Daily Game Plan

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

DATA/HEADLINES:  8:30ET Empire Manufacturing, Retail Sales,
Fed’s Williams on BTV; 10:00ET Business Inventories, NAHB Housing Market Index

US RETAIL SALES INCREASED 0.7% IN MARCH; EST. 0.4%

TODAY’S HIGHLIGHTS and News:  

• IRS has paid $580mm this year to auto dealers as reimbursement for EV tax credit payments
• Iran launched more than 300 drones and missiles against military targets in Israel
• The US reiterated its “ironclad” support to Israel’s security
  
• Tesla plans to cut more than 10% of its global workforce
  
• Trump’s criminal hush money trial begins in New York
  

Global shares are modestly higher as investors speculated that diplomatic efforts will help prevent the conflict between Iran and Israel from escalating. More than
100 ballistic missiles were fired at Israel on Saturday as well as land attack cruise missiles and drones, in an attack that President Biden described as “unprecedented.” The US intervened to help Israel shoot down nearly all of the incoming munitions which
caused little actual damage. Iran’s attack was in retaliation for what it said was an Israeli attack on its Damascus consulate. Investors took some comfort after the Iranian mission to the United Nations said the issue “can be deemed concluded.” The US and
other nations also called for restraint in an effort to head off a full-blown regional war. Focus shifts to another busy week of economic data and company earnings, while the International Monetary Fund’s spring meetings get underway.

EQUITIES: 

US equity futures ticked higher, after the heavy selloff on Friday that had been fueled by a multitude of issues, including Iran’s missile and drone strike on Israel and a spike in equity
market volatility, as well as disappointing bank earnings. Earnings season continues today with Goldman Sachs Group and Charles Schwab reporting. With investor positioning looking “very stretched” and indexes not far from all-time highs, it’s unlikely that
an upbeat earnings season can keep powering stocks higher, according to JPMorgan strategists.   

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

In pre-market trading, Goldman Sachs gained 3.5% after reporting profit rose 28% in the first quarter, buoyed by a recovery in debt underwriting and dealmaking that boosted its investment
banking unit.  Apple slipped 1.5% after iPhone shipments slid a worse-than-projected 10% in the first quarter, as sales flagged in China. Alcoa (AA) gains 4% after the US and UK imposed new restrictions on trading Russian aluminum, copper and nickel. Astera
Labs (ALAB) advances 1.9% after several brokers initiated coverage on the chipmaker with buy-equivalent recommendations. Coupang (CPNG) gains 2.5% as Citi upgrades its rating to buy. Neumora Therapeutics (NMRA) tumbles 14% after saying the Phase 1 trial of
NMRA-266 was put on hold. Salesforce (CRM) falls 2.6% after a report that the software company is pursuing a major acquisition after fending off activist investors. Bloomberg reported that the company is targeting Informatica to boost data capability. Charles
Schwab’s (SCHW -0.9%) first-quarter net revenue topped estimates as the retail brokerage tries to put last year’s turbulence behind it. Tesla Inc. (TSLA) falls 1% as the company will slash global headcount by more than 10% as the carmaker grapples with a slowdown
in electric vehicle demand.

VIX hit its highest level since October, when SPX was a thousand lower… VIX was up 25% and on track for its biggest daily jump since April 2022.

Both the Russell 2000 and Dow indices have been holding a short term negative tone below their
50 day moving averages.

European shares rose as Euro-area industrial production recovered some ground in February. Output rose 0.8% from the previous month, when it fell by a revised 3%. Mining stocks fluctuated
as new US and UK sanctions on Russian supplies whipsawed metals prices. The energy sector was the biggest laggard as oil prices slipped amid speculation that the Iran-Israel conflict would remain contained. French President Emmanuel Macron urged Israel to
respond in “a calibrated manner” to avoid an escalation in the hostilities. Defense companies including Saab AB, Thales SA and Leonardo SpA gained amid the heightened geopolitical tensions. Shipping stocks such as A.P. Moller-Maersk A/S and Hapag-Lloyd AG
were mixed. Stoxx 600 +0.6%, DAX +1%, CAC +1%, FTSE 100 -0.1%. Autos and Industrials +1.6%, Technology +1.3%, Banks +1.2%. Energy -1.2%, Utilities -0.5%.

Asian stocks were mostly lower, tracking Friday’s slide in US equities, as Middle East tensions hurt risk sentiment. The MSCI Asia Pacific Index slid 0.8%, for a fourth-straight day of
losses, with technology shares the biggest drag. Sentiment calmed somewhat later in the day as traders bet diplomatic efforts will prevent the conflict from escalating. Key equity gauges declined in Hong Kong, Japan, South Korea and Taiwan. Mainland China
stocks gained as renewed regulatory support from Beijing shielded the market from the broader selloff. Apple suppliers mostly fell in Asia after data showed iPhone shipments were down nearly 10% in the first quarter, in contrast to a broader rebound in the
smartphone industry. Vietnam -4.7%, Philippines -1.5%, Taiwan -1.4%, Sensex -1.1%, Singapore -1%, Nikkei 224 -0.7%, Hang Seng Index -0.7%, ASX 200 -0.5%, Kospi -0.4%. CSI 300 +2.1%, Shanghai Composite +1.3%.

FIXED INCOME: 
 

Treasuries remain under pressure, with cash yields cheaper by roughly 5bps across the curve. Friday’s haven bid abated during Asia session on the prospect that diplomatic
efforts will prevent escalation of conflict between Iran and Israel.  US session includes retail sales data, and the week’s Fed speaker slate includes Chair Powell in a moderated Q&A on Tuesday.  10-year yield around 4.57% is near top of Friday’s range, while
the curve is flat. Treasury coupon sales include $13b 20-year bond reopening Wednesday and $23b 5-year TIPS new issue Thursday.

METALS: 
   

Gold nudged higher, but holds below last week’s new high, even after Iran’s unprecedented attack on Israel over the weekend. Bullion rose as much as 1.2% as the conflict
in the Middle East entered a dangerous new phase, before paring most of that gain. The Islamic Republic fired more than 300 drones and missiles against Israel, though there were no fatalities reported. Elsewhere, aluminum surged by a record on the London Metal
Exchange as traders responded to new US and UK sanctions that banned deliveries of Russian supplies produced after midnight on Friday.  Spot gold +0.5%, silver +2.3%. 

ENERGY:   

Crude oil fell as traders breathed a sigh of relief after Israel fended off a large-scale air assault by Iran and the US emphasized it wants to avoid a wider war
in the Middle East. The crude oil market is now bracing for the Netanyahu government’s response to the attack and whether this marks the start of a direct war between Israel and Iran. Iran said there would be no further attacks as long as Israel didn’t respond
aggressively, but Benjamin Netanyahu warned, “whoever strikes Israel, we will strike him.” Oil prices have shown a relaxed response to Iran’s drone attack on Israel, and that’s partly thanks to spare production capacity held by OPEC+. The idle output can continue
to shield the market against heightened geopolitical risks. WTI -1%, Brent -0.9%, US Nat Gas -1.7%, RBOB -0.7%.

CURRENCIES:   

In currency markets, the dollar traded mixed versus its Group-of-10 peers as geopolitical concerns eased while the yen extended losses and approached the 154 handle.
The Japanese Yen fell to its weakest level against the dollar since the early 1990s amid speculation Japan’s trade balance will deteriorate on higher oil prices.  Sterling rebounded from its biggest weekly fall against the dollar since July, bouncing from
a five-month low hit on Friday as markets prepare for a data-heavy week including labor market data on Tuesday and inflation figures on Wednesday that could influence Bank of England policy. US$ Index -0.1%, USDJPY +0.45%, GBPUSD +0.2%, EURUSD +0.15%, AUDUSD
+0.05%, USDCHF -0.15%.

Spot Bitcoin +4.2%, Ethereum +6%. Hong Kong gave initial approvals for asset managers to start spot-Bitcoin and Ether ETFs, a development that boosted digital assets
and the wider crypto market.  A once-every-four-years software update called the “halving” has long been held as one of the keys to propping up its value. But this time around, the event — due around April 20 — may spell revenue losses of around $10 billion
a year for crypto miners as they validate fewer transactions.

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
• Alamos Gold (AGI CN) Raised to Buy at Laurentian Bank; PT C$22
• BRF (BRFS3 BZ) ADRs Raised to Overweight at JPMorgan
• Churchill Downs (CHDN) Raised to Overweight at Wells Fargo; PT $141
• Cisco (CSCO) Raised to Buy at BofA; PT $60
• Coupang (CPNG) Raised to Buy at Citi; PT $26
• Extreme Networks (EXTR) Raised to Buy at B Riley; PT $14
• Frontier (FYBR) Raised to Buy at Citi; PT $30
• Gerdau (GGBR4 BZ) ADRs Raised to Overweight at JPMorgan; PT $6
• Gold Flora (GRAM CN) Raised to Speculative Buy at Canaccord; PT C$1.03
• Lockheed (LMT) Raised to Overweight at JPMorgan; PT $518
• Masimo (MASI) Raised to Buy at Stifel; PT $170
• Pentair (PNR) Raised to Buy at Northcoast; PT $100
• PVH (PVH) Raised to Outperform at Wedbush; PT $128
• Triumph Group (TGI) Raised to Neutral at JPMorgan; PT $17
• VF Corp (VFC) Raised to Hold at Williams Trading; PT $13
• Downgrades
• AvidXchange (AVDX) Cut to Sell at Goldman; PT $11.50
• Brunswick (BC) Cut to Neutral at BNPP Exane; PT $82
• Corus Entertainment (CJR/B CN) Cut to Hold at Cowen; PT 70 Canadian cents
• Hershey (HSY) Cut to Neutral at President Capital Management; PT $190
• Linde (LIN) Cut to Hold at Kepler Cheuvreux
• Malibu Boats (MBUU) Cut to Market Perform at Raymond James
• ServiceNow (NOW) Cut to Neutral at Guggenheim
• Initiations
• 4D Molecular (FDMT) Rated New Overweight at Barclays; PT $45
• AppLovin (APP) Rated New Neutral at Daiwa; PT $80
• Astera Labs (ALAB) Rated New Buy at Needham; PT $85
• Rated New Buy at Deutsche Bank; PT $85
• Rated New Overweight at Barclays; PT $85
• Rated New Equal-Weight at Morgan Stanley; PT $81
• Rated New Buy at Roth MKM; PT $85
• Rated New Buy at Stifel; PT $81
• Rated New Buy at Jefferies; PT $85
• Rated New Overweight at JPMorgan; PT $85
• Cava Group (CAVA) Rated New Equal-Weight at Barclays; PT $58
• Coty (COTY) Rated New Buy at Canaccord; PT $14
• Cullinan Oncology (CGEM) Rated New Outperform at William Blair; PT $35
• Engene Holdings (ENGN) Rated New Buy at Guggenheim; PT $34
• GE Vernova (GEV) Rated New Buy at Mizuho Securities; PT $154
• Healthpeak Properties (DOC) Reinstated Buy at Jefferies; PT $21
• Hilton Grand Vacations (HGV) Rated New Overweight at JPMorgan; PT $59
• Immunome (IMNM) Rated New Buy at Guggenheim; PT $35
• Janus Intl (JBI) Rated New Buy at Jefferies; PT $20
• Las Vegas Sands (LVS) Rated New Buy at Seaport Global Securities
• LENZ Therapeutics Inc (LENZ) Rated New Outperform at William Blair
• Li Auto (LI) ADRs Reinstated Outperform at Macquarie; PT $40
• Melco Resorts (MLCO) ADRs Rated New Buy at Seaport Global Securities
• MercadoLibre (MELI) Rated New Buy at President Capital Management
• MGM Resorts (MGM) Rated New Buy at Seaport Global Securities; PT $56
• Mind (MNMD) Rated New Outperform at Leerink; PT $20
• Moody’s (MCO) MultiSensor AI Rated New Buy at Roth MKM; PT $8
• NIO Inc. (NIO) ADRs Reinstated Neutral at Macquarie; PT $5
• PetroTal Corp (TAL CN) Rated New Buy at Canaccord; PT C$1.20
• Reddit (RDDT) Rated New Buy at Needham; PT $55
• Rated New Strong Buy at Raymond James; PT $50
• Rated New Buy at Loop Capital; PT $55
• Rated New Neutral at JPMorgan; PT $47
• Rated New Neutral at Goldman; PT $40
• Rated New Overweight at Piper Sandler; PT $50
• Rated New Market Outperform at JMP; PT $53
• Rated New Equal-Weight at Morgan Stanley; PT $45
• Rated New Buy at Roth MKM; PT $50
• Satellos Bioscience Inc (MSCL CN) Rated New Buy at HC Wainwright
• Unity Software (U) Rated New Buy at SPDB Intl HK; PT $31
• Wynn Resorts (WYNN) Rated New Neutral at Seaport Global Securities
• XPeng (XPEV) ADRs Reinstated Neutral at Macquarie; PT $7

Data sources: Bloomberg, Reuters, CQG