TODAY’S GAME PLAN: from the trading
desk, this is not research
DATA/HEADLINES: 9:00ET Fed’s Powell speaks at Fed Listens event; 12:15ET Fed’s Barr speaks; 4:00ET Fed’s Bostic
speaks
TODAY’S HIGHLIGHTS and News:
-
Israel said it captured hundreds of Hamas fighters in a Gaza hospital
-
Jerry Seinfeld is a billionaire for the first time
-
RUSSIA ADDS “LGBT MOVEMENT” TO EXTREMIST AND TERRORIST LIST – TASS
Global shares paused with MSCI’s global index up more than 2% for the week. Chinese shares skidded, weighing on markets broadly in Asia and dampening an equity rally
spurred by a surprise rate cut in Switzerland that had investors betting on who will ease policy next. Israel’s spy chief travels to Qatar today for ceasefire negotiations while the US plans to put a resolution calling for an immediate truce in Gaza to a vote
of the UN Security Council. Mexico’s central bank lowered rates by 25 bps to 11%, the first cut since 2021.
EQUITIES:
US equity futures turn red ahead of the bell, with indices headed for their best week of the year after a raft of central bank meetings indicated that a pivot toward looser policy is
on track. Apple steadied overnight after yesterday’s 4% decline after news that the US Justice Department and 16 attorneys general are suing the iPhone maker for violating antitrust laws. The House of Representatives and the Senate will scramble today to beat
a midnight government shutdown deadline by passing a $1.2 trillion bill keeping the government funded through September. FedEx shares surged 13% after the bell on Thursday after the company narrowed its fiscal 2024 profit forecast and announced a $5 billion
share buyback that helped offset less business from its largest customer, the US Postal Service. But Nike skidded 6% after it warned its revenue in the first half of fiscal 2025 would shrink as the world’s largest sportswear maker scales back on franchises
to save costs. Lululemon shares slid 12% after it warned of a slowdown in US store visits, which led to a lower-than-anticipated sales outlook.
Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.3%, Russell 2000 -0.1%, DJI -0.05%
In pre-market trading, FedEx (FDX) rallies 12% after the parcel carrier’s third-quarter results beat estimates. Peer UPS also gains ~3%. Nike (NKE) drops 6.2% after the sportswear company
warned investors that sales will decline by low single digits in the first half of the fiscal year. Reddit (RDDT) drops 3%, paring some of its first-day jump Thursday that saw shares soar 48% above their initial public offering price. Tesla (TSLA) declines
3.8% as the automaker has reduced electric car production at its plant in China. Best Buy (BBY US) shares rise 2% after the electronics retailer was upgraded to overweight from neutral at JPMorgan. Apple has held preliminary talks with Baidu about using the
Chinese company’s generative artificial-intelligence technology in its devices in China. BIDU +5%.
European gauges mixed, with the Stoxx 600 set to log a ninth straight week of gains, the longest winning streak since 2012. ECB’s Nagel commented that the “probability is increasing
we cut rates before the summer.” But investors shouldn’t draw the conclusion that the same will happen at every subsequent meeting, he said. Real estate led gains while technology and luxury stocks lagged. In Switzerland, skin-care company Galderma Group AG
surged in its trading debut. European sportswear retailers Adidas, Puma and JD Sports fell after Nike said sales will take a hit as it realigns merchandise to better match shoppers tastes. Stoxx 600 -0.2%, DAX -0.05%, CAC -0.5%, FTSE 100 +0.4%. Utilities and
REITs +1%, Telecom +0.6%. Technology -1.6%, Retail -0.7%.
Asian equities fell on sharp selling in Chinese shares as muted earnings from several companies sapped risk appetite. The MSCI Asia Pacific Index fell 0.4%, with Chinese technology stocks
including Alibaba, Meituan among the biggest contributors to losses. The Hang Seng Tech Index dropped 3.6%, with Li Auto down after giving lower guidance for the first quarter. Asian sportswear makers and retailers mostly fall after disappointing outlooks
from Nike and Lululemon. Meanwhile, stocks recovered in India, Taiwan and Japan to help the regional gauge trim early losses. Japanese shares extended gains, with the Nikkei 225 Index notching a fresh record close. Japanese core inflation accelerated to 2.8%
in February, matching estimates. Hang Seng Index -2.2%, Philippines -1.2%, CSI 300 -1%, Kospi -0.2%, ASX 200 -0.15%, Singapore -0.1%. Taiwan +0.15%, Nikkei 225 +0.2%, Sensex +0.3%, Vietnam +0.4%, Topix +0.6%.
FIXED INCOME:
Treasuries hold small gains as US session gets under way. Today’s highlight is Fed Chair Powell’s opening remarks at a Fed Listens event in Washington. Treasury yields
richer by 2bp to 3bp across the curve with 10-year around 4.24%. Curve spreads remain within 1bp of Thursday’s closing levels. Next week, Treasury auction cycle starts Monday, including 2-, 5- and 7-year notes for a combined $176B.
METALS:
Gold fell as the dollar continued to strengthen, following a volatile session on Thursday where the precious metal reached a new record high before retreating as
the US dollar surged on upbeat economic data. Gold is still headed for a weekly gain, as investors become more optimistic that US policymakers are preparing to lower borrowing costs later this year. Spot gold -0.5%, silver -0.2%.
ENERGY:
Oil prices fluctuated with traders assessing the outlook for global interest rates and geopolitical tensions in the Middle East. Crude oil prices were lower amid
a possible ceasefire in Gaza, which could ease geopolitical tensions in the Middle East. A ceasefire in Gaza may “encourage the Houthis to stand down and allow oil tankers to pass through the Red Sea, which would also be a positive development in terms of
helping to balance out the supply and demand dynamics,” IG analysts said. The US Energy Information Administration now expects significantly less global oil production than consumption through the first half of 2024, requiring draws on world petroleum stocks.
WTI -0.05%, Brent -0.1%, US Nat Gas -0.4%, RBOB +0.2%.
CURRENCIES:
In currency markets, the dollar rose for a second day and is set for its best week since January, as an unexpected rate cut by the Swiss National Bank spurred concerns
that other major central banks will cut policy rates faster than the Fed. The Chinese yuan fell to a four-month low on expectations of monetary easing which prompted intervention buy State Banks. The yen was little changed, as Japan’s inflation accelerated
to the quickest pace in four months. The Swiss franc fell to a four-month low versus the dollar, extending yesterday’s 1% decline. US$ Index +0.4%, GBPUSD -0.5%, EURUSD -0.4%, USDJPY -0.1%, AUDUSD -0.9%, NZDUSD -0.7%, USDNOK +1%, USDSEK +0.9%.
Spot Bitcoin -1.7%, Ethereum -2.2%. Bitcoin has peeled back more than 10% from its all-time high as the appetite for fledgling spot Bitcoin exchange-traded funds moderates. JPMorgan
strategists warned the retreat has room to run. The group of 10 spot Bitcoin ETFs is on track to record its biggest weekly outflow since the products debuted on Jan. 11.
TECHNICAL LEVELS:
ESM24 |
10 Year Yield |
April Gold |
May WTI |
Spot $ Index |
|
Resistance |
5400.00 |
5.250% |
2295.8 |
89.85 |
108.000 |
|
5380.00 |
5.000% |
2260.0 |
88.00 |
107.350 |
|
5351.00 |
4.700% |
2235.0 |
85.75 |
105.900 |
|
5323.00 |
4.550% |
2221.0 |
84.60 |
104.975 |
|
5313.00 |
4.355% |
2203.0 |
83.30 |
104.425 |
Settlement |
5302.50 |
2184.7 |
81.07 |
||
|
5288.00 |
4.200% |
2150.0 |
80.85 |
103.690 |
|
5257.00 |
4.155% |
2130.0 |
78.37 |
103.510 |
|
5248.00 |
4.000% |
2098.0 |
77.65 |
102.280 |
|
5231.00 |
3.780% |
2076.4 |
76.40 |
101.550 |
Support |
5208.00 |
3.640% |
1995.5* |
74.15 |
100.615 |
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
- American Homes (AMH) Raised to Buy at Citi; PT $41
- Best Buy (BBY) Raised to Overweight at JPMorgan; PT $101
- Cutera (CUTR) Raised to Market Perform at William Blair
- Essential Properties (EPRT) Raised to Buy at Citi; PT $28.50
- Foot Locker (FL) Raised to Neutral at Citi
- Huya (HUYA) ADRs Raised to Accumulate at CLSA; PT $5.10
- James River Group (JRVR) Raised to Buy at Compass Point; PT $12
- Macerich (MAC) Raised to Neutral at Citi; PT $17
- Omega Healthcare (OHI) Raised to Buy at Citi; PT $35
- Park Hotels (PK) Raised to Buy at Citi; PT $20
- Schwab (SCHW) Raised to Outperform at Cowen; PT $87
- Shoe Carnival (SCVL) Raised to Buy at Williams Trading; PT $40
- Southern Copper (SCCO) Raised to Buy at Jefferies; PT $130
- Tanger Inc (SKT) Raised to Buy at Citi; PT $33
- TriplePoint Venture Growth BDC (TPVG) US Raised to Neutral at Compass Point; PT $8.75
- U.S. Bancorp (USB) Raised to Buy at Compass Point; PT $49
- Verizon (VZ) Raised to Neutral at Redburn; PT $38.86
- Vesta (VESTA* MM) ADRs Raised to Buy at Goldman; PT $42
- Downgrades
- Canadian General Investments (CGI CN) Cut to Hold at TD; PT C$165
- CGI Inc (GIB/A CN) Cut to Hold at TD; PT C$165
- COPT Defense Properties (CDP) Cut to Neutral at Citi; PT $25
- Couche-Tard (ATD CN) Cut to Sector Perform at National Bank; PT C$83
- FactSet (FDS) Cut to Equal-Weight at Barclays; PT $460
- Invitation Homes (INVH) Cut to Neutral at Citi; PT $39
- Kimco Realty (KIM) Cut to Neutral at Citi; PT $20
- Liberty SiriusXM (LSXMA) Cut to Neutral at Seaport Global Securities
- Martin Marietta (MLM) Cut to Neutral at JPMorgan; PT $600
- Nike (NKE) Cut to Sector Perform at RBC; PT $100
- Nkarta (NKTX) Cut to Outperform at Raymond James
- Papa John’s (PZZA) Cut to Neutral at BTIG
- PBF Energy (PBF) Cut to Neutral at Mizuho Securities; PT $58
- Pentair (PNR) Cut to Neutral at Goldman; PT $91
- Power of Canada (POW CN) Cut to Hold at TD; PT C$42
- Precigen (PGEN) Cut to Underweight at JPMorgan
- Stem Inc (STEM) Cut to Neutral at Goldman; PT $2.50
- Valero Energy (VLO) Cut to Neutral at Mizuho Securities; PT $173
- Vulcan Materials (VMC) Cut to Neutral at JPMorgan; PT $270
- Initiations
- AGNC Investment (AGNC) Rated New Buy at JonesTrading; PT $10.75
- Array (ARRY) Rated New Market Perform at BMO; PT $16
- Boston Beer (SAM) Rated New Overweight at Piper Sandler; PT $350
- Calian Group (CGY CN) Reinstated Buy at Echelon Wealth; PT C$74
- Constellation Brands (STZ) Rated New Overweight at Piper Sandler
- D.R. Horton (DHI) Reinstated Buy at William O’Neil
- Fortrea (FTRE) Rated New Neutral at Baird; PT $43
- Gitlab (GTLB) Rated New Overweight at Capital One; PT $72
- Humana (HUM) Rated New Market Perform at Raymond James
- Mobile-Health Network Solutions (MNDR) US Rated New Buy at Litchfield Hills
- Molson Coors (TAP) Rated New Neutral at Piper Sandler; PT $69
- NEXTracker (NXT) Rated New Market Perform at BMO; PT $69
- Oscar Health (OSCR) Rated New Outperform at Raymond James; PT $20
- Salesforce Inc (CRM) Rated New Buy at Mirae Asset Daewoo; PT $378.24
- Two Harbors (TWO) Rated New Hold at JonesTrading
- Veralto (VLTO) Rated New Buy at Goldman; PT $104
Data sources: Bloomberg, Reuters, CQG
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