Daily Game Plan

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

DATA/HEADLINES:  2:00ET FOMC Rate Decision; 2:30ET Fed Chair Powell’s press conference*

TODAY’S HIGHLIGHTS and News:  

• US Aims To Restock Strategic Oil Reserves By Year-End
  
• IRS will expand its pursuit of high-wealth tax dodgers with new initiatives using AI
• Benjamin Netanyahu will speak with Senate Republicans via video today
  
• Chipotle board approves a 50-for-1 stock split
  

Global shares edged lower as investors await the Federal Reserve’s interest-rate decision to see if officials stick to their outlook for cuts. While the Fed is expected
to hold, investors will be parsing commentary to assess how quickly it might start to ease. UK inflation fell more than expected to the lowest level in 2 1/2 years, boosting expectations that the Bank of England will be able to reduce borrowing costs soon.
Consumer prices rose by 3.4% y-o-y after a 4.0% increase in January, while services inflation, which the BoE watches closely, slowed to 6.1% from 6.5%. Core inflation also slowed, dropping to 4.5% from 5.1%. The BOE is expected to leave interest rates on hold
on Thursday. Brazil’s central bank is widely expected to deliver a sixth consecutive 50-bp rate cut today.

EQUITIES:  

US equity futures fluctuated as investors awaited the conclusion of the Federal Reserve’s meeting where the central bank is expected to keep borrowing costs unchanged. The summary of
the Fed’s economic projections will reveal whether still-robust data are giving officials cause to dial back intentions to cut rates, or if their outlook for three reductions this year remains on track despite inflation remaining above the Fed’s 2% target.
The Biden administration said it is awarding Intel nearly $20 billion in grants and loans to subsidize leading-edge chip production. The goal is to reduce reliance on China and Taiwan.       

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

In pre-market trading, Intel Corp. rose as much as 4.4% after winning $8.5 billion in US grants — and as much as $11 billion in loans — to help fund the expansion of its domestic factories.
The White House is also weighing blacklisting Chinese chip firms linked to Huawei.
Chipotle (CMG) rises 5% after saying its board approved a 50-for-1 stock split.  Aquestive Therapeutics (AQST) slumps 11% after the pharmaceutical company priced the offering of 16.7 million shares at a 15.7% discount to the last close. BioNTech ADRs
(BNTX) fall 5% after the vaccine maker reported earnings that missed estimates. Boeing (BA) slips about 1% after predicting a massive cash drain for the first quarter as regulatory scrutiny and slower output of its 737 Max jetliner. Mobileye (MBLY) rises 4%
after the firm deepened its partnership with Volkswagen to accelerate development of automated driving functions. PDD Holdings (PDD) jumps 13% after the company reported stronger-than-expected revenue as it ramped up its overseas expansion. Tesla (TSLA) ticks
0.6% higher after announcing plans to raise the starting price of its locally-made Model Y sport utility vehicles in China. 

European gauges are mixed with the Stoxx 600 Index roughly flat after reversing early losses of 0.4%. Luxury stocks led losses in Europe after Gucci-owner Kering SA warned about declining
sales, fueling worries about high-end consumer spending in China. Kering sank as much as 15%, with LVMH, Burberry Group and Christian Dior SE also getting hit. Among other names, Johnson Matthey Plc rose after agreeing to sell its medical device business and
announcing a buyback program. Lonza Group AG gained after it agreed to buy a manufacturing facility in the US from Roche Holding AG. Stoxx 600 -0.02%, DAX +0.2%, CAC -0.6%, FTSE 100 -0.2%. Chemicals +0.9%, Technology +0.8%, Utilities +0.7%. Luxury -2.4%, Banks
-0.8%, Energy -0.7%, Insurance -0.7%.

Asian stocks were mostly higher as Korean shares rose and Chinese stocks erased losses to end with modest gains. Chinese stocks rose after banks left five-year and one-year prime lending
rates unchanged. Shares of Indian tourism companies rose ahead of the start of key cricket tournament. Samsung jumped 5.6% after Nikkei Asia reported Nvidia is looking to buy its high-bandwidth memory chips. Taiwan’s foreign minister said that China has built
“enormous” military bases on three islands surrounding Taiwan’s main holding in the South China Sea, but Taipei is not looking to further escalate tensions in the strategic waterway. Vietnam +1.4%, Kospi +1.3%, Shanghai Composite +0.5%, CSI 300 +0.2%, Sensex
+0.1%, Hang Seng Index +0.1%.  ASX 200 -0.1%, Taiwan -0.4%, Thailand -0.7%. Japan was closed for Vernal Equinox Day

FIXED INCOME: 
 

Treasuries are slightly richer across the curve, led by gilts after benign UK CPI data drove a dovish re-pricing in Bank of England rate-cut expectations. US yields
are down 1bp-2bp across the curve with 10-year around 4.285% after reaching a weekly low. Today’s focus is on the potential for changes to policy members’ median projections for fed funds through 2026 and longer, with traders broadly holding a hawkish set-up
to the meeting. 2-year yield ~4.68%. The curve is flat ahead of the FOMC announcement.

METALS: 
   

Gold traded in a narrow range ahead of the FOMC decision, with policymakers due to present forecasts that could shed light on the timing of a pivot to monetary easing.
Most economists see policymakers penciling in three cuts this year with the first move in June, in line with markets’ current pricing. Spot gold -0.2%, silver -0.3%. 

ENERGY:   

Oil slipped after a two-day gain as investors awaited official data on US crude and product inventories and the outcome of a Federal Reserve policy meeting. Traders
were also weighing the supply implications of Ukraine’s attacks on Russian refiners. Russia’s seaborne crude exports gave up all of the previous week’s gains as maintenance work at the Baltic port of Primorsk and strong winds around the Pacific Coast hit shipments
from the two most important oil ports. China reported its first crude imports from Venezuela since 2019, according to customs figures released today. WTI -1%, Brent -0.9%, US Nat Gas -0.1%, RBOB -1.5%.

CURRENCIES:   

In currency markets, the yen fell against the euro and the dollar on speculation the Bank of Japan will keep its monetary policy accommodative even after it ended
the world’s last negative-interest-rate policy on Tuesday. The yen hit it lowest level versus the euro since 2008.  Sterling whipsawed after Britain’s inflation rate fell more sharply than expected. The Bank of England meets on rates tomorrow, but a move is
unlikely as policymakers say they need further evidence that price pressures will fall back sustainably. The dollar advanced for a fifth straight day, stronger versus all Group-of-10 peers ahead of the Federal Reserve’s policy decision. US$ Index +0.3%, GBPUSD
-0.25%, EURUSD -0.25%, USDJPY +0.5%, AUDUSD -0.2%, NZDUSD -0.4%, EURJPY +0.3%.

Spot Bitcoin +0.05%, Ethereum +1.5%.

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
• Antero Resources (AR) Raised to Overweight at JPMorgan; PT $30
• Best Buy (BBY) Raised to Outperform at Telsey; PT $95
• Birchcliff Energy (BIR CN) Raised to Buy at TD; PT C$6
• Braskem (BRKM5 BZ) ADRs Raised to Outperform at Grupo Santander; PT $8.20
• CarMax (KMX) Raised to Buy at Needham; PT $99
• Dlocal (DLO) Raised to Buy at Banco BTG Pactual; PT $20
• International Paper (IP) Raised to Buy at Citi; PT $46
• Kelt Exploration (KEL CN) Raised to Buy at TD; PT C$8
• RCM (RCM) Raised to Buy at Citi; PT $16
• Riot Platforms Inc (RIOT) Raised to Overweight at JPMorgan; PT $15
• Tencent Music (TME) ADRs Raised to Buy at Citi
• Triumph Group (TGI) Raised to Buy at Goldman; PT $18
• XPeng (XPEV) ADRs Raised to Outperform at CCB Intl; PT $15.90
• Downgrades
• Citi Trends (CTRN) Cut to Hold at Craig-Hallum; PT $27
• EQT Corp (EQT) Cut to Neutral at JPMorgan; PT $37
• Fusion Pharmaceuticals (FUSN) Cut to Sector Perform at RBC; PT $21
• Cut to Hold at JonesTrading
• Cut to Equal-Weight at Morgan Stanley
• GrowGeneration (GRWG) Cut to Market Perform at Oppenheimer
• Wells Fargo (WFC) Cut to Neutral at Citi; PT $63
• Initiations
• American Air (AAL) Rated New Buy at UBS; PT $19
• Autoliv (ALV) Rated New Hold at Baptista Research; PT $131.50
• BJ’s Wholesale (BJ) Rated New Hold at Baptista Research; PT $83.70
• Broadcom (AVGO) Reinstated Overweight at Barclays; PT $1,405
• Defi Technologies Inc (DEFI CN) Rated New Buy at Benchmark; PT C$2.25
• Delta Air Lines (DAL) Rated New Buy at UBS
• Elf Beauty (ELF) Rated New Underperform at Baptista Research
• Evercore (EVR) Rated New Hold at Citic Securities; PT $197
• Global Business Travel Group (GBTG) Rated New Buy at Baptista Research
• GoodRx Holdings (GDRX) Rated New Hold at Baptista Research; PT $7.90
• Janux Therapeutics (JANX) Rated New Overweight at Cantor; PT $100
• JetBlue (JBLU) Rated New Sell at UBS
• Klaviyo (KVYO) Rated New Outperform at FBN; PT $35
• NGEx Minerals (NGEX CN) Rated New Outperform at BMO; PT C$11
• Perficient (PRFT) Rated New Outperform at Baptista Research; PT $74.30
• Southwest Air (LUV) Rated New Buy at UBS; PT $36
• StepStone (STEP) Rated New Outperform at Oppenheimer; PT $48
• Tempur Sealy (TPX) Rated New Hold at Baptista Research; PT $59.90
• Vail Resorts (MTN) Rated New Hold at Baptista Research; PT $244.50

Data sources: Bloomberg, Reuters, CQG