Daily Game Plan

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

TODAY’S ECONOMIC DATA:  12:50ET Fed’s Barkin speaks; 1:00ET Fed’s Williams speaks

TODAY’S HIGHLIGHTS and News:  

• Israeli army carries out air strikes in eastern Rafah near neighborhoods that received evacuation orders — Reuters
• S&P 500 and Nasdaq testing/nearing
  50dma, key short-term resistance
  
• Apple positive back above its 200dma
  
• 10 year yield likely to test lower to its 50 and 200 day moving averages (dma)
  
• ROBINHOOD SHARES SINK 7% AFTER RECEIVING WELLS NOTICE FROM SEC

Global equities ticked higher in holiday-thinned trading on renewed bets that the Federal Reserve would likely ease interest rates this year, as traders turned their
attention to a line-up of central bank speeches this week. With the UK and Japan on public holidays, markets in mainland China and Europe got off to an upbeat start, with Friday’s softer-than-anticipated US jobs report underpinning sentiment by renewing market
rate-cut bets. With a light US economic calendar this week, the market’s direction may come from central bank officials, as well as policy meetings in the UK, Australia and Sweden. Meanwhile, the prospect of a Gaza ceasefire deal appeared slim, renewing fears
the Israel-Hamas conflict could still widen. Israel said it closed the humanitarian crossing into Gaza on Sunday after Hamas fired a rocket barrage from Rafah.    

EQUITIES: 

US equity futures advanced, with the S&P 500 poised to extend last week’s rally, as traders grew increasingly confident in the likelihood that the Federal Reserve will cut interest rates
this year. Apple slipped ahead of the bell after Berkshire Hathaway said it trimmed its stake, although Warren Buffet praised the company. Morgan Stanley, strategists are already starting to hone in on the importance of next week’s US inflation print for April.
“The price reaction on the back of this release may be more important than the data itself given how influential price action has been on investor sentiment amid an uncertain macro set up,” Michael Wilson wrote. Palantir Technologies, Astera Labs, Arista Networks,
Datadog and Constellation Energy all have earnings on tap this week. All are AI-related plays that are setting up.     

Futures ahead of the bell: E-Mini S&P +0.35%, Nasdaq +0.3%, Russell 2000 +0.8%, DJI +0.3%. A settle above the 50dma in both S&P 500 and Nasdaq would likely see further upside extension
this week.

In pre-market trading, Paramount (PARA) rises ~4% as it weighs Apollo and Sony’s $26 billion offer to buy the company. Perficient (PRFT) gains 55% after EQT agreed to buy the technology
consultant in a deal valued at about $3 billion including debt. Luminar Technologies (LAZR) falls 7.7% after the company confirmed it will cut about 20% of jobs and sub-lease parts or all of some facilities. Tyson Foods (TSN) climbs 1.8% after the company
raised its 2024 earnings outlook. Spirit Airlines (SAVE) fell 3% after its revenue forecast for the second quarter missed.

European gauges rose as optimism around a potential June rate cut by the European Central Bank grows at the start of another busy week for corporate earnings. S&P composite final purchasing
managers’ index for the euro zone was released showing business activity in the region expanded to 51.7 in April from March’s 50.3, its fastest pace in almost a year. ECB Chief Economist Philip Lane said recent data have made him more certain that inflation
is returning to the 2% goal, raising the likelihood of a first interest-rate cut in June. Among individual stocks, PostNL NV shares declined over 4% after it reported weak volumes. Demant A/S also fell as it reported a miss in sales driven by soft retail.
Atos SE turned lower as it faces competing offers that will frame discussions with its stakeholders around its restructuring. Stoxx 600 +0.6%, DAX +0.9%, CAC +0.7%, Italy’s FTSE MIB +1.1%. Insurance +1.4%, Autos +1.2%, Energy +1.2%, REITs and Retail lagged,
+0.1%.

Chinese shares led broad gains In Asia, as mainland markets played catchup following a three-day holiday break. The CSI 300 Index jumped ~2%, while stocks in Hong Kong extended a nine-day
winning streak. China’s services activity expansion slowed a touch amid rising costs, but growth in new orders accelerated and business sentiment rose solidly, a private sector survey showed today. Overall new business hit the highest since May last year.
Foreign funds added to their holdings of mainland shares via the links with Hong Kong on Monday, extending their monthly net purchase in April. Markets in Japan, South Korea and Thailand were shut for a holiday. Vietnam +1.7%, Shanghai Composite +1.2%, Taiwan
+1%, ASX 200 +0.7%, Hang Seng Index +0.5%, Singapore +0.3%, Sensex was flat. 

FIXED INCOME: 
 

Treasury yields reopen lower by 2bp to 3bp across the curve, after being closed for Japan and UK holidays. Gains have support from bunds, rallying on comments from
ECB Chief Economist Philip Lane. US economic data calendar is light this week, leaving focus on Treasury refunding auctions and about a dozen Fed speakers scheduled. Treasury auction cycle begins Tuesday with $58b 3-year note sale, followed by $42b 10- and
$25b 30-year new issues Wednesday and Thursday.

METALS: 
   

Gold and silver prices are solidly higher in early US trading amid improved investor risk sentiment in the general marketplace. Gold climbed as much as 1% on Monday,
following its first back-to-back weekly losses since February. Investors have been mulling a softer-than expected US jobs print that added to evidence the economy is gradually slowing, easing fears that markets are headed for a painful rut marked by high inflation
and sluggish growth. Spot gold +0.6%, silver +1.9%.

ENERGY:   

Crude oil prices rebounded after a weekly drop as Saudi Arabia’s price hikes over the weekend for customers in Asia signaled confidence in the outlook, while Israel’s
latest moves in the Gaza Strip put the focus back on tensions in the region. State-owned producer Saudi Aramco on Sunday said it was raising June prices for crude delivered to Northwest Europe, Asia and the Mediterranean. Saudi Aramco raised selling prices
of all its grades to Asia for June, with the key Arab Light oil hiked by more than some refiners estimated. Israel’s military has begun moving civilians out of Rafah and carried out air strikes in eastern Rafah near neighborhoods that received evacuation orders.
Israel’s defense minister claimed Hamas wasn’t serious about a deal and warned of “a powerful operation in the very near future in Rafah,” after Hamas attacked Israel’s main crossing point for delivering badly needed humanitarian aid, killing three soldiers. 
WTI +1%, Brent +0.9%, US Nat Gas +1.2%, RBOB +0.3%.

CURRENCIES:   

In currency markets, risk-sensitive currencies gained against the dollar, while the Japanese yen fell amid thinned trading volumes. The US dollar index fluctuated
while the yen weakened after a strong surge last week from Tokyo’s suspected currency intervention. The yen erased its rebound on Friday, as concern over Japan’s low interest rates outweighed any bullishness stoked by suspected official intervention and weaker-than-expected
US data. USDJPY is holding above the October 2022 significant high. The yen still remains the worst performing major currency so far this year with a loss of more than 8% against the dollar. The euro steadied after composite PMI data for April came in above
estimates, marking the second consecutive month of expansion. US$ Index is flat, GBPUSD +0.2%, EURUSD +0.1%, USDJPY +0.5%, AUDUSD +0.3%, USDNOK -0.4%.

Spot Bitcoin +0.5%, Ethereum +0.2%. Bitcoin nears $65,000 level after adding around 10% in the last four sessions.

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
• AMD (AMD) Raised to Buy at Phillip Secs; PT $190
• Bausch + Lomb (BLCO CN) Bausch + Lomb Raised to Overweight at Morgan Stanley; PT C$24.62
• Blueprint Medicines (BPMC) Raised to Market Perform at Leerink; PT $97
• Camden Property (CPT) Raised to Neutral at Piper Sandler; PT $110
• Chemomab Therapeutics (CMMB) ADRs Raised to Outperform at Oppenheimer
• CytomX (CTMX) Raised to Buy at Jefferies; PT $8
• Gerdau (GGBR4 BZ) ADRs Raised to Outperform at Itau BBA; PT $4.70
• Glaukos (GKOS) Raised to Buy at Jefferies; PT $125
• Melco Resorts (MLCO) ADRs Raised to Overweight at Morgan Stanley
• Micron (MU) Raised to Outperform at Baird; PT $150
• Mid-America (MAA) Raised to Outperform at Wedbush; PT $154
• NFI Group (NFI CN) Raised to Buy at Stifel Canada; PT C$18
• Silicon Motion (SIMO) ADRs Raised to Overweight at Morgan Stanley
• U.S. Steel (X) Raised to Overweight at Morgan Stanley; PT $48
• Wolverine World Wide (WWW) Raised to Buy at Seaport Global Securities
• Downgrades
• AdTheorent Holding (ADTH) Cut to Hold at Needham
• Comerica (CMA) Cut to Neutral at Citi; PT $56
• Daqo New Energy (DQ) ADRs Cut to Reduce at HSBC; PT $17.50
• European Residential REIT (ERE-U CN) Cut to Sector Perform at Scotiabank
• Peloton (PTON) Cut to Neutral at Citi; PT $4
• Perficient (PRFT) Cut to Market Perform at William Blair
• Ryan Specialty (RYAN) Cut to Peerperform at Wolfe
• Stellar Bancorp Inc (STEL) Cut to Neutral at Piper Sandler; PT $25
• Victoria’s Secret (VSCO) Cut to Underweight at Morgan Stanley; PT $15
• Initiations
• EHang Holdings (EH) ADRs Reinstated Overweight at Morgan Stanley
• Encore Energy (EU CN) Rated New Buy at HC Wainwright; PT C$10.26
• Jasper Therapeutics (JSPR) Rated New Buy at HC Wainwright; PT $65
• Kaspi.kz (KSPI KZ) ADRs Rated New Buy at BCC Invest; PT $148
• Lycos Energy Inc (LCX CN) Rated New Outperform at ATB Capital; PT C$5.50
• Pacs Group (PACS) Rated New Outperform at Oppenheimer; PT $31
• Rated New Buy at Truist Secs; PT $32
• Rated New Outperform at RBC; PT $30
• Rated New Buy at Citi; PT $32
• Rated New Overweight at JPMorgan; PT $27
• Patriot Battery Metals I (PMET CN) Rated New Buy at Argonaut Securities

Data sources: Bloomberg, Reuters, CQG