Daily Game Plan

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

DATA/HEADLINES:  1:00ET 3-Year Note Auction

No US economic data or Fed speakers scheduled for the session

TODAY’S HIGHLIGHTS and News:  

• Tesla reached a settlement over a fatal crash involving Autopilot
• US Small-Business Optimism Slides To 11-Year Low
• Champions League quarter-finals will go ahead as scheduled amid an alleged terror threat

Global shares steadied ahead of Wednesday’s US inflation report and a crucial European Central Bank meeting on Thursday. While markets now favor just two US rate
cuts this year, former Fed St. Louis President James Bullard said three reductions remain “the base case.”  Industrial metals prices extended their gains amid expectations of a worldwide manufacturing rebound. Bank of Japan Governor Ueda said the central bank
must consider whittling down stimulus further if inflation continues to accelerate, but ultra-loose monetary policy must be maintained for the time being since trend inflation has yet to reach its 2% target. Meanwhile, Hamas rejected an Israeli ceasefire proposal
made at talks in Cairo, a senior Hamas official said on Monday, and Israeli Prime Minister Benjamin Netanyahu said a date was set for an invasion of Rafah.   

EQUITIES:  

US equity futures were muted after Monday’s flat close when trading was the thinnest since Christmas. Caution dominated sentiment before Wednesday’s inflation report, and for the start
of the first-quarter earnings season. The rally in oil and metals is intensifying fears of a commodity-driven inflation resurgence. US small business optimism fell to the lowest level in more than a decade, as the future path of inflation remains a significant
concern. Janet Yellen wrapped up four days of talks in China and announced a new set of talks with China that will start next week in Washington.   

Futures ahead of the bell: E-Mini S&P +0.25%, Nasdaq +0.3%, Russell 2000 +0.3%, DJI +0.1%

In pre-market trading, Alkermes (ALKS) rises 6% after the drugmaker announced positive topline results from a Phase 1b study. American Eagle Outfitters (AEO) gains 3.8% after JPMorgan
raised its rating on the apparel retailer to overweight. Blackberry (BB) gains 2.4% after the Canadian software company announced a robotics collaboration with AMD. ChargePoint (CHPT) falls 3% as Goldman Sachs downgraded the provider of electric vehicle charging
solutions to sell on expectations of a slower EV market in the US. Inmode (INMD) slips 9% after cutting its revenue guidance for the full year. Maxeon Solar (MAXN) drops 14% after the solar-panel maker’s first-quarter revenue forecast missed estimates. Tilray
Brands (TLRY) falls 13% after the cannabis company cut its adjusted Ebitda guidance for the full year. Vincerx Pharma (VINC) plunges 63% after the biotech company gave early efficacy data from a trial of its experimental cancer treatment. Freeport-McMoRan
(FCX) gained 3% after BofA Securities upgrades the stock from Neutral to Buy and announces $59 price target.

European gauges slipped as traders trimmed wagers on how many interest rate cuts the Federal Reserve could deliver this year and the upcoming US inflation print kept investors on the
sidelines. Mining stocks were a bright spot as iron ore headed for its biggest two-day rally in more than two years. European defense stocks fell as Goldman said valuations are probably too high. The ECB’s quarterly Bank Lending Survey showed that demand for
corporate loans in the euro area saw a “substantial decline” in the first quarter amid elevated borrowing costs that probably won’t be cut until the middle of the year. Among individual stock movers, BioMerieux rallied in Paris after its sales for the first
quarter rose 6.6%. Stoxx 600 -0.05%, DAX -0.5%, CAC -0.3%, FTSE 100 +0.2%. Basic Resources +1.4%, Energy +0.9%, Food & Bev +0.5%. Construction -0.5%, Retail -0.4%, Banks -0.3%.

Asian stocks climbed for a second day, as TSMC (+4.6%) helped drive gains in tech shares on investor excitement over its US production plans for $11.6 billion in grants and loans to help
the chipmaker build factories. The MSCI Asia Pacific Index climbed 0.7%, with Taiwan leading gains across the region, as its benchmark index hit another record. Chinese stocks traded in Hong Kong rose, while mainland gauges closed little changed. Beyond tech,
miners also rose as prices of iron ore and copper advanced amid hopes over demand in China. Macau casino operators outperformed after a report that the city received over 1 million visitors during Easter and Qingming festival. Thai residential property stocks
rose on a report about a government plan for new measures to help the real estate market. Thailand and Taiwan +1.9%, Nikkei +1.1%, Vietnam +1%, Singapore +0.7%, Hang Seng Index +0.6%, ASX 200 +0.4%. Sensex -0.1%, CSI 300 -0.1%, Kospi -0.5%.

FIXED INCOME: 
 

Treasuries climbed, clawing back some of Monday’s slump in the buildup to US inflation figures that are key to the debate over when the Federal Reserve will start
to cut interest rates. The Fed’s Bullard said he’s expecting three interest-rate cuts this year as inflation moves toward the central bank’s target while the economy remains resilient. Treasuries are richer across the curve by at least 2bp, tracking bigger
gains in core European rates. Gilt and bund futures remain near best levels of the day after UK 20-year bond sale drew record demand. Auctions in Germany and Austria were also well received. US session highlights include $58 billion 3-year note auction, first
of three coupon sales this week. US 10-year yield is around 4.39%, 2-year yield ~4.77%.

METALS: 
   

Gold extended its bull run to a fresh record ahead of the next set of US inflation data on Wednesday that could provide insight into the Federal Reserve’s next steps.
Economists surveyed by Bloomberg expect that March’s inflation print may show some signs of easing, a scenario that would provide the Federal Reserve with more wiggle room to cut rates.  Gold is up more than 18% since mid-February, a move that has left some
investors puzzled because of the lack of any obvious trigger — especially given traders’ conviction on three quarter-point rate cuts is fast fading, with markets now favoring just two cuts this year. Spot gold +0.5%, Silver +0.4%, Copper +0.3%. 

ENERGY:   

Oil prices traded near a five-month high as investors weighed simmering tensions in the Middle East and persistent supply concerns. Israel said progress has been
made in negotiations for a cease-fire in Gaza, but Hamas denied the claim. While optimism around cease-fire talks pressured crude in Monday’s session, PM Netanyahu said a date for the invasion of Rafah had been set. Morgan Stanley lifted its crude price forecasts
this year to $92, citing higher geopolitical risks. WTI -0.1%. Brent +0.1%, US Nat Gas +2.2%, RBOB +0.6%.

CURRENCIES:   

In currency markets, the dollar traded mixed versus its Group-of-10 peers and within tight ranges as the market is in waiting mode ahead of Wednesday’s CPI data.
The yen hovered near a 34-year low and around the closely watched 152 level in USDJPY that many say will trigger Japanese authorities to act. Japanese Finance Minister Suzuki said authorities would not rule out any options in dealing with excessive yen moves.
US$ Index -0.1%, GBPUSD +0.25%, USDJPY -0.02%, EURUSD +0.1%, AUDUSD +0.3%, USDNOK -0.1%, USDCHF -0.25%, NZDUSD +0.4%.

Spot Bitcoin -1.3%, 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
• Ally Financial (ALLY) Raised to Buy at BofA
• American Eagle (AEO) Raised to Overweight at JPMorgan; PT $31
• Chemours (CC) Raised to Outperform at BMO; PT $34
• Digital Realty (DLR) Raised to Overweight at Wells Fargo; PT $155
• Encore Energy (EU CN) Raised to Buy at Canaccord; PT C$8
• First Horizon (FHN) Raised to Outperform at RBC; PT $18
• Freeport (FCX) Raised to Buy at BofA; PT $59
• GE (GE) Raised to Buy at Cowen
• Hudbay Minerals (HBM CN) Raised to Buy at BofA
• Hyperfine (HYPR) Raised to Buy at Jefferies; PT $1
• LPL Financial (LPLA) Raised to Overweight at Morgan Stanley; PT $315
• MacroGenics (MGNX) Raised to Buy at Cowen
• Molson Coors (TAP) Raised to Buy at Goldman; PT $75
• Nasdaq Inc. (NDAQ) Raised to Overweight at Morgan Stanley; PT $80
• U.S. Steel (X) Raised to Outperform at Wolfe
• Downgrades
• American Express (AXP) Cut to Equal-Weight at Barclays; PT $221
• Apartment Income REIT (AIRC) Cut to Neutral at Janney Montgomery
• Broadstone Net Lease (BNL) Cut to Peerperform at Wolfe
• Cboe (CBOE) Cut to Equal-Weight at Morgan Stanley; PT $199
• ChargePoint (CHPT) Cut to Sell at Goldman; PT $1.50
• Cleveland-Cliffs (CLF) Cut to Underperform at Wolfe
• Cushman & Wakefield (CWK) Cut to Peerperform at Wolfe
• Danimer Scientific (DNMR) Cut to Neutral at Piper Sandler; PT $1.25
• Jones Lang (JLL) Cut to Peerperform at Wolfe
• Karora Resources Inc (KRR CN) Cut to Hold at Cantor; PT C$5.90
• Maxeon Solar (MAXN) Cut to Market Perform at Raymond James
• Model N (MODN) Cut to Hold at Needham
• Perion (PERI) Cut to Neutral at Roth MKM; PT $13
• Sensata (ST) Cut to Neutral at Goldman; PT $36
• Wells Fargo (WFC) Cut to Neutral at Compass Point; PT $64
• Initiations
• Aflac (AFL) Rated New Underperform at Autonomous; PT $75
• Alpine Immune (ALPN) Rated New Buy at Guggenheim; PT $55
• Amkor Technology (AMKR) Rated New Buy at Needham; PT $40
• Amphenol (APH) Rated New Hold at Jefferies; PT $125
• AvidXchange (AVDX) Rated New Market Perform at KBW; PT $13.50
• Axalta (AXTA) Rated New Hold at Baptista Research; PT $37.10
• Baytex Energy (BTE CN) Reinstated Market Perform at BMO; PT C$6
• Bitdeer Technologies Group (BTDR) US Rated New Buy at Rosenblatt Securities Inc; PT $10.50
• Brighthouse Financial (BHF) Rated New Underperform at Autonomous
• Broadcom (AVGO) Rated New Buy at President Capital Management
• Cisco (CSCO) Resumed Overweight at Morgan Stanley; PT $58
• CNO Financial (CNO) Rated New Neutral at Autonomous; PT $29
• Coeur Mining (CDE) Rated New Buy at Roth MKM; PT $5.40
• Corebridge Financial (CRBG) Rated New Outperform at Autonomous; PT $35
• Crew Energy (CR CN) Reinstated Market Perform at BMO; PT C$5.25
• Enliven Therapeutics (ELVN) Rated New Buy at Mizuho Securities; PT $34
• F&G Annuities & Life (FG) Rated New Neutral at Autonomous; PT $44
• FedEx (FDX) Rated New Buy at Fubon; PT $333
• Gitlab (GTLB) Rated New Overweight at Wells Fargo; PT $70
• Globe Life (GL) Rated New Outperform at Autonomous; PT $133
• Kelt Exploration (KEL CN) Reinstated Outperform at BMO; PT C$8.50
• Kiwetinohk Energy (KEC CN) Reinstated Outperform at BMO; PT C$17
• Lincoln National (LNC) Rated New Neutral at Autonomous; PT $35
• Littelfuse (LFUS) Rated New Hold at Jefferies; PT $260
• Logan Energy (LGN CN) Rated New Outperform at BMO; PT C$1.25
• Lucero Energy Corp (LOU CN) Reinstated Market Perform at BMO
• Methode Electronics (MEI) Rated New Hold at Jefferies; PT $12
• MetLife (MET) Rated New Outperform at Autonomous; PT $84
• Monday.com (MNDY) Rated New Overweight at Wells Fargo; PT $260
• NB (NBBK) Rated New Overweight at Piper Sandler; PT $17
• nCino (NCNO) Rated New Outperform at KBW; PT $41
• NewMarket (NEU) Rated New Hold at Baptista Research; PT $651
• Newpark Resources (NR) Rated New Buy at B Riley; PT $10
• NuVista Energy (NVA CN) Reinstated Outperform at BMO; PT C$17
• Obsidian Energy Ltd (OBE CN) Reinstated Outperform at BMO; PT C$16.50
• Option Care Health (OPCH) Rated New Outperform at Baptista Research
• Paramount Resources (POU CN) Reinstated Outperform at BMO; PT C$37
• Permian Resources (PR) Rated New Strong Buy at Raymond James; PT $24
• Principal Financial (PFG) Rated New Neutral at Autonomous; PT $85
• Prudential Financial (PRU) Rated New Underperform at Autonomous
• Reinsurance Group (RGA) Rated New Outperform at Autonomous; PT $228
• Riskified (RSKD) Rated New Market Perform at KBW; PT $5.75
• Rubellite Energy (RBY CN) Reinstated Outperform at BMO; PT C$4
• Sensata (ST) Rated New Hold at Jefferies; PT $40
• Spartan Delta (SDE CN) Reinstated Outperform at BMO; PT C$5.50
• Structure Therapeutics (GPCR) ADRs Rated New Overweight at Cantor
• Taysha Gene (TSHA) Rated New Overweight at Piper Sandler; PT $9
• TE Connectivity (TEL) Rated New Buy at Jefferies; PT $180
• Terawulf (WULF) Rated New Buy at Rosenblatt Securities Inc; PT $4.20
• Toast (TOST) Rated New Market Perform at KBW; PT $25
• Unum (UNM) Rated New Underperform at Autonomous; PT $52
• Voya Financial (VOYA) Rated New Outperform at Autonomous; PT $87

Data sources: Bloomberg, Reuters, CQG