Daily Game Plan

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

DATA/HEADLINES   8:30ET Import – Export Price Indexes, Empire Manufacturing; 9:15ET Industrial Production, Capacity
Utilization, Manufacturing (SIC) Production; 10:00ET U. of Mich. Sentiment

S&P/Russell Index rebalance AND Expiration – quadruple witching expiration of stock index futures, stock index options, single stock options, and single stock futures today.

TODAY’S HIGHLIGHTS:  

• Zelensky to visit White House and capitol Hill next week

Global equity markets are higher on upbeat Chinese data and as yesterday’s stronger-than-expected US retail sales data boosted confidence that the Federal Reserve
can engineer a soft landing. Global equity funds attracted substantial inflows in the latest week, buoyed by hopes the US Federal Reserve might halt its rate increases amid easing inflationary concerns. European stocks are set for their best weekly performance
in two months, buoyed by hopes that the European Central Bank is ending its rate rise cycle and data that suggested China’s wobbly economy may be regaining some momentum. Data today showed Chinese gauges of retail sales and industrial output for August topped
economists’ expectations, though its property slump deepened, threatening to undercut a flurry of support measures. Attention is also turning to the Federal Reserve’s meeting next week, with traders betting at the US will keep interest rates on hold.                                         

EQUITIES: 

US equity futures are slightly lower as traders watched for fallout from the auto strike. The United Auto Workers union launched simultaneous strikes at three factories owned by General
Motors, Ford and Chrysler parent Stellantis, kicking off the most ambitious US industrial labor action in decades. Markets were braced for today’s $4 trillion quadruple witching event — which has the potential to trigger volume spikes and volatility. Equity
funds saw the biggest weekly inflows in 18 months amid growing investor confidence that the US is headed for a soft landing, according to BofA analysis of EPFR data. Deutsche Bank said such an outcome would see the S&P 500 rally by 11% by the end of 2023,
while UBS Global Wealth sees an 8-10% boost by mid-2024.                                 

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.3%, Russell 2000 -0.4%, Dow -0.05%.

In pre-market trading, Adobe (ADBE) falls over 2% after the software company gave an outlook that analysts see as conservative even as it reported third-quarter results that beat expectations.
Arm Holdings (ARM) rose as much as 10%, putting stock on track to extend gains after rallying 25% in its highly-anticipated trading debut on Thursday. Canopy Growth (CGC) shares jump 10% after the cannabis company ceased funding for BioSteel Sports Nutrition
on Thursday. Iovance (IOVA) jumps 16% after the FDA extended its target action date for its treatment for advanced melanoma, lifileucel, saying that there are no major review issues. Nikola (NKLA) climbs 11%, putting the electric-vehicle maker on track to
extend Thursday’s 32% advance.

European equities rally after better-than-expected economic data in China fueled hopes stimulus measures are paying off. CAC 40 outperforms peers, boosted by exposure to luxury companies.
Consumer products, autos and travel are the strongest performing sectors.  Stoxx 600 +0.5%, DAX +0.7%, CAC +1.3%, FTSE 100 +0.6%. Basic Resources +1.7%, Autos +1.4%, Travel & Leisure +1.4%, REITs -1.4%. 

Asian stocks advanced as upbeat economic data from China further supported sentiment. The MSCI Asia Pacific Index climbed 0.7%,  with TSMC, BHP and Toyota contributing the most to the
advance. Materials and consumer discretionary sectors outperformed after the latest economic figures soothed concerns over the world’s two-largest economies. Stocks in Hong Kong turned higher after the latest indicators showed China’s economy picked up steam
in August. But China’s onshore benchmark failed to sustain gains and finished lower, as overseas investors reduced mainland equities even after the People’s Bank of China added more cash into markets. ASX 200 +1.3%, Kospi +1.1%, Nikkei 225 +1.1%, Hang Seng
Index +0.75%, Taiwan +0.7%, Sensex +0.5%, CSI 300 -0.3%.  

FIXED INCOME: 
 

Treasuries grind lower with futures near lows of the day, following wider losses in core European rates that pare most of Thursday’s post-ECB gains. US yields cheaper
by 3bp to 4bp across the curve with 10-year around 4.32%, cheaper by ~3.5bp on the day.                

METALS: 
           

Gold prices gained as the dollar eased against the yuan after promising China economic data boosted recovery hopes in the world’s top bullion consumer. Gold +0.3%
, silver +1.5%.                                   

ENERGY:  

Oil prices edged higher , extending a push above the $90-a-barrel threshold. Both Brent and WTI settled at their highest respective levels of the year on Thursday;
amid growing expectations of tighter supply after Saudi Arabia and Russia moved to draw down global inventories and extend their oil output cuts through to the end of the year. WTI +0.3%, Brent +0.3%, US Nat Gas -0.5%, RBOB -0.25%.                           

CURRENCIES:   

The US dollar inched lower and is set to snap eight straight weeks of gains after data showed China’s economic activity picked up pace in August. The yuan hit two-week
highs against the U.S. dollar after data showed China factory output and retail sales in August beat forecasts. The euro recouped some of its Thursday losses. Expectations that the European Central Bank is done raising rates has hammered the euro. The currency
is heading toward its ninth straight week of losses, the longest run since it was created over two decades ago. Yen falls after a report says Bank of Japan officials see a discrepancy between what Governor Kazuo Ueda said in a recent interview and how traders
interpreted the remarks. US$ Index -0.1%, GBPUSD -0.15% ,USDJPY +0.3%, EURUSD +0.1%, AUDUSD -0.05%.         

Bitcoin -0.7%, Ethereum -0.4%. 

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
• Amkor Technology Raised to Strong Buy at CFRA; PT $30
• Apellis Pharma Raised to Overweight at Wells Fargo; PT $64
• Cousins Properties Raised to Buy at Truist Secs; PT $28
• Estee Lauder Raised to Neutral at Redburn
• KeyCorp Raised to Overweight at Piper Sandler; PT $13.50
• Keysight Raised to Overweight at Morgan Stanley; PT $165
• MorphoSys ADRs Raised to Neutral at Goldman; PT $9.25
• PagSeguro Raised to Buy at New Street Research; PT $14
• Rogers Communications Raised to Outperform at RBC; PT C$72
• Shake Shack Raised to Buy at Northcoast; PT $85
• Unity Software Raised to Buy at BofA
• Downgrades
• DoorDash Cut to Market Perform at MoffettNathanson LLC
• Laurentian Bank of Canada Cut to Neutral at CIBC; PT C$37
• Lindsay Cut to Hold at Stifel; PT $135
• New Relic Cut to Neutral at DA Davidson; PT $87
• Staar Surgical Cut to Hold at Benchmark
• Truist Financial Cut to Neutral at Piper Sandler; PT $32
• Vornado Realty Cut to Hold at Truist Secs; PT $27
• Initiations
• 3M Co Rated New Hold at HSBC; PT $109
• Applied Materials Rated New Outperform at Wolfe; PT $185
• ARM Holdings ADRs Rated New Hold at Needham
• Casella Waste Reinstated Buy at Goldman; PT $100
• Cava Group Rated New Hold at Loop Capital; PT $40
• Celsius Holdings Rated New Outperform at Cowen; PT $250
• Cipher Mining Rated New Buy at BTIG; PT $6
• CrowdStrike Rated New Buy at HSBC; PT $200
• Deere Rated New Buy at HSBC; PT $486
• DocuSign Rated New Reduce at HSBC; PT $42
• Expensify Reinstated Underweight at JPMorgan
• Fastenal Rated New Hold at HSBC; PT $59
• Hesai Group ADRs Rated New Buy at Citic Securities; PT $16
• Jacobs Rated New Hold at HSBC; PT $149
• KLA Corp Rated New Outperform at Wolfe; PT $600
• Lam Research Rated New Outperform at Wolfe; PT $825
• Lundin Gold Rated New Buy at Veritas Investment Research Co
• Martin Marietta Rated New Reduce at HSBC; PT $376
• Microsoft Rated New Hold at HSBC; PT $347
• Opal Fuels Rated New Sell at Goldman; PT $5.80
• Oracle Rated New Buy at HSBC; PT $144
• Palantir Rated New Hold at HSBC; PT $16
• Salesforce Inc Rated New Buy at HSBC; PT $267
• ServiceNow Rated New Buy at HSBC; PT $704
• Snowflake Rated New Buy at HSBC; PT $201
• Trane Technologies Rated New Buy at HSBC; PT $256
• Twilio Rated New Hold at HSBC; PT $67
• WM Rated New Buy at HSBC; PT $192
• Zoom Video Rated New Buy at HSBC; PT $83

Data sources: Bloomberg, Reuters, CQG