Daily Game Plan

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

DATA/HEADLINES:  8:30ET Unit Labor Costs, Nonfarm Productivity, Initial Jobless Claims, Trade Balance; 10:00ET Factory
Orders, Durable Goods Orders, Cap Goods Orders

TODAY’S HIGHLIGHTS and News:  

• Buybacks to begin this month
• Man Group, BlackRock and Citadel have billion-dollar mandates from Australia’s sovereign wealth
  fund
• SP 500 remains negative below its 50dma
  

Global equities steadied as a sense of relief filtered through world markets after the Federal Reserve shot down talk of pivoting back to interest rate hikes and
pushed back on stagflation fears. The global economy is growing faster than expected thanks to resilient US activity while inflation is converging more quickly than expected with central banks’ targets, the OECD said in its latest economic outlook. However,
the speed of recoveries diverged widely, the OECD warned, saying lingering sluggishness in Europe and Japan was being offset by the United States, whose growth forecast was hiked to 2.6% this year from a previous estimate of 2.1%.  Boosted by fiscal stimulus,
China’s economy was also expected to grow faster than expected with its growth now forecast at 4.9% in 2024 and 4.5% in 2025. While weakness in Germany would continue to weigh on the broader euro zone, the bloc’s growth was projected to pick up from 0.7% this
year to 1.5% next year.   

EQUITIES: 

 US equity futures gained as investors seem to have taken solace from the Federal Reserve’s surprisingly sharp brake on its “quantitative tightening” process on Wednesday. The Fed said
it would scale back the pace of QT starting on June 1, allowing only $25 billion in Treasury bonds to run off each month versus the current $60B. Today’s focus will be on Apple’s earnings results, which are due after the close, with analysts bracing for a
big drop in sales and waiting to hear how the company plans to embed AI into its iPhones. President Biden included ally Japan along with rivals China and Russia in a list of countries he called “xenophobic” in a speech at a campaign event in Washington.  

Futures ahead of the bell: E-Mini S&P +0.6%, Nasdaq +0.8%, Russell 2000 +1.1%, DJI +0.5%.

In pre-market trading, Carvana (CVNA) soars 35% after the car retailer reported a surprise profit. Peloton (PTON) gains 9% as Chief Executive Officer Barry McCarthy is stepping down from
the role and the company plans to cut about 15% of its global workforce. Aspen Aerogels (ASPN) soars 27% after the insulation products provider reported a narrower loss per share for the first quarter and boosted its 2024 revenue guidance.  American International
Group (AIG) gains 2% after reporting profit above analysts’ estimates. Emergent BioSolutions (EBS) soars 58% after the company’s first-quarter earnings-per-share report bucked analysts’ expectations of a loss. The drugmaker also announced job cuts. Enovix
(ENVX) jumps 26% after the maker of lithium-ion batteries posted 1Q revenue that topped estimates. Freshworks (FRSH) falls 26% after the application software company cut its full-year revenue forecast and announced a CEO transition. Novocure (NVCR) gains 9%
after the oncology therapy company reported net revenue for the first quarter that beat. Qorvo (QRVO) drops 11% after the chipmaker forecast adjusted EPS and revenue for the fiscal first quarter that trailed estimates. Rush Street (RSI) climbs 17% after the
online casino and sports betting company boosted its full-year revenue targets after its first quarter results handily topped expectations. Wolfspeed (WOLF) falls 10% after the semiconductor device company gave an outlook that is seen as weak, prompting at
least two downgrades. Qualcomm gains over 5% after results. EBay shares decline 3.8% after the e-commerce company’s forecast for second-quarter net revenue missed consensus expectations. While analysts saw the results as solid, JPMorgan flagged a “light” outlook
for the second quarter.

APPLE CEO COOK EXPECTED TO HINT NEW AI FEATURES NEXT WEEK: WAPO. AAPL +1.8% pre-market

AMD has key support around the
200dma

European gauges made a sluggish start as much of the region returned from a holiday, with investors measuring signals from the Federal Reserve on the outlook for interest-rate cuts and
dissected a slew of earnings. The Stoxx 600 Index is recouping an earlier loss, with banks and utilities outperforming while energy shares lead declines. Standard Chartered gained over 5% after its earnings topped estimates and Shell rose 1% as it kept up
the pace of share buybacks while first-quarter profit dropped less than expected.  Novo Nordisk shares initially fell after posting results but have since recovered to trade slightly higher. On the data front, German and Spanish PMI ticked higher in April,
while Italy manufacturing PMI falls to 47.3 from its flash reading of 50.4. The euro area manufacturing PMI was almost unchanged from the ‘flash’ release. Meanwhile, Swiss inflation jumped to a four-month high. Britons head to the polls for local elections
that could put PM Rishi Sunak in a perilous position if the Conservatives suffer significant losses. Stoxx 600 is flat, DAX +0.1%, CAC -0.6%, FTSE 100 +0.4%.

Asian stocks were mixed to higher, with Hong Kong staging a rally, as the Federal Reserve kept hopes alive for an interest-rate cut this year. Hong Kong’s first-quarter GDP rose 2.7%
year on year, better than the 0.8% forecast. The MSCI Asia Pacific Index climbed 0.9%, with Tencent and Meituan among the biggest contributors. Key indexes in Hong Kong surged more than 2%, with the Hang Seng Index entering bull market, in a sign that global
funds are trickling back into the financial hub. Chinese electric-vehicle makers rally in Hong Kong after Nio reported deliveries for April that grew 32% from the previous month. Japanese stocks fluctuated with the yen amid speculation authorities intervened
for a second time this week to support the currency. Japanese companies are expressing discomfort with the weak yen, normally a boon to exporters. Onshore markets in China are closed through Friday for holidays, while those in Japan will be shut Friday and
Monday. Hang Seng Tech +4.5%, Hang Seng Index +2.5%, Vietnam +0.6%, ASX 200 +0.2%, Sensex +0.2%. Nikkei 225 -0.1%, Kospi -0.3%, Philippines -0.8%, Taiwan -0.8%, Indonesia -1.6%.

FIXED INCOME: 
 

Treasuries are slightly richer across the curve, supported by gains seen in European rates as Wednesday’s Fed policy meeting continues to be digested by investors.
Treasury yields richer by 1.5bp to 3bp across the curve with gains led by belly, extending Wednesday’s steepening move in the 5s30s spread by around 2bps. 10-year yields around 4.60%, richer by 3bp on the day. 

METALS: 
   

Gold is lower after ending 1.5% higher in the prior session, the biggest one-day gain since mid-April, spurred by less hawkish comments from Fed Chair Powell. Spot
gold -0.9%, silver -1.5%.   

ENERGY:   

Crude oil rose after yesterday’s steep decline triggered by a surprise jump in US stockpiles. The EIA on Wednesday reported a climb in crude inventories of 7.3 million
barrels for the week that ended April 26. In addition, diplomatic efforts are being pushed forward in Gaza to broker a ceasefire deal, which would ease tensions in the region.  OPEC+ will maintain output cuts through the second half although it may ease reductions
if prices move above $90, according to Citi.  WTI +0.8%, Brent +0.7%, US Nat Gas +2.6%, RBOB +0.4%.

CURRENCIES:   

In currency markets, the yen was the center of attention in foreign exchange, recording another day of big swings amid speculation that Japanese authorities had stepped
in to support the currency. The Japanese yen slid as much as 1.1% against the dollar, after a late surge Wednesday.  Japan’s Ministry of Finance has declined to confirm whether it had stepped in.  Japan will likely keep intervening to prop up the yen until
the risk of speculators triggering a free fall in the currency has been eliminated, said a former central bank official. The risk of more intervention over the long weekend is forcing Tokyo FX traders to plan on remaining at their desks. Japanese markets are
closed tomorrow and Monday. The dollar is slightly lower following a retreat on Wednesday from near six-month highs. Following Powell’s guidance, traders turn focus to US data releases including jobless claims and labor costs today and the payrolls report
Friday. US$ Index -0.05%, GBPUSD -0.2%, EURUSD -0.2%, USDJPY +0.2%, AUDUSD +0.1%, USDCHF -0.4%

Spot Bitcoin +2.6%, Ethereum +2.2%.

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
• Axalta (AXTA) Raised to Overweight at Wells Fargo; PT $42
• Bread Financial Holdings (BFH) Raised to Outperform at KBW
• Carvana (CVNA) Raised to Overweight at JPMorgan; PT $130
• CGI Inc (GIB/A CN) Raised to Buy at Cowen; PT C$160
• MGM Resorts (MGM) Raised to Positive at Susquehanna; PT $54
• New York Community Bancorp (NYCB) Raised to Neutral at Wedbush
• NNN REIT Inc (NNN) Raised to Neutral at BNPP Exane; PT $42
• Shopify (SHOP CN) Raised to Outperform at BNPP Exane; PT C$128.88
• SiteOne Landscape (SITE) Raised to Buy at Stifel; PT $165
• Snowflake (SNOW) Raised to Outperform at BNPP Exane; PT $200
• Synchrony Financial (SYF) Raised to Outperform at KBW
• Tanger Inc (SKT) Raised to Buy at Compass Point; PT $32
• TJX (TJX) Raised to Buy at UBS
• Trade Desk (TTD) Raised to Buy at Jefferies; PT $105
• TTM Tech (TTMI) Raised to Buy at Stifel; PT $19
• Upwork (UPWK) Raised to Buy at BTIG; PT $16
• Wolverine World Wide (WWW) Raised to Hold at Williams Trading; PT $11
• Ziff Davis Inc (ZD) Raised to Overweight at JPMorgan; PT $70
• Downgrades
• Astec Industries (ASTE) Cut to Hold at Stifel; PT $37
• Community Healthcare Trust (CHCT) Cut to Neutral at Piper Sandler
• CVS (CVS) Cut to Neutral at UBS
• Etsy (ETSY) Cut to Sell at Loop Capital; PT $50
• Fastly (FSLY) Cut to Underperform at BofA
• Cut to Neutral at DA Davidson; PT $8.50
• Freshworks (FRSH) Cut to Perform at Oppenheimer
• Cut to Neutral at Baird; PT $16
• Hudson Technologies (HDSN) Cut to Hold at Canaccord; PT $10
• Metagenomi (MGX) Cut to Neutral at JPMorgan; PT $6
• Spire (SR) Cut to Neutral at Mizuho Securities; PT $62
• Wolfspeed Inc (WOLF) Cut to Market Perform at William Blair
• Cut to Hold at Cowen; PT $25
• Initiations
• Amplify Energy Corp (AMPY) Rated New Buy at Benchmark; PT $11
• Atha Energy (SASK CN) Rated New Buy at Eight Capital: PT C$3
• Goeasy (GSY CN) Rated New Outperform at KBW; PT C$205
• IBM (IBM) Rated New Underperform at BNPP Exane; PT $145
• Meta Platforms (META) Rated New Underperform at BNPP Exane; PT $360
• Netflix (NFLX) Rated New Outperform at CICC; PT $650
• Sagimet Biosciences (SGMT) Rated New Buy at HC Wainwright; PT $32
• Spyre Therapeutics Inc (SYRE) Rated New Outperform at Baird; PT $50
• Tesla (TSLA) Rated New Overweight at Cantor; PT $230

Data sources: Bloomberg, Reuters, CQG