Daily Game Plan

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

DATA/HEADLINES:  8:30ET Chicago Fed Nat Activity Index

No Fed speakers due to a lock period ahead of the May 1^st Fed meeting

TODAY’S HIGHLIGHTS and News:  

• Israeli Military Intelligence Chief Resigns Over Oct. 7 Failure
• US-Led Military Base in Syria Hit by Rockets Fired From Iraq
  
• The EU is set to impose new sanctions on Iran
  
• Opening arguments in Trump’s hush-money trial are set to start today

Global equities are higher to start the week, as geopolitical risks subside after there were no signs of escalation in the situation in the Middle East over the weekend. 
Demand for havens eased as investors took comfort from the absence of further escalation from Iran following Israel’s retaliatory strike. Oil and gold both fell. This week ahead is packed with corporate earnings, with 158 companies in the S&P 500 and 173 companies
in the STOXX 600 reporting first quarter results. Crucial US PCE inflation data, the Federal Reserve’s preferred gauge, is due Friday.   

EQUITIES: 

US equity futures gained as investors’ focus shifted from Middle East tensions to a raft of company earnings scheduled for this week, including four of the “Magnificent Seven.” Tech stocks
in the S&P 500 broadly lost 7.3% last week for their worst performance since March 2020 as some global giants reported discouraging trends. Nvidia Corp. gained more than 2% in premarket trading after shedding 10% and over $200 billion of its market capitalization
in Friday’s broad tech selloff. Data prints later in the week are likely to help finesse policy bets, with both US GDP and the Fed’s preferred measure of inflation due. The Senate plans to vote this week on a House approved $95B aid bill for Ukraine, Israel
and Taiwan in a package that included sanctions on Iran’s oil sector.

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

In pre-market trading, Salesforce (CRM) rose 3% and Informatica (INFA) slips 6% after Bloomberg reported that takeover talks with Informatica have cooled. Tesla, set to report earnings
on Tuesday, dropped more than 2% after announcing price cuts for its electric vehicles in a number of its major markets, including China and Germany, while also lowering the price of its Full Self-Driving software by a third in the US. TSLA shares have fallen
40.8% so far this year. Crypto-linked companies rise as Bitcoin’s quadrennial halving completed late on April 19. Coinbase (COIN) +2%, Riot Platforms (RIOT) +5%, Marathon Digital (MARA) +4%. Verizon Communications (VZ) rises 2% after beating analysts’ estimates
for profit while boosting wireless service revenue.

European shares are higher, with commodities-heavy FTSE100 leading gains as tin and nickel rose to new multi-month highs. ECB’s Villeroy said “that Mid-East tensions should not delay
a June rate cut and there’s no need to wait much longer. Among other individual movers, Galp Energia SGPS SA surged as much as 19% after the Portuguese oil company provided an update on a commercial oil find off the coast of Namibia. Sandoz Group AG climbed
more than 4% to a record after the Swiss pharma company confirmed the European Commission’s approval of its Pyzchiva psoriasis drug. The SNB raised the reserve requirement for domestic banks, in a move designed to reduce how much it has to pay out to lenders.
The central bank is increasing the minimum reserve ratio to 4%, from 2.5%, from July 1. The Stoxx 600 Index was 0.4% higher, with retail and telecoms stocks leading the advance, while autos underperformed.  DAX +0.5%, CAC +0.1%, FTSE 100 +1.6%. Telecom +1.8%,
Retail +1.6%. Autos -0.9%, Utilities -0.4%.

Asian stocks rose, led by gains in Hong Kong on Beijing’s latest market support measures helping offset declines in tech hardware shares. Chinese regulators announced five measures to
optimize stock connects and bolster Hong Kong’s position as a financial hub. The MSCI Asia Pacific Index climbed as much as 1.1%, with Tencent and Alibaba among the biggest boosts. Tencent Holdings rallied more than 5% after nailing down an earlier-than-anticipated
debut of one of the year’s most eagerly-awaited mobile games. Mainland China shares fell after the People’s Bank of China kept its 1-year and 5-year loan prime rates unchanged. The Chinese central bank is waiting to see if more stimulus is needed after the
economy expanded at a faster-than-expected 5.3% annual rate in the January-March quarter, analysts said. Hang Seng Index +1.8%, Singapore +1.5%, Kospi +1.45%, Topix +1.4%, Vietnam +1.3%, ASX 200 +1.1%, Sensex +0.8%. Shanghai Composite -0.7%, Taiwan -0.6%,
CSI 300 -0.3%.

FIXED INCOME: 
 

Treasuries are slightly cheaper across the curve, following similar losses across European rates as demand for haven assets fades in the absence of major escalation
in Middle East conflict. A hefty slate of Treasuries auctions will be a major test of whether yields have peaked for the year. The US Treasury will sell a total of $183B in 2, 5 and 7-year notes this week. US long-end yields are higher by as much as 4bp on
the day, with 2s10s and 5s30s spreads steeper by ~3bp and 1.5bp as front-end outperforms; 10-year around 4.65% is 3bp cheaper on the day. IG dollar issuance slate includes a couple of deals; this week’s expected total is $20b to $25b, with mid-sized financials,
regional banks and corporates emerging from blackout periods.

METALS: 
   

Gold tumbled as geopolitical tensions eased in the Middle East, paring haven demand, and traders looked ahead to US data that will shed light on the outlook for monetary
policy. On Friday, the personal consumption expenditures price index is projected to show the annual rate rose to 2.6% last month, from 2.5% in February. That would support the case for Federal Reserve policymakers to delay rate cuts, a scenario that would
typically weigh on gold.  China’s gold demand surged to record levels, making it the world’s top buyer. Spot gold -2%, silver -4.2%.                

ENERGY:   

Crude oil prices fell as traders turned their focus back to inflation with tensions in the Middle East having so far left actual oil supplies unperturbed. Both benchmarks
spiked more than $3 a barrel early on Friday, after explosions were heard in the Iranian city of Isfahan in what sources described as an Israeli attack. Gains dissipated after Tehran played down the incident and said it did not plan to retaliate, a response
that appeared gauged towards averting a region-wide war. Still, a military base in Syria belonging to a US-led coalition came under rocket-fire late on Sunday, the government-affiliated Iraqi Security Media Cell said in a statement. Meanwhile, the market continues
to face supply side issues, with the US announcing it has reinstated sanctions on Venezuela’s oil industry. WTI -0.8%, Brent -0.8%, US Nat Gas +1.2%, RBOB -1%.

CURRENCIES:   

In currency markets, the dollar traded mixed versus its Group-of-10 peers and briefly erased an early drop as US equity futures pulled back from overnight highs.
The Federal Reserve entered its blackout period before its May 1 policy decision and traders focus on series of key US data due this week, starting with PMIs Tuesday while the Fed’s preferred inflation gauge comes Friday. USDJPY edged higher, with traders
awaiting the Bank of Japan’s upcoming meeting for potential policy changes. US$ Index +0.15%, USDJPY +0.05%, GBPUSD -0.4%, EURUSD -0.2%, AUDUSD +0.3%, USDCHF +0.1%, NZDUSD +0.4%.

Spot Bitcoin +1.7%, Ethereum +1.4%. Bitcoin’s quadrennial halving completed late on April 19. Bitcoin advocates expect the halving to be a positive catalyst, with
the cryptocurrency on the rise for three consecutive days. “Historically, bitcoin has experienced notable price increases in the six months following each halving event. In fact, bitcoin reached new all-time highs in each four-year period between the previous
halving events,” Binance CEO Richard Teng told The Block.

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
• Alcoa (AA) Raised to Equal-Weight at Morgan Stanley; PT $36.50
• AMD (AMD) Raised to Buy at Punto Casa de Bolsa; PT $174.26
• CytomX (CTMX) Raised to Neutral at JPMorgan
• Equity Residential (EQR) Raised to Outperform at BMO; PT $70
• Euronet (EEFT) Raised to Buy at Citi; PT $120
• Ingevity (NGVT) Raised to Buy at Jefferies; PT $62
• L3Harris (LHX) Raised to Overweight at Alembic Global; PT $238
• Northrop Grumman (NOC) Raised to Overweight at Alembic Global; PT $532
• Papa John’s (PZZA) Raised to Hold at Stifel; PT $60
• PPG Industries (PPG) Raised to Buy at Seaport Global Securities
• Provident Financial (PFS) Raised to Buy at DA Davidson; PT $20
• Robert Half Inc (RHI) Raised to Hold at Truist Secs; PT $72
• Downgrades
• Capstone Copper (CS CN) Cut to Hold at Paradigm Capital; PT C$9
• Cisco (CSCO) Cut to Neutral at JPMorgan; PT $53
• CNH Industrial (CNHI) Cut to Neutral at BofA
• CVB Financial (CVBF) Cut to Market Perform at Hovde Group; PT $18
• Ivanhoe Mines (IVN CN) Cut to Hold at Paradigm Capital; PT C$17.50
• Lundin Mining (LUN CN) Cut to Hold at Paradigm Capital; PT C$14.50
• OGE Energy (OGE) Cut to Equal-Weight at Barclays; PT $34
• Pacific Bio (PACB) Cut to Neutral at JPMorgan
• PPG Industries (PPG) Cut to Inline at Evercore ISI; PT $152
• PrairieSky Royalty (PSK CN) Cut to Neutral at CIBC; PT C$31
• Prologis (PLD) Cut to Market Perform at BMO
• Southern Copper (SCCO) Cut to Reduce at HSBC; PT $80
• Teck Resources (TECK/B CN) Cut to Hold at Paradigm Capital; PT C$64
• Western Digital (WDC) Cut to Market Perform at Raymond James
• Initiations
• Agilon Health (AGL) Rated New Neutral at Citi; PT $6
• Atour Lifestyle (ATAT) ADRs Rated New Outperform at Macquarie; PT $26
• BellRing Brands (BRBR) Rated New Buy at Cowen; PT $64
• Boundless Bio (BOLD) Rated New Outperform at Leerink; PT $25
• Rated New Overweight at Piper Sandler; PT $20
• Cardiol Therapeutics (CRDL CN) Rated New Buy at HC Wainwright; PT $9
• Chord Energy (CHRD) Rated New Buy at SWS; PT $262
• Cyclo Therapeutics (CYTH) Rated New Buy at Ascendiant Capital Markets
• EastGroup (EGP) Rated New Outperform at BMO; PT $190
• Engene Holdings (ENGN) Rated New Overweight at Wells Fargo; PT $30
• Evolent (EVH) Reinstated Buy at Citi; PT $40
• Gaotu Techedu (GOTU) ADRs Rated New Buy at Huatai Research; PT $8.56
• GE Vernova (GEV) Rated New Hold at Melius; PT $147
• H World Group Ltd (HTHT) ADRs Reinstated Outperform at Macquarie
• Hut 8 Corp (HUT CN) Rated New Buy at Benchmark; PT $12
• Kinetik (KNTK) Rated New Equal-Weight at Barclays; PT $40
• Kirby (KEX) Rated New Outperform at Wolfe; PT $126
• Knife River Corp (KNF) Reinstated Buy at Spin-Off Research; PT $85.17
• Kymera (KYMR) Rated New Outperform at Oppenheimer; PT $53
• Madrigal Pharma (MDGL) Rated New Underperform at BofA; PT $150
• Maple Leaf Foods (MFI CN) Rated New Outperform at National Bank; PT C$29
• Palmer Square Capital BDC (PSBD) Rated New Neutral at Janney Montgomery
• Privia Health (PRVA) Rated New Buy at Citi; PT $25
• Raymond James (RJF) Rated New Add at Citic Securities; PT $139
• Rexford Industrial (REXR) Rated New Neutral at Wedbush; PT $45
• Simply Good Foods (SMPL) Rated New Hold at Cowen; PT $34
• Stevanato Group (STVN) Rated New Outperform at BNPP Exane
• Ultragenyx (RARE) Rated New Outperform at RBC; PT $77

Data sources: Bloomberg, Reuters, CQG