Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:00ET Fed’s Mester and Jefferson speak; 11:00ET: NY Fed 1-Yr Inflation Expectations

Among the most critical data for the Fed will be April CPI (Wed.), one of two monthly prints the FOMC will have in hand at the June 11-12 meeting (May CPI report will be released on the
second day of the meeting). Expectations are for core CPI to moderate from March, though the headline will rise due to higher gasoline and food prices. However, the Fed cares more about the core PCE deflator — next due May 31.

HIGHLIGHTS and News:  

• Michael Cohen to take the stand in the Trump trial today
• OpenAI event today for ‘some ChatGPT and GPT-4 updates’
• Roaring Kitty is back and Gamestop stock is rallying
  
• WTI higher but remains s/t negative below the 200dma
• Gold holds s/t .618 retracement resistance
  
• All four major indices remain positive above their 50 day moving averages
  

Global stocks took a breather as investors awaited key data later this week that may cast light on the outlook for interest rates on both sides of the Atlantic. Attention
will be on US producer prices due Tuesday, ahead of April’s inflation print on Wednesday. First-quarter GDP and employment data for the euro region are also due Wednesday. US-China trade tensions weighed on equities with a report the Biden administration will
quadruple tariffs on Chinese electric vehicles and sharply increase levies for other key industries this week. The total tariff on Chinese EVs will rise to 102.5% from 27.5%, sources said. Others will double or triple in targeted industries. The plan is mostly
symbolic as China doesn’t rely on US consumers for the targeted sectors.   

EQUITIES: 

US equity futures edged higher as investors await US CPI data this week that could be a potential catalyst, and weigh earnings. Retail titans Walmart (WMT) and Home Depot (HD) report
later this week, as does Cisco Systems (CSCO), among others. S&P 500 companies are on track to post their best quarterly earnings relative to expectations in at least two years. Alphabet is lower ahead of the bell after Bloomberg reported that
Apple is closing in on an agreement to use OpenAI’s technology on the iPhone. Intel and Apollo are close to a deal which would see the investment firm supply more than $11B to help it build a chip plant in Ireland, the WSJ reported. Squarespace will
go private by Permira in an all-cash transaction valued at approximately $6.9 billion.  

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.3%, Russell 2000 +0.6%, DJI +0.2%.

In pre-market trading, Apple (AAPL) gained over 1% on reports that it may be considering a deal with OpenAI as it looks to build out artificial intelligence to its devices. Alphabet (GOOGL)
slips 1.7%. AC Immune (ACIU) jumps 52% after Takeda agreed to develop the company’s immunotherapies. GameStop (GME) shares rise 36% following a cryptic post on X from Keith Gill, known by his social media alias “Roaring Kitty.” Incyte (INCY) climbs 5.5% after
announcing that its board approved a share repurchase authorization of $2B. Penn Entertainment (PENN) drops 2.9% after BofA downgrades the casino and gaming company to neutral following what it describes as disappointing results. Squarespace (SQSP) rises 13%
after entering into a definitive agreement to go private with Permira. Tencent Music Entertainment’s US-listed shares (TME) are up 3.5% after the online music platform reported first-quarter results that beat expectations.

Apple is holding above its 200dma and would like see some upside momentum with a settle above the .618 retracement.

European gauges are inching lower, Construction and utilities the biggest laggards, while autos outperform. The Stoxx Europe 600 index was little changed after posting its best weekly
return since January amid optimism the European Central Bank is poised to ease policy as soon as next month. Among individual movers in Europe, AP Moller-Maersk A/S jumped as much as 10% in Copenhagen after analysts at Citigroup lifted their earnings estimates
to reflect a recent rise in freight rates. Shell Plc rose to a record in London. Stoxx 600 -0.05%, DAX -0.2%, CAC -0.2%, FTSE 100 -0.1%. Autos +1.1%, Healthcare +0.4%. Construction -0.8%, Utilities -0.6%, Media -0.5%.

Asian stocks were mixed with shares in Hong Kong leading gainers while small cap stocks in China underperformed.  News of the China’s plan to sell ultra-long special bonds boosted sentiment
after weak data from the country published over the weekend had led to initial Asian stock losses. Chinese technology companies listed in Hong Kong gained ahead of earnings, with Alibaba and Tencent due to report on Tuesday. The MSCI Asia Pacific Index climbed
0.3%, reversing earlier losses after reports that China is planning to issue ultra-long bonds to support its economy. Mainland Chinese shares pared declines but closed with minor losses amid concerns over an escalation of US tariffs and weak local credit data.
Hang Seng Tech Index +1.4%, Philippines +1.4%, Hang Seng Index +0.8%, Taiwan +0.7%, Sensex +0.1%, ASX 200 and Kospi were roughly flat. CSI 300 -0.05%, Nikkei 225 -0.05%, Vietnam -0.4%, CSI 1000 -1%.

FIXED INCOME: 
 

Treasuries edge up as investors turn their attention to crucial US inflation data due this week. US yields richer by 1bp to 2bp across the curve with 10-year around
4.48%. Trading ranges narrow ahead of critical PPI and CPI reports Tuesday and Wednesday. A busy corporate new-issue slate is expected, with a weekly total of about $30 billion anticipated.

METALS: 
   

Gold slipped from a three-week high as traders assessed the potential for an economic slowdown in the US against persistent inflationary pressures. Markets will be
closely watching US April inflation data due Wednesday, which could shed more light on the US central bank’s easing trajectory. hedge funds trading Comex futures cut bullish bets on gold to a six-week low in the week ending May 7, according to the latest data
from the CFTC. Spot gold -0.7%, silver +0.5%.

ENERGY:   

Crude oil gained on optimism China’s bond plan may boost growth, and traders assessed the willingness of OPEC+ to agree to extend supply curbs at its upcoming policy
meeting. Iraq’s oil minister said any extension to output cuts is a matter for OPEC, and the country will stick to whatever the group decides.  Canada’s oil-sands hub is under a wildfire evacuation alert. China is replenishing stockpiles of coal and natural
gas amid falling prices, with gas imports in April jumping 21% y-o-y. Monthly reports – including updated supply-and-demand estimates – from OPEC and the International Energy Agency are due this week, but the main event will likely be the release Wednesday
of the U.S. consumer-price index for April.  WTI +0.7%, Brent +0.6%, US Nat Gas +0.1%, RBOB +0.8%.

CURRENCIES:   

In currency markets, the dollar traded mixed against its Group-of-10 peers within tight ranges, as traders await the release of US inflation data and a series of
Federal Reserve speakers this week. USDJPY edged higher despite earlier yen strength after the BOJ trimmed government bond buying, the first reduction since December. Sterling rose ahead of UK jobs market data due on Tuesday, which is expected to show a slight
increase in unemployment and cooling wage growth.  US$ Index -0.1%, GBPUSD +0.2%, EURUSD +0.2%, USDJPY +0.1%, AUDUSD +0.2%, USDNOK -0.5%.

Spot Bitcoin +2.3%, Ethereum +1.4%.

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
• BioLife Solutions (BLFS) Raised to Buy at Benchmark; PT $25
• Chesswood Group (CHW CN) Raised to Market Perform at Raymond James
• CI Financial (CIX CN) Raised to Outperform at Raymond James; PT C$21
• Cisco (CSCO) Raised to Neutral at BNPP Exane; PT $50
• Dream Finders Homes (DFH) Raised to Outperform at Zelman; PT $34.50
• InterRent REIT (IIP-U CN) Raised to Buy at Veritas Investment Research Co
• Liberty Latin America (LILA) Raised to Sector Outperform at Scotiabank
• MSCI (MSCI) Raised to Neutral at Redburn; PT $485
• Nexstar Media (NXST) Raised to Overweight at Wells Fargo; PT $221
• RBC (RY CN) Raised to Buy at Jefferies; PT C$157
• Red Rock Resorts (RRR) Raised to Neutral at BofA; PT $55
• Stellus Capital (SCM) Raised to Neutral at B Riley; PT $13.25
• Sun Life Financial (SLF CN) Raised to Buy at Veritas Investment Research Co; PT C$76
• Downgrades
• AirSculpt Technologies (AIRS) Cut to Market Perform at Raymond James
• Applied Materials (AMAT) Cut to Hold at Jefferies; PT $210
• AvalonBay (AVB) Cut to Inline at Evercore ISI; PT $202
• Decisive Dividend (DE CN) Cut to Market Perform at Raymond James
• Cut to Hold at Canaccord; PT C$8
• Diversified Royalty (DIV CN) Cut to Neutral at CIBC; PT C$3
• Equity Residential (EQR) Cut to Inline at Evercore ISI; PT $70
• KB Home (KBH) Cut to Underperform at Zelman; PT $69
• Morgan Stanley Direct Lending Fund (MSDL) US Cut to Market Perform at Raymond James
• Penn Entertainment Inc (PENN) Cut to Neutral at BofA; PT $17.50
• SolarEdge (SEDG) Cut to Neutral at Susquehanna; PT $56
• Telus International CDA (TIXT CN) Cut to Reduce at Veritas Investment Research Co
• Texas Instruments (TXN) Cut to Hold at Jefferies; PT $175
• Vizio Holding (VZIO) Cut to Market Perform at Barrington Research
• Initiations
• Almaden Minerals (AMM CN) Reinstated Under Review at Mackie Research Capital
• American Air (AAL) Rated New Buy at HSBC; PT $17.90
• Biodesix (BDSX) Rated New Buy at TD Cowen; PT $2.80
• Cardinal Energy (CJ CN) Reinstated Market Perform at BMO; PT C$8
• Centuri (CTRI) Rated New Overweight at Wells Fargo; PT $29
• Rated New Outperform at Baird; PT $30
• Rated New Neutral at JPMorgan; PT $28
• Rated New Sector Weight at KeyBanc
• Corbus Pharmaceuticals (CRBP) Rated New Outperform at RBC; PT $77
• Delta Air Lines (DAL) Rated New Buy at HSBC; PT $72.80
• Docebo (DCBO CN) Reinstated Outperform at CIBC; PT C$72.45
• Ibotta (IBTA) Rated New Neutral at Goldman; PT $103
• Rated New Overweight at Wells Fargo; PT $131
• Rated New Buy at Citi; PT $120
• Rated New Market Outperform at JMP; PT $130
• Macom (MTSI) Reinstated Buy at Jefferies; PT $135
• Mastercard (MA) Rated New Overweight at Piper Sandler; PT $531
• Onto Innovation Inc (ONTO) Reinstated Buy at Jefferies; PT $265
• Southwest Air (LUV) Rated New Hold at HSBC; PT $27.80
• Southwest Gas (SWX) Rated New Equal-Weight at Wells Fargo; PT $77
• TScan Therapeutics (TCRX) Rated New Buy at Janney Montgomery; PT $11
• United Airlines (UAL) Rated New Buy at HSBC; PT $69.20
• Valeura Energy (VLE CN) Rated New Buy at Canaccord; PT C$9.50
• Visa (V) Rated New Overweight at Piper Sandler; PT $322

Data sources: Bloomberg, Reuters, CQG