Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:00ET: Fed’s Bowman speaks; 10:00ET U. of Mich. Sentiment, Fed’s Logan speaks,
Fed’s Kashkari speaks; 12:45ET Fed’s Goolsbee speaks; 1:30ET Fed’s Barr speaks; 2:00ET Monthly Budget Statement

HIGHLIGHTS and News:  

• OpenAI will announce an AI-powered search product to compete with Google on Monday
• Biden administration is poised to unveil a sweeping decision on China tariffs as soon as next week
• Technology s/t negative relative to S&P 500
• All major indices remain positive above their 50 day moving averages
  
• Gold nearing s/t .618 resistance at 2386

Global shares rose to one-month highs on earnings optimism and US data that supported the case for interest-rate cuts, while the dollar held steady, giving commodities
a boost. EU corporate profits rose in the first quarter versus the previous three-month period for the first time since 2022, according to Deutsche Bank strategists. The long-awaited rebound in profit growth at European companies is set to accelerate as the
economy pulls out of recession. President Biden’s administration is poised to unveil a sweeping decision on China tariffs as soon as next week. The new tariffs will focus on industries including electric vehicles, batteries and solar cells. China’s car exports
surged 38% y-o-y to a record high in April, data showed.    

EQUITIES: 

US equity futures rose after a cooling labor market buoyed hopes for monetary easing later this year and as investors awaited comments from a number of Federal Reserve officials. Traders
will be watching for hints on the timing of policy easing before next week’s CPI data. Raphael Bostic told Reuters the Fed is likely still on track to lower interest rates this year, though the timing and extent of the cuts are uncertain. As investors await
a key US inflation print next week, value and cyclical sectors are helping to broaden out a rally that had been fueled by tech giants. All major averages on track for gains of more than 4% this week.

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

In pre-market trading, Nvidia (NVDA) gained 1.4% after Taiwan Semiconductor Manufacturing Co, the world’s largest chipmaker and a major supplier to Nvidia, reported a near 60% jump in
April sales. Akamai Technologies (AKAM) fell 10.6% after it forecast second-quarter revenue and profit below Wall Street estimates. SoundHound AI (SOUN), whose technology allows humans to interact conversationally with products such as phones and cars, jumped
16% after its first-quarter revenue beat. Bumble (BMBL) rises 3% as BofA upgrades the online dating company to buy from neutral on both valuation and upside to growth. CRH (CRH) gains 4.3% after what the analysts see as a positive start with performance driven
by pricing, early-season activity and favorable weather. Dutch Bros (BROS) gains 2.6% after Cowen raises the drive-thru coffee chain’s rating to buy from hold. Ginkgo Bioworks (DNA) slumps 11% after the genetic engineering company cut its revenue forecast.
JFrog (FROG) drops 12% as the software development company’s earnings report failed to impress. MacroGenics (MGNX) sinks 68% after the drug developer reported five deaths in a mid-stage trial of its investigative therapy for prostate cancer. Natera (NTRA)
rises as much as 20% after boosting its revenue guidance. Novavax (NVAX) surges as much as 217% after the vaccine maker signed a licensing agreement with Sanofi that includes commercializing a combined Covid-19 and flu shot. Progyny (PGNY) drops 25% after
it reported first quarter revenue below estimates and cut revenue guidance. Sweetgreen (SG) climbs 19% after the salad restaurant chain’s revenue topped estimates. Yelp (YELP) drops 4.1% after it adjusted Ebitda guidance for the full year and missed the average
analyst estimate. Unity Software (U) falls as much as 4.2% after the video-game software development company reported an 8% drop in first-quarter revenue.

European gauges advanced and are set for their best week in more than three months on a slew of better-than-expected earnings reports and growing confidence that interest rate cuts are
still possible this year. The UK’s economy bounced back strongly from a shallow recession at the end of last year, with GDP jumping 0.6% in Q1, the best reading since late 2021. The Stoxx 600 rose to a record high with mining, utility and construction shares
leading gains.  Stoxx 600 +0.9%, DAX +0.6%, CAC +0.7%, FTSE 100 +0.8%. Basic Resources +1.7%, Utilities +1.6%, Construction +1.4%, Retail +1.4%, Energy +1.3%. Chemicals -0.4%, Media -0.2%.

Asian stocks rose, snapping two-days of declines, with shares in Hong Kong rallying the most in the region on signs that authorities will extend support for the market. The MSCI Asia
Pacific Index climbed 0.8%, erasing a weekly loss. The Hang Seng Index jumped after news that regulators were considering a proposal to exempt individual investors from paying taxes on dividends earned from Hong Kong stocks bought via the Stock Connect. Meanwhile,
equities in mainland China ended flat as traders assessed a report saying the Biden administration is poised to unveil a sweeping decision on China tariffs as soon as next week. Citigroup downgraded Chinese stocks to neutral, saying that the recent rally has
occurred despite weakening fundamentals. It upgraded India to overweight. Hang Seng Index 2.3%, Singapore +0.75%, Taiwan +0.7%, Kospi +0.6%. Topix +0.5%, Sensex +0.4%, ASX 200 +0.3%, CSI 300 +0.05%. Vietnam -0.3%, Philippines -0.5%.

FIXED INCOME: 
 

Treasuries are little changed with futures holding Thursday’s advance, underpinned by gains for gilts following a raft of UK data including GDP, manufacturing and
industrial production. Gilts rallied despite stronger-than-expected UK GDP figures, with UK 10-year yields falling 3bps. US 10-year around 4.47% and curve is relatively flat.  

METALS: 
   

Gold advanced to the highest level in three weeks aided by weaker US economic data that bolstered expectations for an interest rate cut by the Federal Reserve later
this year. Investors will be closely watching April US producer price index and the consumer price index out next week for signs that inflation has resumed its downward trend towards the Federal Reserve’s 2% target rate. Spot gold +0.9%, silver +0.8%.

ENERGY:   

Crude oil futures climbed for a third straight day, with WTI nearing $80 per barrel, back near its 200 day moving average. Prices were lifted by an improving global
demand outlook, especially from China’s increased crude imports in April. Additionally, ongoing hostilities in the Middle East between Israel and Hamas added geopolitical risk premium. The outlook for OPEC+ production policy remains uncertain ahead of their
June 1 meeting.  WTI +0.7%, Brent +0.6%, US Nat Gas -0.6%, RBOB +0.6%.

CURRENCIES:   

In currency markets, the US Dollar Index remained steady, on track for a 0.2% weekly gain. The Australian and New Zealand dollars retreated against the US dollar
after reports that the US is set to impose new targeted tariffs on China, reigniting trade tensions. The yen was slightly lower, with Japan’s finance minister repeating Tokyo’s recent warnings that it was ready to take action against disorderly currency moves.
Sterling wavered after data showed the UK economy bouncing back from a shallow recession. The account from the European Central Bank’s Governing Council meeting on April 10-11 will be scoured by market participants for any hints on the number of cuts that
will follow the first interest-rate reduction in June and the timing of those moves. Norway’s krone firmed after data showed the underlying inflation rate fell less than analysts expected last month, likely reducing expectations that the central bank will
deliver its first interest-rate cut this year.US$ Index +0.03%, GBPUSD +0.03%, EURUSD -0.04%, USDJPY +0.2%, AUDUSD -0.2%, USDNOK -0.3%, NZDUSD -0.2%.

Spot Bitcoin +1%, 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
• 3M Co (MMM) Raised to Buy at HSBC; PT $115
• Arista Networks (ANET) Raised to Buy at CFRA
• Array (ARRY) Raised to Outperform at Oppenheimer; PT $20
• Bilibili (BILI) ADRs Raised to Buy at CLSA; PT $16.80
• Bumble (BMBL) Raised to Buy at BofA; PT $14
• Cheesecake Factory (CAKE) Raised to Buy at Citi; PT $47
• Copperleaf Technologies (CPLF CN) Raised to Outperform at National Bank
• Raised to Speculative Buy at Canaccord
• Dutch Bros (BROS) Raised to Buy at Cowen; PT $46
• HBT Financial (HBT) Raised to Outperform at Raymond James; PT $23
• iA Financial (IAG CN) Raised to Outperform at CIBC; PT C$100
• Lear (LEA) Raised to Overweight at Morgan Stanley; PT $160
• Relay Therapeutics (RLAY) Raised to Overweight at Barclays; PT $15
• Roblox (RBLX) Raised to Neutral at MoffettNathanson LLC; PT $26
• Rogers Sugar (RSI CN) Raised to Buy at Desjardins; PT C$7.50
• Sienna Senior Living (SIA CN) Raised to Sector Outperform at Scotiabank
• Squarespace (SQSP) Raised to Buy at Mizuho Securities; PT $50
• TPG (TPG) Raised to Overweight at Morgan Stanley; PT $52
• Warner Bros Discovery (WBD) Raised to Overweight at KeyBanc; PT $11
• Downgrades
• Baxter (BAX) Cut to Hold at Cowen; PT $40
• Brookfield Corp (BN CN) Cut to Sell at Veritas Investment Research Co
• Cerence (CRNC) Cut to Equal-Weight at Wells Fargo; PT $6.50
• Collegium (COLL) Cut to Neutral at Piper Sandler; PT $39
• Electronic Arts (EA) Cut to Hold at DZ Bank; PT $135
• Epam Systems (EPAM) Cut to Sector Perform at Scotiabank; PT $245
• Ginkgo Bioworks (DNA) Cut to Underperform at William Blair
• Globant (GLOB) Cut to Sector Perform at Scotiabank; PT $200
• MacroGenics (MGNX) Cut to Hold at Cowen
• Cut to Hold at Stifel; PT $7
• Cut to Market Perform at BMO; PT $8
• PennantPark Investment (PNNT) Cut to Market Perform at Raymond James
• Performance Food (PFGC) Cut to Hold at CFRA
• Planet Fitness (PLNT) Cut to Hold at Stifel; PT $70
• Progyny (PGNY) Cut to Sector Weight at KeyBanc
• RAPT Therapeutics (RAPT) Cut to Equal-Weight at Barclays; PT $4
• Cut to Neutral at Guggenheim
• Ready Capital (RC) Cut to Neutral at Ladenburg Thalmann
• Safehold Inc (SAFE) Cut to Neutral at Mizuho Securities; PT $20
• Telus International CDA (TIXT CN) Cut to Sector Perform at Scotiabank
• Tidewater Midstream (TWM CN) Cut to Sector Perform at RBC
• Vital Farms (VITL) Cut to Hold at Stifel; PT $40
• Initiations
• Aquestive Therapeutics (AQST) Rated New Outperform at Leerink; PT $8
• Evry (EVRY NO) TriSalus Life Sciences Rated New Buy at JonesTrading; PT $16
• Lumina Gold Corp (LUM CN) Rated New Outperform at BMO
• Prime Mining Corp (PRYM CN) Rated New Outperform at BMO; PT C$2.75
• Snowline Gold (SGD CN) Rated New Outperform at BMO; PT C$10.50
• Soleno (SLNO) Rated New Outperform at Baird; PT $72
• SOW GOOD INC (SOWG) Rated New Buy at Craig-Hallum; PT $20
• Rated New Buy at Roth MKM; PT $15

Data sources: Bloomberg, Reuters, CQG