Daily Game Plan

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

TODAY’S ECONOMIC DATA:  10:00ET Leading Index; 10:15ET Fed’s Waller, Kashkari speak; 11:45ET President Biden speaks;
12:15ET Fed’s Daly speaks

HIGHLIGHTS and News:  

• Microsoft will launch its custom Cobalt 100 chips as a public preview at its Build conference next week
  
• GAMESTOP MAY SELL UP TO 45M SHARES OF CLASS A STOCK
• Boeing’s annual meeting kicks off today
• Scottie Scheffler detained by police
  
• Crude oil holds its key 200 week mvg avg again
• US$ getting a bounce after holding s/t trend line

Global stocks eased as Federal Reserve officials hinted US interest rates may not fall any time soon. More Fed and ECB officials will speak today. China’s consumer
spending growth surprisingly slowed in April to 2.3% year on year, while industrial production accelerated more than estimated. Home prices fell the most in a decade. Elsewhere, Singapore’s exports posted a bigger-than-expected 9.3% decline on year.           

EQUITIES: 

US equity futures fluctuated, showing caution amid the repricing of rate-cut bets to only one reduction in 2024. Several Fed policymakers said the central should keep borrowing costs
higher for longer as they await more evidence that inflation is easing. BlackRock’s Rick Rieder said the best way for the Fed to temper inflation is to lower rates, not hold them higher, because Americans are earning more than they have in years from fixed-income
investments. Investors will be tracking comments from the Fed’s Christopher Waller, Neel Kashkari and Mary Daly today. Traders expect roughly two quarter-point cuts from the Fed this year, with November being the most likely starting point.

Futures ahead of the bell: E-Mini S&P is flat, Nasdaq +0.1%, Russell 2000 -0.25%, DJI is flat.

Staples starting to outpace Discretionary

In pre-market trading, Reddit jumped as much as 15% on a partnership with OpenAI that’ll bring its content to ChatGPT. GameStop shares tumbled 25% after the company said it could sell
up to 45 million shares class A stock in an open market agreement and reported a drop in preliminary first-quarter net sales. The stock has largely reversed the rally that took it up 179% to start the week. The company said it intends to use the proceeds for
general corporate purposes, which may include acquisitions and investments. Cracker Barrel (CRBL) shares slide 11% after the restaurant chain reduced its quarterly dividend as the company increases investment in its business. DXC Technology (DXC) shares sink
22% after the IT services company gave a full-year forecast that was weaker than expected. Doximity (DOCS) shares rise 14% after the application software company gave a first-quarter forecast that is stronger than expected. Take-Two Interactive Software (TTWO)
shares drop 2.4% after the video-game giant issued a weak full-year forecast.

European gauges edge lower, weighed down by rates-sensitive sectors such as tech and real estate. ECB board member Isabel Schnabel warned against back-to-back interest-rate cuts in June
and July, saying that a reduction in the later month doesn’t seem warranted. Swap traders continue to price in three ECB rate cuts this year, with a first reduction likely next month.  Luxury group Richemont rallied over 5% after naming Nicolas Bos as chief
executive officer in a management shake-up.  Stoxx 600 -0.3%, DAX -0.3%, CAC -0.5%, FTSE 100 -0.4%. Utilities -1.3%, REITs -1.1%, Construction -0.9%, Travel & Leisure -0.8%, Technology -0.8%. Banks and Basic Resources are +0.5%.

Asian shares were mixed, with a late rally in Chinese stocks countering weakness in tech-heavy markets like South Korea. The MSCI Asia Pacific Index inched lower by 0.1%, ending the week
with a gain of 2.2%. China led gains in the region after the government unveiled a series of “historic” steps to underpin the property sector, which has weighed on overall economic growth.  A gauge of property stocks listed in mainland China rose as much as
3.9% to its highest level since November after China removes the floor on mortgage rates and lowers the minimum down payment ratios for individual homebuyers. The PBOC will unleash $41.5 billion in cheap funding to help state-owned companies buy unsold homes.
CSI300 +1%, Hang Seng Tech +1%, Hang Seng Index +0.9%, Sensex +0.3%, Vietnam +0.3%, Topix +0.3%, Singapore +0.25%. Taiwan -0.2%, Nikkei 225 -0.3%, ASX 22 -0.5%, Kospi -1%.

FIXED INCOME: 
 

Treasury yields drift higher during Asia and early London session, following wider losses across core European rates after comments from ECB’s Schnabel. US yields
cheaper by up to 3bp across long-end of the curve which leads losses on the day, steepening 2s10s and 5s30s spreads by 2bp, unwinding a portion of Thursday’s flattening move. US 10-year yields around 4.39%. Today’s session includes three Fed speakers, with
a light data slate.

METALS: 

Gold ticks higher after Chinese Industrial Production data showed a 6.7% rise year-over-year, beating expectations for +5.5%. On the demand side, robust retail demand
in China and efforts to stabilize the property sector have supported gold prices. However, central bank purchases, notably by China’s central bank, slowed in April as gold prices reached a record high. Silver has outperformed gold this year, rising 25% on
strong financial and industrial demand. Spot gold +0.5%, silver +0.7%.

ENERGY:   

Oil prices fluctuated in a narrow range overnight as traders start to look ahead to the OPEC+ meeting on June 1 for further direction. With two consecutive weeks
of declines in U.S. crude stockpiles and expectations of additional economic stimulus measures from China, analysts are optimistic. China is poised to continue replenishing its crude reserves at a rapid rate in May after adding more than 30 million barrels
over the past month, according to Kpler and Vortexa. China’s industrial output increased by 6.7% year on year in April, accelerating from 4.5% in March, indicating a recovery in its manufacturing sector and potential stronger future demand. WTI -0.1%, Brent
-0.2%, US Nat Gas +1.3%, RBOB +0.6%.

CURRENCIES:   

In currency markets, the dollar headed for a second daily advance while the yen extended declines after the Bank of Japan kept debt purchases unchanged in its regular
operations today following a surprise reduction on Monday. Mixed economic data from China offered support to the greenback during Asia hours.  US$ Index +0.3%, GBPUSD -0.1%, EURUSD -0.25%, USDJPY +0.3%, AUDUSD +0.4%, USDCHF +0.3%, NZDUSD -0.3%.

Spot Bitcoin +1.5%, Ethereum +3%. Senate Majority Leader Chuck Schumer joined 10 other Democrats in defying Joe Biden and passed a measure that would undo SEC guidance
on cryptocurrency accounting, sending the measure to the president’s desk on Thursday with stronger-than-expected bipartisan support. The White House has already said Biden would veto it.

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
• Alaska Air (ALK) Raised to Outperform at Wolfe; PT $55
• AspenTech (AZPN) Raised to Buy at Berenberg; PT $255
• Bath & Body Works (BBWI) Raised to Neutral at JPMorgan; PT $53
• Coinbase (COIN) Raised to Neutral at BofA
• Darden (DRI) Raised to Buy at BTIG; PT $175
• DuPont de Nemours (DD) Raised to Buy at Jefferies; PT $101
• Euronet (EEFT) Raised to Peerperform at Wolfe
• JD.com (JD) ADRs Raised to Buy at BOCOM Intl; PT $40
• ADRs Raised to Outperform at Macquarie; PT $40
• Littelfuse (LFUS) Raised to Outperform at Baird; PT $300
• Robinhood (HOOD) Raised to Buy at BofA
• Tanger Inc (SKT) Raised to Sector Perform at Scotiabank; PT $28
• United Airlines (UAL) Raised to Outperform at Wolfe; PT $76
• Viking Therapeutics (VKTX) Raised to Strong Buy at Raymond James
• Downgrades
• Baidu (BIDU) ADRs Cut to Equal-Weight at Morgan Stanley; PT $125
• ADRs Cut to Neutral at Macquarie
• BioMarin (BMRN) Cut to Neutral at Baird; PT $72
• Catalent (CTLT) Cut to Sell at Argus
• Corpay (CPAY) Cut to Underperform at Wolfe; PT $295
• Epam Systems (EPAM) Cut to Peerperform at Wolfe
• Lithia & Driveway (LAD) Cut to Neutral at Guggenheim
• Macerich (MAC) Cut to Sector Underperform at Scotiabank; PT $14
• Quipt Home Medical Corp (QIPT CN) Cut to Underperform at Raymond James
• SoundThinking Inc (SSTI) Cut to Market Perform at William Blair
• Weibo (WB) ADRs Cut to Underweight at Morgan Stanley; PT $10
• Initiations
• AbbVie (ABBV) Rated New Overweight at Cantor; PT $200
• Beachbody (BODI) Rated New Buy at Canaccord; PT $13
• Capricor Therapeutics (CAPR) Rated New Outperform at Oppenheimer
• Confluent (CFLT) Rated New Outperform at Oppenheimer; PT $37
• Dell Technologies (DELL) Rated New Outperform at Haitong Intl; PT $197
• Didi Global (DIDIY) ADRs Rated New Buy at GF Securities; PT $5.60
• Grab Holdings (GRAB) Resumed Buy at Deutsche Bank
• Kanzhun (BZ) ADRs Rated New Buy at Blue Lotus; PT $22
• MINISO (MNSO) ADRs Rated New Buy at Blue Lotus; PT $34
• Ree Automotive (REE) Rated New Buy at Roth MKM; PT $14

Data sources: Bloomberg, Reuters, CQG