Daily Game Plan

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

DATA/HEADLINES:  8:30ET Philadelphia Fed Non-Manufacturing Activity; 9:45ET S&P Global US Manufacturing PMI, S&P
Global US Services PMI, Composite PMI; 10:00ET Revisions: Retail Sales, New Home Sales, Richmond Fed Manufact. Index

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

TODAY’S HIGHLIGHTS and News:  

• Baltimore sues owner of ship that crashed into key bridge
• Trump is set to clinch a stock bonus worth $1.3 billion from Truth Social operator Trump Media, equivalent to about half the majority stake he already owns
• Walmart-backed fintech One introduces buy now, pay later as it prepares bigger push into lending
• Apple’s iPhone sales in China slumped 19% last quarter
  
• IRAN’S PRESIDENT RAISI IN PAKISTAN: IF ISRAEL ATTACKS THE IRANIAN TERRITORY “CIRCUMSTANCES” WILL COMPLETELY CHANGE- IRNA

Global equity markets rose, driven by a recovery on Wall Street. Investors are less concerned right now about the threat of a major re-escalation of tension in the
Middle East and more focused on earnings.  Investors in the euro-region are looking ahead to bank earnings this week and will be keeping an eye on a range of tech earnings in the US, with Tesla reporting after the bell today. Adding to the optimism was a series
of surveys of business activity that showed Germany returned to growth in early April after months of contraction, while activity in the broader euro zone expanded at its fastest clip in nearly a year. S&P Global’s preliminary composite euro zone purchasing
managers’ index rose to 51.4 this month versus expectations of 50.7. Data showed UK’s purchasing managers’ index rising to a stronger-than-expected 54 in April, up from 52.8 the previous month.   

EQUITIES: 

US equity futures edged higher after Monday’s rebound broke six days of declines. Earnings are front and center of investor’s minds this week with about 180 companies — representing over
40% of the S&P 500 market value — reporting results. The stakes are high for the “Magnificent Seven” mega-caps, whose profits are forecast to rise 38% in the first quarter from a year ago, dwarfing the overall S&P 500’s 2.4% anticipated year-over-year earnings
growth, according to Bloomberg. Excluding Nvidia, which doesn’t report its earnings for another month, expected net income growth for the group falls to 23%. US business activity, quarterly economic growth and a measure of monthly inflation top the macro data
bill this week. 

Futures ahead of the bell: E-Mini S&P +0.15%, Nasdaq +0.15%, Russell 2000 -0.3%, DJI +0.2%.

In pre-market trading, Spotify (SPOT) jumps 8% after the music streaming service reported year-over-year growth in total premium subscribers. Danaher (DHR) rises 8% after the life-sciences
firm reported adjusted earnings per share for the first quarter that exceeded estimates. General Electric (GE) rises 3% after raising its full-year profit guidance for its aerospace business.  Hibbett (HIBB) soars 18% after agreeing to be purchased by UK-based
JD Sports for about $1.1 billion. PulteGroup (PHM) rises 4% after reporting adjusted earnings per share for the first quarter that beat. Roblox (RBLX) climbs 4% after JPMorgan upgraded the game maker to overweight, citing a “compelling” entry point for a company.

Abeona Therapeutics (ABEO) slumps 49% after the biotechnology company’s drug for a rare connective tissue disorder failed to win approval from the FDA. Cadence Design (CDNS) drops 5%
after the maker of semiconductor design software provided a disappointing 2Q forecast. Calix (CALX) sinks 15% after the communications software company posted a second-quarter forecast that’s weaker than expected. JetBlue Airways (JBLU) falls 10% after saying
revenue this quarter will fall more than analysts expected due to excess flying capacity in Latin America. Nucor (NUE) falls 6% after the steelmaker reported first-quarter earnings per share that missed. Sherwin-Williams (SHW) drops 6% after reaffirming its
adjusted earnings per share guidance for the full year.

European shares rose for a second day after strong earnings from some of the region’s biggest companies, while positive economic data helped boost sentiment. Technology and retail sectors
are leading the advance. AP SE jumped almost 5% as a boom in demand for artificial intelligence fueled the German software company’s growth. Drugmaker Novartis AG added as much as 5% after lifting full-year guidance. UK’s FTSE 100 extended gains for a fifth
straight day, to trade at another all-time intraday high, before paring most of its gain.  Stoxx 600 +0.8%, DAX +0.9%, CAC +0.4%, FTSE 100 +0.1%. Technology and Retail +1.8%, Travel +1.7%, Banks +1.6%. Basic Resources underperform, down 1.6%. 

Asian stocks rose for a second day as sentiment toward China continued to improve. The MSCI Asia Pacific Index gained 0.6%, with TSMC and Tencent among the biggest boosts. Most regional
markets advanced, though mainland China stocks fell for a third day as energy shares declined on lower oil prices. Japanese shares trimmed gains as the yen strengthened after Finance Minister Shunichi Suzuki’s comments on possible intervention. Hong Kong stocks
led the region’s gains after UBS upgraded Chinese stocks to overweight, citing resilient earnings and a growing focus on shareholder returns. Hang Seng Index +1.9%, Singapore +1.5%, Taiwan and Philippines +~1%, Indonesia +0.5%, ASX 200 +0.4%, Nikkei 225 +0.3%,
Sensex +0.1%. Kospi -0.2%, CSI 300 -0.7%, Vietnam -1.1%.

FIXED INCOME: 
 

Treasuries are under modest pressure with front-end yields higher by ~2.5bp as supply cycle (2-, 5- and 7-year auctions) is set to kick off with record $69b 2-year
auction today. US 10-year yields around 4.645%, higher by roughly 3.5bp on the day, leaving 2s10s spread little changed.  WI 2-year yield at around 4.965% is ~37bp cheaper than last month’s, which tailed by 0.5bp. The UK 10-year yield ticked higher after the
government raised the amount of bonds it plans to sell this fiscal year by more than analysts expected, adding to what was already the second-largest gilt package on record. 

METALS: 
   

Gold extended losses after its biggest daily decline in almost two years due to easing of Mid-East tensions and signs the Fed will keep rates higher for longer crimping
demand.  On Monday, gold experienced its biggest daily drop in over year, falling more than 2% after hitting an all-time record last Friday. The speed of the selloff may have caused some forced selling among buyers who had leveraged bets on gold, according
to Saxo Bank’s head of commodity strategy.  Spot gold -0.9%, silver -0.8%. 

ENERGY:   

Oil prices eased as traders weighed the next steps between Israel and Iran amid signs of easing hostilities following a tit-for-tat exchange of attacks last week.
Geopolitical risks continue lingering over the market as Israel returns to its goals of eliminating what it says is the last remaining stronghold of Hamas in Gaza and of freeing the remaining hostages.  US crude inventories are forecast to record a draw of
1.1 million barrels for the week ending April 19, compared with a build of 2.7 million in the previous report week, Macquarie strategists said. European natural gas prices declined nearly 2%, putting them on track for a third consecutive session of losses.
Prices have declined around 6% since Friday as fuel demand stays low. The continent has ended an exceptionally mild winter with strong gas inventories.  WTI -0.8%, Brent -0.75%, US Nat Gas +0.4%, RBOB -1%

CURRENCIES:   

In currency markets, the dollar slipped versus most of its Group-of-10 peers following PMI data out of the euro area and the UK. Traders turn focus to US PMIs due
this morning and a flurry of bond auctions. Euro-area private-sector activity advanced to the highest level in almost a year, driven by a buoyant services sector and Germany’s return to growth. The yen slid to another 34-year low before recovering after Finance
Minister Shunichi Suzuki said the environment is in place to intervene in the FX market if needed.  The Bank of Japan is widely expected to leave interest rates unchanged Friday, with investors focusing on any less dovish tilt as the yen trades around a 34-year
low. US$ Index -0.05%, USDJPY -0.03%, GBPUSD +0.3%, EURUSD +0.15%, AUDUSD ~flat, USDCHF -0.05%.

Spot Bitcoin -0.6%, Ethereum -0.5%. BITCOIN’S POST-HALVING DEMAND TO BE 5X GREATER THAN SUPPLY, BITFINEX ESTIMATES.

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
• Ascot Resources (AOT CN) Raised to Outperform at Raymond James; PT C$1
• Assai (ASAI3 BZ) ADRs Raised to Overweight at JPMorgan; PT $17
• AtriCure (ATRC) Raised to Outperform at Oppenheimer; PT $32
• BCE (BCE CN) Raised to Outperform at CIBC; PT C$52
• BlackLine Inc (BL) Raised to Neutral at Piper Sandler; PT $62
• Datadog (DDOG) Raised to Overweight at Wells Fargo; PT $150
• First Solar (FSLR) Raised to Outperform at Evercore ISI
• Medpace Holdings (MEDP) Raised to Buy at Jefferies; PT $450
• Penn Entertainment Inc (PENN) Raised to Buy at Truist Secs; PT $23
• Rio2 (RIO CN) Raised to Outperform at Raymond James; PT 60 Canadian cents
• Roblox (RBLX) Raised to Overweight at JPMorgan
• Sierra Bancorp (BSRR) Raised to Buy at Janney Montgomery; PT $23
• Thomson Reuters (TRI CN) Raised to Sector Perform at National Bank
• Downgrades
• Athabasca Oil (ATH CN) Cut to Hold at Desjardins; PT C$5.75
• Canadian Natural Resources (CNQ CN) Cut to Hold at Desjardins; PT C$110
• Five Below (FIVE) Cut to Neutral at JPMorgan; PT $170
• Matterport (MTTR) Cut to Hold at Loop Capital; PT $4.50
• MP Materials (MP) Cut to Neutral at JPMorgan; PT $16
• Spartan Delta (SDE CN) Cut to Hold at Desjardins; PT C$4.50
• Sunnova Energy (NOVA) Cut to Sector Weight at KeyBanc
• Trilogy Metals (TMQ CN) Cut to Market Perform at Raymond James; PT C$1
• Warner Bros Discovery (WBD) Cut to Underperform at Wolfe; PT $7
• XP Inc. (XP) Cut to Equal-Weight at Morgan Stanley
• Initiations
• Auna (AUNA) Rated New Buy at HSBC; PT $12.60
• Cartesian Therapeutics I (RNAC) Rated New Outperform at Leerink; PT $39
• First Advantage (FA) Rated New Outperform at William Blair
• Heron Therapeutics (HRTX) Rated New Overweight at Capital One; PT $6
• Incyte (INCY) Rated New Neutral at Cantor
• Insmed (INSM) Rated New Buy at Truist Secs; PT $48
• MongoDB (MDB) Rated New Buy at Loop Capital; PT $415
• Nice Ltd (NICE IT) ADRs Reinstated Buy at Rosenblatt Securities Inc
• Qualcomm (QCOM) Rated New Buy at Benchmark; PT $200
• Trisura (TSU CN) Rated New Buy at Desjardins; PT C$48
• Vistra Corp (VST) Rated New Outperform at Haitong Intl; PT $72.54

Data sources: Bloomberg, Reuters, CQG