Daily Game Plan

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

DATA/HEADLINES:  1:00ET 20-year bond reopening; 2:00ET Fed’s Beige Book, ECB’s Lagarde speaks; 4:00ET TIC Flows;
5:30ET Fed’s Mester speaks

Turkey’s President to meet with Hamas leader this weekend

TODAY’S HIGHLIGHTS and News:  

• Biden is calling for a tripling of tariffs on steel from China
• Missile hits building in Galilee
• Tesla to call a vote on moving its state of incorporation to Texas from Delaware
• Boeing CEO to testify before Senate hearing
  
• Canada will hike capital gains taxes on companies and wealthy individuals to two-thirds, from 50%
  

Global equities nudged higher as a semblance of calm returned to markets. Stocks have come under pressure this week on worries for the timing and extent of Federal
Reserve interest rate cuts. UK inflation slowed less than expected last month as fuel prices crept higher, prompting traders to further unwind bets on how many interest rate cuts the Bank of England will deliver this year. President Biden is calling for a
tripling of tariffs on steel from China to protect American producers from a flood of cheap imports, an announcement he planned to roll out today in a speech to steelworkers in the battleground state of Pennsylvania. Meanwhile, tensions in the Middle East
continue to simmer. China’s top diplomat told Iran that their ties remain solid following Tehran’s unprecedented attack on Israel. Israel has made a decision to respond to Iran’s attack, British Foreign Secretary David Cameron said following a meeting with
Israeli President Isaac Herzog today.

EQUITIES: 

US equity futures edged higher after three straight days of decline for the S&P500 which closed near a two-month low, as traders recalibrated bets on the timing and extent of Federal
Reserve interest rate cuts. Corporate earnings will now have to do the heavy lifting for any rally, according to Barclays strategists, who recommend buying the dips as resilient activity data continue to point to an economic recovery. The FTC plans to sue
to block Tapestry’s $8.5 billion takeover of Capri, the NYT’s DealBook reported. Earnings include Abbott, Discover, Travelers, CSX, Prologis, US Bancorp, Las Vegas Sands, Citizens Financial, First Horizon, Alcoa.     

Futures ahead of the bell: E-Mini S&P +0.35%, Nasdaq +0.25%, Russell 2000 +0.5%, DJI +0.2%. ES should find some support at the reflexive line in the trend channel at 5065, at least for
now.

In pre-market trading, US Bancorp (USB) fell ~4% after it lowered its full year net interest income guidance. Alcoa (AA) advances 3% after Bloomberg reported that
President Biden will propose higher tariffs on Chinese steel and aluminum during a visit to Pittsburgh. Autodesk (ADSK) falls 4% after the software company said it won’t file its annual report within the 15-day extension period as it continues an investigation
into free cash flow and non-GAAP operating margin practices. JB Hunt (JBHT) slips 7% after the transportation company posted first-quarter earnings and revenue that fell short of expectations. Omnicom (OMC) rises 2% after the advertising and marketing company
reported first-quarter results that beat expectations. ResMed (RMD) falls 6% and Inspire Medical Systems (INSP) slips 7% after Eli Lilly said its weight-loss drug Zepbound improved breathing problems in two late-stage trials of patients with obstructive sleep
apnea. Sage Therapeutics (SAGE) plunges 20% after the drugmaker said a mid-stage study of its experimental treatment for Parkinson’s disease failed to meet its main goal. Tapestry Inc. (TPR) rises 1.8% after the New York Times reported that US regulators are
moving to block the company’s planned takeover of Capri Holdings (CPRI -2.5%). United Airlines (UAL) rises 5% after the carrier’s second-quarter earnings beat. Urban Outfitters (URBN) drops 4% after Jefferies downgraded the clothing retailer to underperform.
The Children’s Place (PLCE) jumped 20% after announcing it has entered into a new financing agreement with its majority shareholder, Mithaq Capital SPC, for an unsecured and subordinated $90 million term loan.

European stocks gained, with positive earnings from some of the region’s biggest companies lifting sentiment. The Stoxx 600 is up 0.5%, led by consumer product shares after reassuring
updates from LVMH (+4.8%) and Adidas (+8%). The German sportswear giant reported quarterly results above expectations and hiked its 2024 guidance on strong demand for its retro sneakers. Technology stocks underperform as ASML falls 4% after new orders fell
short of expectations, although sales to China held up despite US led restrictions. Miners outperformed as iron ore prices jumped. The ECB’s Christine Lagarde said the German economy may have “turned a corner.” Industrial production numbers came in “much higher
than what we had expected,” she told CNBC. Stoxx 600 +0.6%, DAX %, CAC +1.3%, FTSE 100 +0.7%.  Luxury +2.4%, Basic Resources +2.3%, Banks +1.6%, Insurance +1.2%. Technology -2%, Healthcare -0.2%.    

Asian stocks were mixed to lower, with the MSCI Asia Pacific Index falling 0.2% on worries about higher-for-longer interest rates and geopolitical tensions. The index remains marginally
positive on the year as investors take risk off the table. Hong Kong stocks were little changed while mainland China gauges sharply rebounded from Tuesday’s losses. Chinese small caps rose, paring this week’s selloff, as the nation’s top securities regulator
sought to ease concern over the potential delisting of firms with weak financial health. Japanese semiconductor stocks declined after Dutch chip-equipment maker ASML’s new orders fell short of analysts’ expectations. Japan exports figure came in at +7.3% vs
+7.0% expected as a weaker Yen saw better demand from China. CSI1000 +4.3%, Shanghai Composite +2.1%, Taiwan +1.6%, CSI 300 +1.5%, Philippines +0.7%, Singapore +0.3%, Hang Seng Index +0.02%. Thailand -2.1%, Vietnam -1.9%, Nikkei 225 -1.3%, Kospi -1%. 

FIXED INCOME: 
 

Treasuries are richer across the curve with front-end and belly leading, re-steepening 5s30s spread by ~2bps. Core European rates lag, led by front-end gilts after
March UK inflation data showed less slowing than expected. US session includes 20-year bond auction but no major economic releases or Fed speakers. WI 20-year yield ~4.875% is roughly 33bp cheaper than last month’s, which got a strong reception and stopped
2bp through. IG dollar issuance slate includes four names so far; Tuesday was quiet for new deals with weekly total rising slightly to $16b vs $30b forecast.  US 10-year yield -1.5bps to 4.65%; 2-year yield ~4.97%.

METALS: 
   

Gold is slightly higher as silver leads gains, even as investors weighed a shift in messaging from Federal Reserve chief Jerome Powell. Bullion closed little changed
on Tuesday after Powell said that it’s appropriate to give the Fed’s restrictive policy further time to work and pointed to the lack of additional progress made on inflation in recent months. Long-standing supports, including robust buying by central banks
and increased demand from Chinese consumers continue to support prices.  Spot gold +0.2%, silver +1.4%.        

ENERGY:   

Oil prices dipped as traders wait to see how Israel would respond to Iran’s weekend attack. UK Foreign Secretary David Cameron said Wednesday that “it’s clear the
Israelis are making a decision to act” against Iran. Iranian President Ebrahim Raisi warned Wednesday that a counterattack by Israel would be met with a “massive and harsh” response. US crude stockpiles rose by more than 4 million barrels last week, API data
showed. That would put the total holdings at their highest in 10 months if confirmed by the EIA today. WTI -0.6%, Brent -0.6%, US Nat Gas -3.7%, RBOB -0.8%.

CURRENCIES:   

In currency markets, the pound rose after UK consumer prices slowed less than expected in March. UK consumer prices rose 3.2% in March compared with a year earlier,
lowest since September 2021, but still above the 3.1% that the BOE expected. The kiwi is outperforming among the G-10’s, rising 0.5% versus the greenback after data showed home-grown price pressures remained persistent. Japanese and South Korean finance ministers
shared “serious concerns” on the recent weakening of their currencies and said they may take “appropriate steps” to counter drastic currency volatility. Japanese executives called on the government to bolster the yen. US$ Index -0.05%, USDJPY -0.05%, GBPUSD
+0.3%, EURUSD +0.2%, AUDUSD +0.4%, USDCHF -0.25%.

Spot Bitcoin -0.4%, Ethereum -0.6%.

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
• Antero Resources (AR) Raised to Overweight at Morgan Stanley
• Commerce Bancshares (CBSH) Raised to Outperform at Raymond James
• Danaher (DHR) Raised to Buy at HSBC; PT $280
• Dorian LPG (LPG) Raised to Buy at Arctic Securities; PT $45.20
• Elf Beauty (ELF) Raised to Buy at Cowen; PT $190
• Goeasy (GSY CN) Raised to Outperform at CIBC; PT C$200
• Group 1 Automotive (GPI) Raised to Buy at Guggenheim; PT $305
• Hancock Whitney (HWC) Raised to Buy at Citi; PT $50
• Legend Biotech (LEGN) ADRs Raised to Sector Outperform at Scotiabank
• Medical Properties (MPW) Raised to Hold at Deutsche Bank; PT $5
• Omnicom (OMC) Raised to Overweight at Wells Fargo; PT $106
• Strategic Education (STRA) Raised to Buy at Truist Secs; PT $125
• TD Bank (TD CN) Raised to Sector Outperform at Scotiabank; PT C$93
• Downgrades
• EQT Corp (EQT) Cut to Equal-Weight at Wells Fargo; PT $37
• Fortive (FTV) Cut to Neutral at JPMorgan; PT $90
• Marsh & McLennan (MMC) Cut to Neutral at Piper Sandler; PT $211
• Urban Outfitters (URBN) Cut to Underperform at Jefferies; PT $32
• Initiations
• Achieve Life Sciences (ACHV) Rated New Buy at JonesTrading; PT $20
• Blue Owl Capital Corp. III (OBDE) Rated New Outperform at Oppenheimer
• Canoo (GOEV) Rated New Buy at Benchmark; PT $5
• GE Vernova (GEV) Rated New Outperform at Raymond James; PT $160
• LeddarTech (LDTC) Rated New Hold at WestPark Capital
• Mirum Pharma (MIRM) Rated New Buy at Stifel; PT $48
• Nuvalent (NUVL) Rated New Buy at Jefferies; PT $97
• Royal Caribbean (RCL) Rated New Buy at Mizuho Securities; PT $164

Data sources: Bloomberg, Reuters, CQG