Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Housing Starts, Building Permits, Initial Jobless Claims, New York Fed Services Business
Activity, Philadelphia Fed Business Outlook, Import and Export Price Indexes; 9:15ET Industrial Production, Capacity Utilization, Manufacturing (SIC) Production; 10:00ET Fed’s Barr testifies to Senate Committee, Fed’s Barkin on CNBC; 10:30ET Fed’s Harker speaks;
12:00ET Fed’s Mester speaks; 3:50ET Fed’s Bostic speaks

HIGHLIGHTS and News:  

• CHINA, RUSSIA TO DEEPEN MILITARY COOPERATION
• US$ holds trend line support
• 10-year yield hovering at its 200-day mvg avg

World stocks hit a record high as hopes of interest rates cuts in major economies extended a powerful month-long global bull run. Investors’ growing confidence was
reflected in a survey of fund managers by BofA Global Research: based on equity allocations and economic growth expectations, stood at its most bullish since November 2021. MSCI’s benchmark world stocks index was up for a sixth straight day. Japan’s economy
shrank an annualized 2% in the first quarter, more than expected.  Chinese President Xi and Russian President Putin condemned what they cast as increasingly aggressive US behavior and pledged to deepen their countries’ already close defense and military ties.
         

EQUITIES: 

US equity futures took a breather after rallying to all-time highs, with investors focus turning to a raft of Federal Reserve speakers for guidance after yesterday’s CPI supported a possible
pivot. NY Fed chief John Williams told Reuters he still needs more evidence to adjust interest rates. The Atlanta Fed’s GDPNow forecasting tool suggests a current quarter growth rate of 3.8%, more than double the pace set over Q1. Cisco Systems (CSCO) jumped
more than 4% post-market after earnings beat and boosting its current quarter revenue forecast.

Futures ahead of the bell: E-Mini S&P +0.1, Nasdaq +0.15%, Russell 2000 +0.05%, DJI +0.05%.

In pre-market trading, Walmart (WMT) shares climb 5.9% after the retailer increased its full-year projections for adjusted EPS and net sales growth. Chubb (CB) surged 11% after a Securities
& Exchange Commission filing showed Berkshire Hathaway built a $6.7 billion stake in the insurance group last quarter. Walmart (WMT) jumped over 4% after boosting its full year sales outlook following an earnings beat. AST Spacemobile (ASTS) shares are soaring
38% after AT&T said had it moved from a memorandum of understanding to signing a “definitive commercial agreement” with the company for a space-based broadband network. GoodRx (GDRX) shares gain 3.9% after Raymond James upgraded the stock to outperform. Grab
Holdings (GRAB) shares gain 3.3% after the ride-hailing and food delivery company reported first-quarter revenue came ahead of estimates. Prime Medicine Inc. (PRME) climbs 5.3% as it is upgraded to buy from neutral by Citi, following US FDA clearance of its
experimental therapy for a rare blood disorder to start human trials. JD.com (JD) US-listed shares are up 3.5% after the Chinese e-commerce firm beat earnings expectations. Deere & Co (DE) slumped 6% after the industrial equipment maker lowered its 2024 profit
forecast following a mixed set of second quarter earnings. The meme-stock craze continued to fizzle out, with GameStop (GME) and AMC plunging more than 13%.

There’s a nice little set-up in XLE with potential for upside momentum shift above the top line in the descending channel.

European gauges are lower as investors took profits from recent record highs and as German industrials continue to grapple with weak demand from China. Geopolitical tensions and a raft
of elections are heightening the risk that investors will be jolted by negative surprises, the ECB warned. The Stoxx Europe 600 Index is little changed after erasing earlier losses, with energy and autos weighing. Roche shares rise as much as 4.8% after the
Swiss pharma company reported positive early-stage results for its experimental drug being developed for obesity and type-2 diabetes. Insurer Swiss Re AG gained after reporting solid earnings. Siemens AG slipped on lowered guidance for its key digital industries
unit.  Stoxx 600 -0.05%, DAX -0.3%, CAC -0.4%, FTSE 100 +0.1%. Autos and Energy -1.1%. Basic Resources +0.9%.

Asian equities rallied the most in two weeks, driven by gains in technology stocks as the latest US inflation data reinforced expectations of interest-rate cuts this year. A softer dollar
and decline in US Treasury yields also helped sentiment in the region.  The MSCI Asia Pacific Index climbed 1.3%, with Tencent, Recruit Holdings and Tokyo Electron contributing the most to the gains. Mainland China shares snapped a three-day losing run, while
Hong Kong gained after returning from a holiday. China plans to hold a meeting with key officials tomorrow to discuss the property market.  The CSI 300 real estate index and mainland China property developers jumped 3.5% and 4.9%, respectively. Chinese biotech
stocks fell after a US House committee advances a bill to stop the US government from contracting with companies controlled by “foreign adversaries.” Australia was at the top of the leaderboard as soft jobs data pushed up RBA rate cut odds. ASX 200 +1.65%,
Hang Seng Index +1.6%, Nikkei 225 +1.4%, Vietnam +1.1%, Sensex +0.9%, Kospi +0.8%. Taiwan +0.7%, CSI 300 +0.4%.

FIXED INCOME: 
 

Treasuries are narrowly mixed with the curve flatter by ~3bps on the day, pivoting around a near-unchanged 10-year sector as post-CPI price action consolidates around
Wednesday’s session highs. 10-year yields lower by ~1bp on the day trading around 4.325%.  Traders are now pricing in a 72% chance of a September rate cut, according to the CME Group’s FedWatch. As European trading opened, better selling occurred in US Treasuries
due to softer core and semi-core 10yr yields seen in EGBS. Ray Dalio warned rising US government debt levels may hit Treasuries in an interview with the FT and advised investors to move some money to other markets. China sold a record amount of Treasury and
US agency bonds in the first quarter, offloading a total of $53.3 billion. Its stockpile of Treasuries slid in March to the lowest level since 2009.

METALS: 
   

Gold steadied as traders digested slowing US inflation data that raised the possibility of an interest rate cut by the Federal Reserve as soon as September. Meanwhile,
copper rose for another day because of a short squeeze on the Comex exchange. Spot gold -0.1%, silver -0.3%.   

ENERGY:   

Oil prices steadied after a relief rally sparked by data showing a slowdown in key US inflation data ran out of steam. Crude also found support Wednesday after weekly
storage data showed a fall in US oil inventories. Geopolitical tensions remain elevated as Israel appears to have launched an invasion of Rafah and Hezbollah has started attacks as well, with ceasefire talks having reached an impasse according to Qatar’s prime
minister. WTI is flat, Brent -0.05%, US Nat Gas +0.8%, RBOB +0.5%.

CURRENCIES:   

In currency markets, the dollar erased its earlier decline in the Asian session as traders took a breather ahead of the release of more US economic data and a slew
of Fed speakers. The US$, a popular haven during uncertain times, has dipped 2% against a basket of its peers since hitting a 17-month high in mid-April. USD/JPY pair dropped 0.8% before paring losses. The Japanese economy contracted in Q1 amid reduced consumer
and corporate spending. Aussie Dollar reversed its gains from earlier in the morning after Australia employment figures showed unemployment rising back up to a 4.1% rate. US$ Index +0.1%, GBPUSD -0.2%, EURUSD -0.15%, USDJPY +0.01%, AUDUSD -0.3%, USDCHF +0.2%,
USDNOK +0.4%.

Spot Bitcoin +0.3%, Ethereum -1%.

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
• B&G Foods (BGS) Raised to Neutral at Piper Sandler; PT $9
• Boyd Group Services (BYD CN) Raised to Outperform at National Bank
• Raised to Buy at Desjardins; PT C$290
• Coterra Energy Inc (CTRA) Raised to Buy at Truist Secs; PT $35
• Coupang (CPNG) Raised to Buy at UBS
• Energous (WATT) Raised to Buy at Ladenburg Thalmann; PT $2
• GoodRx Holdings (GDRX) Raised to Outperform at Raymond James
• Huya (HUYA) ADRs Raised to Equal-Weight at Morgan Stanley; PT $5.40
• Intel (INTC) Raised to Peerperform at Wolfe
• NIO Inc. (NIO) ADRs Raised to Buy at BOCOM Intl; PT $7.70
• Prime Medicine (PRME) Raised to Buy at Citi; PT $10
• Downgrades
• Capital Southwest (CSWC) Cut to Market Perform at JMP
• Cirrus Logic (CRUS) Cut to Hold at Benchmark
• EOG Resources (EOG) Cut to Hold at Truist Secs; PT $136
• Hello Group (MOMO) ADRs Cut to Underweight at Morgan Stanley; PT $6
• K92 Mining (KNT CN) Cut to Sector Perform at National Bank; PT C$9.25
• Occidental (OXY) Cut to Hold at Truist Secs; PT $69
• Initiations
• Context Therapeutics (CNTX) Rated New Overweight at Piper Sandler
• Dianthus Therapeutics Inc (DNTH) Rated New Buy at HC Wainwright; PT $40
• G. Mining Ventures (GMIN CN) Rated New Outperform at CIBC; PT C$3.50
• Intuitive Surgical (ISRG) Rated New Trading Buy at Mirae Asset Daewoo
• Nikola (NKLA) Rated New Buy at Bryan Garnier; PT $1
• Quaker Houghton (KWR) Rated New Overweight at Piper Sandler; PT $220
• Stryker (SYK) Rated New Trading Buy at Mirae Asset Daewoo; PT $374
• Texas Instruments (TXN) Rated New Underweight at Wells Fargo; PT $150

Data sources: Bloomberg, Reuters, CQG