Daily Game Plan

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

DATA/HEADLINES:  8:30ET Employment Report; 9:45ET S&P Global US Services PMI; 10:00ET ISM Services Index; 10:30ET
Fed’s Goolsbee on Bloomberg TV

US APRIL NONFARM PAYROLLS RISE 175K M/M; EST. +240K **

TODAY’S HIGHLIGHTS and News:  

• Apple surged overnight after announcing the biggest stock buyback in US history
• 5/30 yield curve breaks out above trend line
• The yen outperformed all Group-of-10 currencies this week
• MOST TREASURY YIELDS TUMBLE AT LEAST 10 BASIS POINTS ON DAY AFTER EMPLOYMENT

Global equities are firm ahead of key US employment numbers, underpinned by reassurance from the Federal Reserve that the next move in rates would be down. The MSCI
All Country stock index was up 0.25% as Apple fanned optimism about the earnings power of big tech companies. The April jobs report is expected to show the US labor market grew at a steady but decelerating rate last month, providing little reason for investors
to change their view on the Fed’s next move.    

EQUITIES: 

US equity futures are mostly higher, led by the tech-heavy Nasdaq contract, powered by Apple’s quarterly results as investors waited for the payrolls figures before the opening bell. 
Apple shares jumped in post-market trading after the company posted stronger-than-expected sales last quarter, predicted a return to growth in the current period and announced the biggest stock buyback in US history. Nonfarm payrolls likely increased by 243,000
jobs last month after rising 303,000 in March, according to a Reuters survey of economists, with the unemployment rate seen steady. A significantly weaker report would be a stagflation signal, raising the odds of a stock selloff, BofA’s Michael Hartnett said.
   

Futures ahead of the employment report: E-Mini S&P +0.4%, Nasdaq +0.6%, Russell 2000 -0.1%, DJI +0.8%.

In pre-market trading, Apple (AAPL) jumps 6.2% after the company posted stronger-than-expected sales last quarter and predicted a return to growth in the current period, sparking optimism
that a slowdown is easing. Alignment Healthcare (ALHC) gains 9% after the company forecast revenue for the 2Q that beat the average analyst estimate. Amgen (AMGN) soars 14% after its CEO said he was “very encouraged” by early results from a study of the company’s
experimental obesity drug, MariTide. Ardelyx (ARDX) soars 18% after the pharma company’s Xphozah and Ibsrela drugs drove a strong 1Q revenue beat. BigBear.ai (BBAI) falls 14% after the AI software company reported a wider-than-expected first-quarter loss.
Block (SQ) rises 7.2% after Jack Dorsey’s payments technology company forecast adjusted Ebitda for the full year above analysts’ estimates. Cloudflare (NET) sinks 13% after the cloud security firm provided a 2Q revenue forecast that fell slightly short of
estimates. Fortinet (FTNT) falls 8% as the cybersecurity company reported a miss in first-quarter billings due to weakness in Europe. FuboTV (FUBO) rises 8.4% after the internet television service provider reported revenue for the first quarter that beat the
average analyst estimate. ImmunityBio (IBRX) gains 8% on a deal with the Serum Institute of India for Bacillus Calmette-Guerin supply. OneSpan (OSPN) rises 15% after the software services company reported first-quarter results that are seen as strong. Open
Text (OTEX) slips 13% after the application software company gave an outlook that is seen as weak, prompting a downgrade. WideOpenWest (WOW) climbs 17% after shareholder Crestview says it and DigitalBridge submitted a joint, preliminary non-binding proposal
to buy the cable service provider. Carvana is up over 3,300% since the 2023 low.

European gauges gained as strong results from Apple boosted the technology sector. Pharmaceuticals lagged with Novo Nordisk A/S shares sliding as much as 5.3% after US competitor Amgen’s
CEO said he was “very encouraged” by early results from a study of the company’s experimental obesity drug, MariTide. The comments gave rise to concerns about potential new competition in the rapidly growing field. France industrial output rose 0.7% Y/Y versus
estimates of +1.4%. Manufacturing production fell 0.5% M/M. Stoxx 600 +0.4%, DAX +0.5%, CAC +0.6%, FTSE 100 +0.5%. Media +1.7%, Construction +1.3%, Financial Services +1%, Technology +1%. Healthcare -0.5%.

Hong Kong’s Hang Seng Index was again at the top of the leader board, having its ninth straight day of gains and on its the longest winning streak since January 2018. The MSCI Asia Pacific
Index rose as much as 1.3% before paring the advance to +0.7%. Chinese technology giants Alibaba Group and Tencent Holdings were among the top contributors to the advance. The worst of China markets in terms of fund outflows and multiple de-rating “should
be behind us, at least for 2024,” Bank of America Securities strategists said. Markets in Japan and mainland China were closed for holidays. Japan will be shut on Monday as well while China returns from a three-day break. Hang Seng Tech +2.7%, Hang Seng Index
+1.5%, ASX 200 +0.5%, Taiwan +0.5%, Vietnam +0.4%, Kospi -0.25%, Philippines -0.5%, Sensex -1%.  HIS has its 14 day RSI at highest level since the 2023 highs.

FIXED INCOME: 
 

Treasuries are narrowly mixed with the yield curve flatter ahead of the April jobs report. 7- to 30-year yields are lower by ~1bp with shorter tenors little changed;
2s10s spread flattens ~2bps. 5s30s spread remains near top of Thursday’s range at ~15bps. The US 10-year yield is down about 9 basis points this week at 4.56%, its first weekly drop since March, after Powell struck a less hawkish tone than feared. Traders
have also pulled forward expectations for the Fed’s first full interest-rate cut by a month to November.   

METALS: 
   

Gold inched lower as traders shifted their attention to the upcoming US jobs report. Despite recent data showing increased labor costs and decreased expectations
for a rate cut in June, gold remains up 11% for the year. The precious metal is on track for its first back-to-back weekly losses since February, after Thursday’s release of US labor costs showed the biggest jump in a year. Spot gold -0.2%, silver -0.9%. Look
for a test of the 50dma.

ENERGY:   

Oil prices edged higher on the prospect of OPEC+ continuing output cuts, but the crude benchmarks are headed for the steepest weekly losses in three months on demand
uncertainty and easing tensions in the Middle East reducing supply risks. OPEC+ will probably extend voluntary production cuts beyond the second quarter, JPMorgan said, adding that crude’s retreat this week illustrates that Brent’s ceiling is $90.  WTI +0.4%,
Brent +0.5%, US Nat Gas +1.2%, RBOB +0.6%.

CURRENCIES:   

In currency markets, the yen climbed to a three-week high, capping a tumultuous week that saw suspected intervention from Japanese authorities. The yen outperformed
all G-10 currencies this week and is headed for its best week since December 2022, leaving the dollar on the defensive for a third straight day. Data from the BOJ suggests Japanese officials may have spent anywhere from $23B to $60B to defend the yen this
week. A series of Japanese public holidays as well as Monday’s holiday in Britain could present a possible window for further intervention. the Norwegian krone after Norges Bank suggested prolonged tight policy. US$ Index -0.1%, GBPUSD +0.2%, EURUSD +0.2%,
USDJPY -0.25%, AUDUSD +0.3%, USDCHF -0.4%, USDNOK -0.9%.

Spot Bitcoin +0.6%, Ethereum -0.3%.

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
• Amgen (AMGN) Raised to Outperform at William Blair
• Raised to Equal-Weight at Barclays; PT $300
• Apple (AAPL) Raised to Market Perform at Itau BBA; PT $188
• Arista Networks (ANET) Raised to Buy at Jefferies; PT $320
• Aritzia (ATZ CN) Raised to Outperform at BMO; PT C$50
• Avista (AVA) Raised to Neutral at Mizuho Securities; PT $36
• Badger Infrastructure Solutions Ltd (BDGI CN) Raised to Outperform at CIBC
• Barrick Gold (ABX CN) Raised to Buy at CFRA; PT $19
• Coeur Mining (CDE) Raised to Outperform at BMO; PT $5.50
• Energy Recovery (ERII) Raised to Buy at Fearnley; PT $16
• Healthpeak Properties (DOC) Raised to Outperform at Wedbush
• Joby Aviation (JOBY) Raised to Neutral at JPMorgan; PT $5
• Mister Car Wash (MCW) Raised to Overweight at JPMorgan; PT $8.50
• Ollie’s Bargain (OLLI) Raised to Buy at Truist Secs; PT $86
• Parsons (PSN) Raised to Buy at Cowen; PT $90
• Qualcomm (QCOM) Raised to Buy at CFRA
• Union Pacific (UNP) Raised to Buy at Stifel; PT $267
• Williams-Sonoma (WSM) Raised to Neutral at JPMorgan; PT $275
• Downgrades
• AutoCanada (ACQ CN) Cut to Sector Perform at ATB Capital; PT C$25
• BrightSpire Capital Inc (BRSP) Cut to Market Perform at Raymond James
• Centerspace (CSR) Cut to Neutral at Compass Point; PT $68
• Cloudflare (NET) Cut to Neutral at President Capital Management
• Cryoport (CYRX) Cut to Neutral at B Riley; PT $19
• CVS (CVS) Cut to Hold at HSBC; PT $62
• Driven Brands (DRVN) Cut to Neutral at JPMorgan; PT $12.50
• Estee Lauder (EL) Cut to Equal-Weight at Morgan Stanley; PT $140
• Expedia (EXPE) Cut to Market Perform at BMO; PT $145
• Cut to Neutral at Piper Sandler; PT $145
• Open Text (OTEX CN) Cut to Market Perform at BMO; PT C$51.94
• Paramount Global (PARA) Cut to Neutral at Seaport Global Securities
• PayPal (PYPL) Cut to Accumulate at Phillip Secs; PT $75
• Sprout Social (SPT) Cut to Neutral at BTIG
• Cut to Market Perform at William Blair
• Cut to Neutral at Baird; PT $45
• Cut to Neutral at Piper Sandler; PT $40
• Cut to Sector Weight at KeyBanc
• Starbucks (SBUX) Cut to Hold at DZ Bank; PT $75
• Valmont (VMI) Cut to Neutral at DA Davidson; PT $300
• Vestis (VSTS) Cut to Neutral at JPMorgan; PT $11
• Cut to Hold at Stifel; PT $12
• XPEL (XPEL) Cut to Neutral at B Riley; PT $37
• Cut to Hold at Craig-Hallum; PT $40
• Initiations
• Capstone Copper (CS CN) Rated New Buy at Jefferies; PT C$13
• ERO Copper (ERO CN) Rated New Hold at Jefferies; PT C$30
• Filo Corp (FIL CN) Rated New Buy at Jefferies; PT C$34
• FTAI Aviation (FTAI) Rated New Outperform at RBC; PT $85
• Hudbay Minerals (HBM CN) Rated New Hold at Jefferies; PT C$13
• Ivanhoe Mines (IVN CN) Rated New Buy at Jefferies; PT C$25
• Louisiana-Pacific (LPX) Rated New Hold at Loop Capital; PT $82
• Mastercard (MA) Rated New Buy at NYKREDIT; PT $500
• NGEx Minerals (NGEX CN) Rated New Buy at Jefferies; PT C$12
• Phathom Pharma (PHAT) Rated New Buy at Stifel; PT $24
• Waste Connections (WCN CN) Rated New Hold at Baptista Research
• Western Exploration Inc (WEX CN) Rated New Outperform at Velocity Trade
• Zura Bio (ZURA) Rated New Overweight at Piper Sandler; PT $26

Data sources: Bloomberg, Reuters, CQG