00ET NAHB Housing Market Index

Tuesday – Japan set to depart negative rates environment, FOMC decision Wednesday, BOE Thursday

TODAY’S HIGHLIGHTS and News:  

• Apple is in talks to build Google’s Gemini artificial intelligence engine into the iPhone
• Biden administration is preparing to roll out the toughest-ever limits on car emissions
  

Global shares firmed as Chinese data beat expectations, while investors prepared to navigate a series of central bank meetings this week. China reported industrial
output climbed an annual 7% over January and February, the quickest growth in almost two years. Retail sales rose 5.5% y-o-y.  But real estate remained a worry as property investment fell 9% on the year, underlining the case for further policy support.  Central
banks in the United States, Japan, UK, Switzerland, Norway, Australia, Indonesia, Taiwan, Turkey, Brazil and Mexico all meet this week. While many are expected to hold steady, there is plenty of scope for surprises. Tuesday could see Japan end the longest
run of negative interest rates in history but there is a chance the Bank of Japan might wait for its April meeting.

EQUITIES:  

US equity futures are higher as a fresh bout of optimism over artificial intelligence spurred tech stocks. Nasdaq is outperforming following a report that Apple is in talks to build Google’s
Gemini artificial intelligence engine into the iPhone. Apple and Google are in active negotiations to let Apple license Gemini, Google’s set of generative AI models, to power some new features coming to the iPhone software this year.  Attention today is likely
to be dominated by artificial intelligence bellwether Nvidia’s annual developer conference. NVDA was up 2% ahead of the bell in anticipation. Nasdaq said it was investigating connectivity issues this morning, as trading on its exchange was disrupted for more
than two hours.      

Futures ahead of the bell: E-Mini S&P +0.7%, Nasdaq +1.2%, Russell 2000 +0.5%, DJI +0.2%  

In pre-market trading,  Alphabet (GOOGL) rose as much as 5.5% after Bloomberg News reported that Apple is in talks to build Google’s Gemini AI engine into the iPhone. B. Riley Financial
(RILY) drops 11% as the boutique investment bank failed to file its audited results after an extension period ended. HashiCorp (HCP) rises 11% after a report said the software company is considering options including a sale. Nvidia (NVDA) gains 2.8% after
HSBC raised it price target on the chip giant.  PepsiCo (PEP) advances 1.7% after Morgan Stanley upgraded the beverage and snack company to overweight. Shift4 Payments (FOUR) falls more than 7% after its CEO said bids from potential suitors have failed to
value the payment software firm adequately.

European gauges hovered near record highs, with investors cautious before this week’s interest rate decisions in the US, Britain and Japan. The Bank of England meets on Thursday and is
expected to keep rates at 5.25%, while markets see some chance the Swiss National Bank might ease this week. The Stoxx 600 Index is largely unchanged after capping its eighth weekly gain in a row on Friday, the longest such streak since 2018. Autos and real
estate sectors are leading gains, while telecom shares lagged. Among individual moves, Logitech International SA declined ~7% after the Swiss manufacturer of computer peripherals said CFO Chuck Boynton will step down after just 13 months in the role. British
Land advanced 2.5% after its creation of a joint venture with Royal London Asset Management. Haleon Plc fell after Pfizer said it plans to sell about £2 billion ($2.5 billion) of its shares. Stoxx 600 +0.1%, DAX +0.3%, CAC +0.2%, FTSE 100 +0.2%. Autos +1.3%,
REITs +1.2%, Tech +0.6%. Telecom -0.8%.

Asian stocks advanced, led by Japan and China, as investors braced for an event-heavy week that includes tomorrow’s monetary policy decision in Japan. The MSCI Asia Pacific Index rose
0.9%, with technology and industrial stocks contributing the most. Japanese stocks closed sharply higher as the yen weakened amid a view that interest rate hikes by the Bank of Japan will likely be gradual even if it ends its negative interest rate policy
on Tuesday. Chinese stocks closed at their highest for the year as a set of macro data beat expectations. China semiconductor-related stocks rise after news that the government urged EV makers to buy local chips to reduce reliance on Western imports. Hong
Kong shares closed little changed, after recovering early losses. Nikkei 225 +2.7%, Taiwan +1%, Shanghai Composite +1%, CSI 300 +0.95%, Kospi +0.7%, Philippines +0.4%, Sensex +0.1%, Hang Seng Index +0.1%. Vietnam -1.6%, Indonesia -0.3%.

FIXED INCOME: 
 

Treasuries are narrowly mixed with the front-end outperforming, steepening the curve. A light US data calendar keeps focus on Tuesday’s BOJ meeting, where first rate
hike in 17 years is expected, and Wednesday’s Fed policy announcement. US yields have been gaining in recent days amid bets on fewer rate cuts this year. US front-end yields are richer by 1.3bp on the day with long-end little changed, steepening 2s10s and
5s30s by 1bp. 10-year yields around 4.30%. Treasury auctions this week include $13b 20-year bond reopening Tuesday and $16b 10-year TIPS reopening Thursday.

METALS: 
   

Gold was steady ahead of a Federal Reserve rate meeting this week, which may provide clues on when policymakers will pivot to lowering borrowing costs. A raft of
hotter-than-expected inflation readings last week saw traders dial back bets on the pace and scope of monetary easing expected this year. Still, bullion is holding near record highs.  Spot gold +0.3%, silver +0.3%.

ENERGY:   

Oil prices rose to their highest levels since early November as macro-economic data from China came in ahead of expectations, and Ukrainian attacks on Russian refineries
heightened geopolitical risks. Iraq says it has reduced its oil exports for the coming months to absorb the oversupply from Jan. and Feb., state-run Iraq News agency reports, citing the Oil Ministry. European natural gas prices extended gains for a fourth
day, driven by supply cuts from the Freeport LNG facility and attacks on Russian energy infrastructure. WTI +0.5%, Brent +0.5%, US Nat Gas +5.4%, RBOB +0.9%

CURRENCIES:   

In currency markets, the dollar and yen are stable ahead of a busy week for central bank meetings. Speculation is now rife the BOJ will end its negative interest
rate policy following months of second-guessing and after news last week of the highest wage growth in more than 30 years. The BoJ is expected to hike rates at tonight’s meeting or at least end Yield Curve Control. Investor bets on pound gains are at the highest
level for 17 years, leaving the currency at risk of a pullback if the Bank of England joins peers in signaling rate cuts this week. US$ Index -0.1%, GBPUSD +0.1%, EURUSD +0.1%, USDJPY -0.01%, AUDUSD +0.25%, USDNOK -0.2, NZDUSD +0.15%. 

Spot Bitcoin is flat, 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
• 1stdibs.com (DIBS) Raised to Outperform at Evercore ISI
• Charter Communications (CHTR) Raised to Outperform at Bernstein
• Equity Residential (EQR) Raised to Market Perform at Raymond James
• Esab (ESAB) Raised to Overweight at JPMorgan; PT $125
• Essex Property (ESS) Raised to Outperform at Raymond James; PT $265
• Futu Holdings (FUTU) ADRs Raised to Accumulate at CLSA; PT $65
• Globus Medical (GMED) Raised to Buy at BTIG; PT $60
• Hudson Pacific (HPP) Raised to Outperform at Wolfe; PT $8
• Latham Group (SWIM) Raised to Buy at Stifel; PT $4
• PagerDuty Inc (PD) Raised to Buy at Truist Secs; PT $30
• PagSeguro (PAGS) Raised to Buy at New Street Research; PT $18
• Paramount Group (PGRE) Raised to Inline at Evercore ISI; PT $5
• PepsiCo (PEP) Raised to Overweight at Morgan Stanley; PT $190
• Regions Financial (RF) Raised to Buy at Citi; PT $23
• Ventas (VTR) Raised to Outperform at Evercore ISI; PT $50
• Wheaton Precious Metals (WPM CN) Raised to Buy at TD; PT C$71.78
• Downgrades
• Amylyx Pharmaceuticals (AMLX) Cut to Neutral at Mizuho Securities
• Apartment Income REIT (AIRC) Cut to Market Perform at Raymond James
• Hibbett Inc. (HIBB) Cut to Market Perform at Telsey; PT $74
• Cut to Hold at Williams Trading; PT $73
• Invitation Homes (INVH) Cut to Inline at Evercore ISI
• Lithium Americas (LAC CN) Cut to Sector Perform at Scotiabank; PT C$9.48
• New York Community Bancorp (NYCB) Cut to Underperform at Raymond James
• NexPoint Residential (NXRT) Cut to Underperform at Raymond James
• Nike (NKE) Cut to Sell at Williams Trading; PT $85
• Prologis (PLD) Cut to Inline at Evercore ISI
• SL Green (SLG) Cut to Underperform at Evercore ISI
• Terex (TEX) Cut to Neutral at JPMorgan; PT $63
• Initiations
• Alarm.com (ALRM) Rated New Hold at Baptista Research; PT $82.20
• Ardagh Metal Packaging (AMBP) US Re-Initiated Underweight at Morgan Stanley
• Ball (BALL) Re-Initiated Equal-Weight at Morgan Stanley
• Belden (BDC) Rated New Hold at Baptista Research; PT $94.60
• BlackLine Inc (BL) Rated New Peerperform at Wolfe
• C3.ai (AI) Rated New Underperform at Baptista Research; PT $29.70
• Cable One (CABO) Rated New Hold at Baptista Research; PT $514.30
• Calix (CALX) Rated New Buy at Baptista Research; PT $42.40
• CarGurus (CARG) Rated New Hold at Baptista Research; PT $25.70
• Certara (CERT) Rated New Underperform at Baptista Research; PT $19.90
• Clear Secure (YOU) Rated New Hold at Baptista Research; PT $22.30
• Collective Mining (CNL CN) Rated New Speculative Buy at Canaccord
• Coursera (COUR) Rated New Buy at Baptista Research; PT $24.30
• Credo Technology (CRDO) Rated New Buy at Baptista Research; PT $25.70
• Crown Holdings (CCK) Re-Initiated Equal-Weight at Morgan Stanley
• DigitalOcean (DOCN) Rated New Underperform at Baptista Research
• Dynatrace (DT) Rated New Outperform at Wolfe; PT $60
• Envestnet (ENV) Rated New Outperform at Baptista Research; PT $64
• FormFactor (FORM) Rated New Hold at Baptista Research; PT $48.90
• Howmet Aerospace (HWM) Rated New Outperform at RBC; PT $75
• Hut 8 Corp (HUT CN) Rated New Buy at Needham; PT C$16.25
• Intapp (INTA) Rated New Buy at Baptista Research; PT $49.50
• InterDigital (IDCC) Rated New Outperform at Baptista Research; PT $127
• Itron (ITRI) Rated New Hold at Baptista Research; PT $104
• Jasper Therapeutics (JSPR) Rated New Outperform at Cowen
• Kulicke & Soffa (KLIC) Rated New Outperform at Baptista Research
• Lassonde Industries (LAS/A CN) Rated New Buy at Canaccord; PT C$175
• Marvell Technology (MRVL) US Reinstated Buy at President Capital Management; PT $82
• NCR Atleos (NATL) Rated New Neutral at Goldman; PT $23
• NCR Voyix Corp (VYX) Rated New Neutral at Goldman; PT $14
• Playtika (PLTK) Rated New Outperform at Baptista Research; PT $8.80
• Regulus Therapeutics (RGLS) Rated New Outperform at Leerink; PT $6
• Silynxcom (SYNX) Rated New Buy at ThinkEquity; PT $8
• SiTime (SITM) Rated New Buy at Baptista Research; PT $136
• Viasat (VSAT) Rated New Buy at Baptista Research; PT $25.30
• Vishay Intertech (VSH) Rated New Underperform at Baptista Research
• Welltower (WELL) Rated New Outperform at BNPP Exane; PT $104
• Wesdome Gold Mines (WDO CN) Rated New Outperform at CIBC; PT C$12
• Ziff Davis Inc (ZD) Rated New Outperform at Baptista Research

Data sources: Bloomberg, Reuters, CQG