Daily Game Plan

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

DATA/HEADLINES:  1:00ET 7 Year Note Auction

TODAY’S HIGHLIGHTS and News:  

• Mega Millions estimated $1.13 billion jackpot has one winning ticket, in New Jersey
• Rising Minimum Wage Risks Stoking Inflation, Says CBI Chief
• Robinhood announces a 3% cash back credit card
  
• NBCUniversal rescinded its hiring of former RNC Chair Ronna McDaniel
  

Global shares held steady as traders prepared for end-of-quarter rebalancing, in a holiday-shortened week that ends with the Federal Reserve’s preferred inflation
gauge. World markets nudged higher, aided by a rally in Japanese stocks as the yen sagged to its weakest since 1990. Meanwhile, China’s President Xi Jinping met with American business leaders in Beijing as the government tries to woo foreign investors.  The
European Central Bank is increasingly confident that inflation will fall back to its 2% target by mid-2025 as wage growth moderates, strengthening the case for lower interest rates, ECB board member Piero Cipollone said. ECB’s Kazaks said a “first rate cut
is nearing” and doesn’t object to a June cut.      

EQUITIES:  

US equity futures gained as investors awaited data that could provide clues about the timing of interest-rate cuts. The S&P 500’s advance is approaching 10% for a second straight quarter.
The US benchmark has only seen double-digit gains for two quarters in a row in five instances since 1950, according to data compiled by Bloomberg. With stocks set to cap another strong quarter, pension funds are likely to sell an estimated $32 billion in equities
to rebalance their positions, according to Goldman Sachs. The catastrophic bridge collapse that closed the Port of Baltimore to ship traffic is unlikely to trigger a major new supply chain crisis, due to ample and growing spare capacity at competing East Coast
ports, logistics experts say.   

Futures ahead of the bell: E-Mini S&P +0.35%, Nasdaq +0.4%, Russell 2000 +0.5%, DJI +0.35%

In pre-market trading, Merck (MRK) shares were up more than 4% after it won FDA approval for a new treatment for high blood pressure. Robinhood (HOOD) gains 5% after the company said
it is rolling out a credit card to US consumers. Forge Global (FRGE) falls 11% after the private securities marketplace operator reported 4Q revenue that missed estimates. GameStop (GME) slides 17% after reporting worse-than-expected results.  NCino (NCNO)
climbs 12% after the cloud banking software company gave a stronger than expected forecast. Novocure (NVCR) gains 30% after the drug developer said a late-stage trial of its treatment for patients with brain metastases met its primary endpoint. Nuvation Bio
(NUVB) jumps 16% after the biotechnology company received an upgrade to buy at Jefferies after the acquisition of AnHeart Therapeutics. One Group Hospitality (STKS) rises 12% after the company said it is buying Safflower Holdings, the owner of Benihana. Trump
Media (DJT) jumps 15%, putting its stock on track to extend gains after rallying 16% in its first trading day as a public company.

European gauges clung to Tuesday’s record high as Sweden’s Riksbank laid the groundwork for a rate cut as soon as May and fresh data showed eurozone economic confidence improving.  The
retail sector outperforms while energy and travel shares decline. Clothing retailer Hennes & Mauritz jumped as much as 14% after its profit beat estimates thanks to cost cuts, while payments firm Adyen NV got a boost from a broker upgrade. Banca Monte dei
Paschi di Siena fell after Italy sold about €650 million worth of shares as part of the government’s plan to divest from the bailed-out lender. DS Smith Plc rose after saying it’s in talks for a possible all-share offer from International Paper Co., setting
the stage for a bidding war with Mondi Plc. Stoxx 600 +0.1%, DAX +0.5%, CAC +0.3%, FTSE 100 -0.3%.

Asian stocks were mixed as Chinese shares fell while Japanese stocks surged on the yen’s drop to its lowest versus the dollar since 1990. BOJ board member Naoki Tamura reinforced the
dovish outlook regarding further tightening, saying the central bank should “move slowly but steadily toward policy normalization”.  The MSCI Asia Pacific Index gained 0.2% while trading in a narrow range. Alibaba fell after shelving IPO plans for its Cainiao
logistics arm in Hong Kong. EV giant BYD Co. and Anta Sports dropped after earnings reports. Australian shares extended gains after monthly inflation came in just below expectations. China’s industrial profits rose 10.2% year on year in the January-February
period, a sign the economy may be stabilizing. Hang Seng Index -1.4%, CSI 300 -1.2%, Kospi -0.1%. Nikkei 225 +0.9%, Sensex +0.7%, Singapore +0.6%, ASX 200 +0.5%.

FIXED INCOME: 
 

Treasuries are little changed after trading in narrow ranges through Asia session and European morning, leaving yields within 1bp of Tuesday’s closing levels. Core
European rates outperform as bunds hold gains following Spain CPI data that was slightly less than expected. With no data scheduled, US session focal points are 7-year note auction and comments from Fed’s Waller after the close. 10-year yields around 4.235%,
slightly cheaper on the day. Curve spreads also within 1bp of Tuesday’s close’

METALS: 
   

Gold rose for a third day, without any obvious catalyst. Investor focus shifts to US data later this week that could influence the Federal Reserve’s monetary-easing
trajectory. Traders are bracing for the central bank’s preferred inflation gauge on Friday when markets will be closed. It’s expected to show inflation probably remained uncomfortably high in February. Bets on the timing of the Fed’s pivot have driven a record-breaking
run in gold since mid-February. Spot gold +0.4%, silver +0.3%.

ENERGY:   

Oil prices fell for a second day on rising US crude inventories and signs Russia is struggling to get payment for oil shipments amid sanctions threats on related
banking flows.  Expectations for potential inaction by OPEC+ at its meeting next week is also seen as a headwind. OPEC+ is unlikely to make any oil output policy changes until a full ministerial gathering in June, three OPEC+ sources told Reuters. Brent may
hit $100 this year if Russia’s production cut isn’t balanced by counter-measures, JPMorgan said. WTI -0.6%, Brent -0.6%, US Nat Gas -1.6%, RBOB -0.05%.

CURRENCIES:   

In currency markets, the yen bounced from a 34-year low against the dollar after Japan’s finance minister said that authorities could take “decisive steps” against
yen weakness after the currency fell to previous intervention levels seen in 2022. The yen is the worst-performing major currency so far this year,  down more than 7% on the dollar. Sweden’s krona touched its weakest levels of the year against both the dollar
and euro after the Riksbank held its key rate steady at 4% but said inflationary pressures had eased enough for it to make the first of several policy rate cuts in the coming months. The dollar held mostly steady. US$ Index +0.05%, GBPUSD -0.1%, EURUSD -0.1%,
USDJPY -0.25%, AUDUSD -0.2%, NZDUSD -0.1%, USDCHF +0.3%.

Spot Bitcoin +0.6%, Ethereum +0.3%.

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
• 10X Genomics (TXG) Raised to Buy at CFRA
• GXO Logistics (GXO) Raised to Neutral at BNPP Exane; PT $50
• H World Group Ltd (HTHT) ADRs Raised to Buy at SWS Research
• Lundin Mining (LUN CN) Raised to Outperform at BMO; PT C$16
• Nuvation Bio (NUVB) Raised to Buy at Jefferies; PT $10
• Outlook Therapeutics Inc (OTLK) Raised to Buy at BTIG; PT $50
• Royal Gold (RGLD) Raised to Outperform at BMO; PT $158
• Tenet (THC) Raised to Outperform at Wolfe; PT $122
• Vermilion Energy (VET CN) Raised to Buy at TD; PT C$20
• Downgrades
• Berry Global (BERY) Cut to Hold at Truist Secs; PT $68
• C.H. Robinson (CHRW) Cut to Neutral at BNPP Exane; PT $76
• Crown Holdings (CCK) Cut to Hold at Truist Secs; PT $88
• FedEx (FDX) Cut to Underperform at BNPP Exane; PT $250
• First Industrial Realty (FR) Cut to Equal-Weight at Barclays
• Lowe’s (LOW) Cut to Neutral at DA Davidson; PT $270
• Travere Therapeutics Inc (TVTX) Cut to Neutral at Guggenheim
• Visa (V) Cut to Neutral at Redburn; PT $307
• Wells Fargo (WFC) Cut to Market Perform at KBW; PT $62
• Initiations
• Academy Sports & Outdoors (ASO) US Rated New Outperform at Baptista Research; PT $76.20
• Americold Realty Trust I (COLD) Rated New Sector Perform at Scotiabank
• Asbury Auto (ABG) Rated New Outperform at Baptista Research; PT $271
• Cabot Corp (CBT) Rated New Buy at Mizuho Securities; PT $104
• Cava Group (CAVA) Rated New Underperform at Baptista Research
• Community Trust Bancorp (CTBI) Rated New Buy at Janney Montgomery
• CSG Systems (CSGS) Rated New Outperform at RBC; PT $61
• CubeSmart (CUBE) Rated New Equal-Weight at Barclays; PT $48
• EastGroup (EGP) Rated New Equal-Weight at Barclays; PT $181
• Extra Space (EXR) Rated New Overweight at Barclays; PT $157
• GameStop (GME) Rated New Underperform at Baptista Research; PT $6.10
• Kilroy (KRC) Rated New Equal-Weight at Barclays; PT $38
• LENZ Therapeutics Inc (LENZ) Rated New Overweight at Piper Sandler
• Madison Square Garden Sports (MSGS) Rated New Buy at Baptista Research
• National Storage (NSA) Rated New Equal-Weight at Barclays; PT $39
• Ollie’s Bargain (OLLI) Rated New Hold at Baptista Research; PT $86
• Orion SA (OEC) Rated New Neutral at Mizuho Securities; PT $25
• Plymouth (PLYM) Rated New Equal-Weight at Barclays; PT $22
• Public Storage (PSA) Rated New Overweight at Barclays; PT $330
• Rexford Industrial (REXR) Rated New Underweight at Barclays; PT $45
• Spotify (SPOT) Rated New Buy at HSBC; PT $310
• Stag Industrial (STAG) Rated New Equal-Weight at Barclays; PT $40
• Terreno Realty (TRNO) Rated New Overweight at Barclays; PT $71
• Vornado Realty (VNO) Rated New Underweight at Barclays
• Western Digital (WDC) Rated New Outperform at Evercore ISI; PT $80
• WP Carey (WPC) Rated New Equal-Weight at Barclays; PT $55
• Yelp (YELP) Rated New Market Perform at Raymond James
• Yum China (YUMC) Rated New Buy at Founder Securities

Data sources: Bloomberg, Reuters, CQG