Daily Game Plan

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

DATA/HEADLINES:  8:25ET Fed’s Bostic speaks; 9:05ET Fed’s Goolsbee speaks; 10:00ET New Home Sales; 10:30ET Dallas
Fed Manf. Activity, Fed’s Cook speaks; 1:00ET 2-year note auction

Later this week are durable goods orders, consumer confidence, 4Q GDP revision, University of Michigan sentiment, and personal income/spending with PCE deflators.

TODAY’S HIGHLIGHTS and News:  

• Explosions over central Kyiv today
• 900 people were evacuated from the Izmailovsky CDC in Moscow due to a bomb threat
• China Blocks Use Of Intel, AMD Chips In Government Computers
• Kamala Harris warned Israel against a major attack on the Gazan city of Rafah
  

Global shares nudged lower with investors in wait-and-see mode ahead of a busy week of economic data that will include the Fed’s preferred inflation gauge due Friday
when many markets will be closed for a holiday. Other macro highlights around the world this week, includes Japanese employment and manufacturing data. Price readings are also due in Australia, France, Italy and Spain, offering clarity on the direction of
global monetary policy. Meanwhile, the Philippines protested the “aggressive actions” by Chinese vessels in the South China Sea over the weekend, summoning Beijing’s envoy in Manila. Russian authorities showed footage of four men charged in court with carrying
out the deadly Moscow concert hall attack after interrogations that traced their origins to Tajikistan.   

EQUITIES:  

US equity futures are lower after last week’s strong rally as investors assessed the outlook for corporate earnings ahead of key data later in the week that may give further clues on
the Federal Reserve’s policy path. Apple, Google and Meta face the risk of potentially hefty fines as the EU opened a full-blown investigation into the firms’ compliance with strict new laws reining in the power of Big Tech. The probes come with the risk of
penalties of up to 10% of global revenue. Peter Thiel, Jeff Bezos and Mark Zuckerberg are among the insiders who’ve sold hundreds of millions of dollars of their companies’ shares this quarter, in a signal that recent stock market exuberance may be peaking,
the FT said.           

Futures ahead of the bell: E-Mini S&P -0.35%, Nasdaq -0.6%, Russell 2000 -0.1%, DJI -0.2%

In pre-market trading, Intel (INTC -3.5%) and Advanced Micro Devices (AMD -6%) declined after a Financial Times report said China was seeking to limit the use of US-made chips in government
computers. United Airlines fell more than 3% after the Federal Aviation Administration’s move to increase its oversight of the carrier after a series of recent safety incidents. United is said to face temporary FAA limits on adding routes and flying customers
on newly delivered aircraft. Apple (AAPL) and Alphabet (GOOGL) both slip less than 1% as investors continue to monitor regulatory headwinds facing the two tech giants. Canopy Growth (CGC) gains 11% and is set to extend gains for a seventh session. Esperion
(ESPR) climbs 20% after the FDA on Friday approved label expansions. Masimo (MASI) jumps 12% after the medical-equipment group said late Friday that it will evaluate a proposed separation of its consumer business. Boeing gains 3% after CEO Dave Calhoun announced
he is stepping down.

European shares edge lower with the Stoxx Europe 600 index dipping 0.3% following nine straight weeks of gains, the longest run in 12 years. Shares in European defense firms rose following
a terrorist attack in Moscow on Friday evening that killed at least 137 people, in an assault claimed by the Islamic State. Dassault Aviation SA climbed 4.5% and Rheinmetall AG was up 3.7%. Swedish landlord SBB jumped after buying back a batch of bonds at
a 60% discount. In London, Direct Line Insurance Group plunged 13% after Ageas said on Friday it won’t make a third takeover offer. European equity valuations are not yet over-stretched, according to Goldman Sachs strategists who forecast the Stoxx Europe
600 could still rise about 6% over the next 12 months. Stoxx 600 -0.3%, DAX -0.1%, CAC -0.5%, FTSE 100 -0.4%. Technology -0.6%, Media -0.6%, Construction and Retail sectors -0.5%. Energy +00.3%, Autos +0.2%.

Asian stocks fell, dragged by a selloff in Japan following currency warnings by a top official. The MSCI Asia Pacific Index dropped 0.6%, erasing an early gain. Sony and Samsung were
among the biggest drags, while China delivery firm Meituan gained after it reported better-than-expected earnings. Japanese equities declined as some investors took profit following the Nikkei 225 Stock Average’s move to a record high last week despite the
central bank ending its negative-rate policy. Chinese stocks edged lower as Premier Li Qiang downplayed investor concerns of challenges facing the economy, saying Beijing was stepping up policy support to spur growth. Topix -1.25%, Vietnam -1.1%, Shanghai
Composite -0.7%, Singapore -0.6%, CSI 300 -0.5%, Philippines -0.4%, Sensex -0.4%, Hang Seng Index -0.15%. ASX 200 +0.5%.

FIXED INCOME: 
 

Treasury yields ticked higher ahead of US 2yr, 5yr, and 7yr supply this week. US session includes 2-year note auction a day earlier than normal and a handful of Fed
speakers. Treasury yields cheaper by 2bp to 4bp across the curve with losses led by belly, flattening 5s30s spread by 1.5bp on the day; 10-year yields around 4.24%.  Holiday-shortened week’s auction cycle begins with $66b 2-year note sale at 1pm; $67b 5-year
and $43b 7-year follow Tuesday and Wednesday.

METALS: 
   

Gold moved higher as investors awaited inflation reports to gauge the likelihood of central banks reducing interest rates. The upcoming release of the core personal
consumption expenditures index by the Federal Reserve, along with consumer-price figures from France, Italy, Spain, and Australia, is expected to provide insights into inflation trends.  Spot gold +0.4%, silver +0.1%. 

ENERGY:   

Oil prices inch higher on escalating geopolitical unrest following attacks in Russia and a bullish Goldman Sachs Group note on the outlook for commodities.  Goldman
expects commodities to return 15% this year as borrowing costs come down, manufacturing recovers, and geopolitical risks persist. A terrorist attack in Moscow over the weekend left more than 130 people dead, while continued drone strikes by Ukraine are crimping
Russia’s crude-refining capabilities. WTI +0.3%, Brent +0.3%, US Nat Gas -2.5%, RBOB +0.05%.

CURRENCIES:   

In currency markets, the dollar fell following its biggest weekly gain since January, while the yen got a boost after an official warned against speculative moves.
Japan’s top currency diplomat said the yen’s current weakness did not reflect fundamentals, adding to the rhetoric of government officials who have stepped up warnings in recent days over the currency’s decline. The yuan climbed as China’s central bank set
a stronger-than-expected daily reference rate. The Swedish krona underperformed peers on expectation of a dovish central bank decision later in the week.  US$ Index -0.2%, GBPUSD +0.3%, EURUSD +0.2%, USDJPY -0.1%, AUDUSD +0.2%, NZDUSD -0.4%.

Spot Bitcoin +1.4%, Ethereum +1.1%.

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
• Avis Budget (CAR) Raised to Buy at Northcoast; PT $155
• Cincinnati Financial (CINF) Raised to Outperform at BMO; PT $135
• Disney (DIS) Raised to Overweight at Barclays; PT $135
• Foot Locker (FL) Raised to Outperform at Evercore ISI; PT $32
• GoodRx Holdings (GDRX) Raised to Overweight at Wells Fargo; PT $10
• Lufax (LU) ADRs Raised to Buy at Huatai Research; PT $6.50
• Masimo (MASI) Raised to Overweight at Wells Fargo; PT $160
• Petrobras (PETR4 BZ) ADRs Raised to Buy at HSBC; PT $18
• Sotera (SHC) Raised to Buy at Jefferies; PT $15.50
• Tempur Sealy (TPX) Raised to Buy at Loop Capital; PT $75
• TMX Group (X CN) Raised to Outperform at BMO; PT C$41
• Downgrades
• Banco de Chile (CHILE CI) ADRs Cut to Market Perform at Itau BBA; PT $26
• BigCommerce (BIGC) Cut to Underperform at BofA; PT $7.50
• BWX Technologies (BWXT) Cut to Hold at Truist Secs
• Coinbase (COIN) Cut to Hold at Punto Casa de Bolsa; PT $217.57
• CS Disco (LAW) Cut to Neutral at JPMorgan; PT $9
• Curtiss-Wright (CW) Cut to Hold at Truist Secs; PT $240
• Financial Institutions (FISI) Cut to Neutral at Piper Sandler
• Kinder Morgan (KMI) Cut to Hold at Truist Secs; PT $20
• LexinFintech (LX) ADRs Cut to Accumulate at CLSA; PT $2.20
• NIO Inc. (NIO) ADRs Cut to Neutral at Mizuho Securities; PT $5.50
• Rivian (RIVN) Cut to Neutral at Mizuho Securities; PT $12
• Roscan Gold (ROS CN) Cut to Hold at Paradigm Capital
• Scotts Miracle-Gro (SMG) Cut to Market Perform at Raymond James
• Telus (T CN) Cut to Sector Perform at Scotiabank
• Tesla (TSLA) Cut to Neutral at Mizuho Securities; PT $195
• Initiations
• Bank of America (BAC) Rated New Accumulate at Phillip Secs; PT $40.82
• Dick’s Sporting (DKS) Rated New Underperform at Baptista Research
• Genprex (GNPX) Rated New Buy at HC Wainwright; PT $10
• JPMorgan (JPM) Rated New Buy at Phillip Secs; PT $231.19
• Kinetik (KNTK) Rated New Outperform at RBC; PT $40
• Lithia & Driveway (LAD) Rated New Outperform at Baptista Research
• New York Times Co. (NYT) Rated New Hold at Baptista Research
• Sagimet Biosciences (SGMT) Rated New Outperform at Leerink; PT $26
• Super Micro Computer (SMCI) Rated New Overweight at JPMorgan; PT $1,150
• Texas Roadhouse (TXRH) Rated New Hold at Baptista Research; PT $163
• UiPath (PATH) Rated New Outperform at Baptista Research; PT $27.70
• Wells Fargo (WFC) Rated New Accumulate at Phillip Secs; PT $60.83
• Wheaton Precious Metals (WPM CN) Rated New Buy at Baptista Research

Data sources: Bloomberg, Reuters, CQG