Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:30ET Canada May Manufacturing PMI; 9:45ET S&P Global US Manufacturing PMI; 10:00ET Construction
Spending, ISM Manufacturing, ISM Prices Paid; 11:00ET Mexico May Manufacturing PMI

Canada rate decision, Wednesday. ECB rate decision, Thursday. Fed officials are expected to refrain from commenting until after their June 12 policy announcement.

HIGHLIGHTS and News:  

• GameStop stock surged as much as 103% premarket
  
• AMD is speeding up new AI processors
• Trump joined TikTok in a bid to reach young voters
  
• Waste Management will buy Stericycle
  
• Rupert Murdoch, 93, tied the knot for the fifth time on Saturday
  

Global stocks rallied to start the week with Indian shares soaring to a record as exit polls indicated a victory for Prime Minister Narendra Modi. The MSCI Emerging
Markets Index added more than 2%, while data showed China’s factory activity grew at the fastest pace in about two years in May.  Elections results dominated the news flow on Monday, as Claudia Sheinbaum became Mexico’s first female leader in a landslide victory.
Focus this week will be on the ECB, which is considered almost certain to trim rates by a quarter point to 3.75% on Thursday. Markets also imply around an 80% chance the Bank of Canada will cut at its meeting on Wednesday. Meanwhile, Israel pushed back against
a proposal outlined by the US to end its war on Hamas, rejecting a permanent cease-fire.      

EQUITIES:

US equity futures are higher ahead of ISM data expected to show US manufacturing improved slightly in May while remaining in contraction. Updates on the labor market will be front and
center to start the month with the May jobs report set for release on Friday.  Investors betting on further US equity gains in coming months will be disappointed, JPMorgan said. The Fed will likely keep rates on hold for an “extended period of time” until
data show inflation is trending down, Neel Kashkari told the FT. Advanced Micro Devices unveiled its latest artificial intelligence processors on Monday and detailed its plan to develop AI chips over the next two years in a bid to challenge industry leader
Nvidia.    

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.6%, Russell 2000 +1.3%, DJI +0.03%. SPX holding a positive s/t tone after holding above its 50-day mvg avg.  

In pre-market trading, Nvidia (NVDA) gains 3% and Advanced Micro Devices (AMD) rises 1.6% after the CEOs of the chipmakers made artificial intelligence announcements in Taiwan. GameStop
shares more than doubled after the Reddit account run by “Roaring Kitty” Keith Gill posted what appeared to be a $116 million position, fanned speculation of a return to the meme stock craze. It was the account’s first post in three years. Autodesk (ADSK)
rise 6% after the software company said no financial statements will be restated or adjusted following the results of an investigation by the board’s audit committee. Boston Beer (SAM) slips 11% after Suntory Holdings said it is not in talks to buy the company.
MarineMax (HZO) gains 18% after Bloomberg News reported that OneWater Marine is in talks to acquire the company. Paramount Global (PARA) climbs 6% after Bloomberg reported Skydance Media CEO David Ellison’s latest offer for the company includes an option for
non-voting shareholders to cash out a portion of their stock for about $15 a share. Stericycle (SRCL) soars 16% after agreeing to be purchased by Waste Management.  Summit Therapeutics (SMMT) rises 16% after the drug developer said it raised about $200 million
while also expanding its license territories with Akeso for the drug ivonescimab.

European gauges had an early bounce and government bond yields dropped as investors looked forward to an interest rate cut from the ECB this week. Indices are well off their intraday
highs, but all sub-groups are in the green except for healthcare. Construction, telecom and retail sectors outperform.  Health-care stocks headed lower amid a slate of corporate news in the sector. GSK shares plunged ~10% in the wake of a court ruling that
the UK drugmaker, and others including Sanofi, must face trials over whether the former heartburn treatment Zantac causes cancer. European stocks face seasonal headwinds in June, when the benchmark index has typically dropped more than 1% on average over the
past two decades. French banks and insurers are in focus after S&P Global Ratings downgraded France and highlighted the government’s missed goals in plans to restrain the budget deficit. Stoxx 600 +0.4%, DAX +0.7%, CAC +0.3%, FTSE 100 +0.2%. Construction +1.6%,
Telecomm +1.5%, Retail +1.2%. Healthcare -0.9%. 

Asian equities rose on the back of the strong Chinese data, along with prints from Japan and South Korea, while Indian stocks hit record highs. Manufacturing activity expanded in Japan
for the first time in a year and in South Korea at the fastest pace in two years, surveys showed. Manufacturing activity in May also expanded in Taiwan, Indonesia, Vietnam and the Philippines. India’s Sensex jumped over 3% and the rupee strengthened the most
in a year as investors bet that a decisive election win would allow Modi to push through policies to drive economic growth. The MSCI Asia Pacific Index climbed 1.7%, with technology stocks after Nvidia announced plans to upgrade its AI accelerators every year,
buoying shares of its suppliers in Asia. Sensex +3.4%, Hang Seng Index +1.8%, Kospi +1.7%, Taiwan +1.7%, Vietnam +1.4%, Nikkei 225 +1.1%, ASX 200 +0.8%, Singapore +0.4%, CSI 300 +0.25%. CSI 1000 -1.3%.

FIXED INCOME: 
 

Treasuries are richer across the curve led by long-end, following similar gains in gilts and bunds. Yields on 10-year Treasuries edged lower to 4.465%, while German
yields, which touched six-month highs last week, also dropped. Treasury yields richer by up to 3.5bp across long-end of the curve with 2s10s, 5s30s spreads flatter by 2bp and 1bp on the day.  With no coupon supply scheduled for this week and Fed officials
in self-imposed quiet period, economic data culminating with Friday’s May jobs report are focal points. Meanwhile, European Central Bank is viewed as almost certain to lower interest rates by 25 basis points at its next meeting on Thursday.

METALS: 

Gold prices traded flat to start the week as investors braced for a series of US economic reports that could provide insights into the health of the economy. This
comes on the heels of recent inflation data suggesting that the Federal Reserve may have room for rate cuts later in 2024. Several important reports are set to be released this week, including the Institute of Supply Management’s (ISM) nationwide PMI reading,
the ADP employment report, and the non-farm payrolls data. Spot gold-0.03 %, silver -0.2%.

ENERGY:   

Oil prices fluctuated after OPEC+ agreed on Sunday to extend most of its output cuts well into 2025 as the group seeks to shore up the market amid tepid demand growth
and rising US production. Some cuts will start to be unwound from October 2024 onwards. Continued worries over slow demand growth in top oil importer China have weighed on prices alongside rising oil stocks in developed economies. OPEC+ members are currently
cutting output by about 5.7% of global demand. “We are waiting for interest rates to come down and a better trajectory when it comes to economic growth … not pockets of growth here and there,” Saudi’s energy minister said. The OPEC+ deal is bearish for oil,
Goldman said. WTI -0.05%, Brent ~flat, US Nat Gas +3.3%, RBOB -0.05%.

CURRENCIES:   

In currency markets, the dollar see-sawed as traders waited for US ISM data for clues on the Federal Reserve’s interest-rate path. The Mexico peso slid as preliminary
election results showed the ruling party winning in a landslide, fanning concern about an increase in state control. The yen, this year’s worst performing G10 currency, moved higher after data showed Japan’s May manufacturing purchasing managers’ index rose
to 50.4 from 49.6 in April, the highest reading in a year. US$ Index -0.05%, GBPUSD -0.1%, EURUSD -0.05%, USDJPY -0.25%, AUDUSD +0.05%, USDCHF -0.1%, NZDUSD +0.2%.

Spot Bitcoin +2%, Ethereum +0.7%.

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
• Asana (ASAN) Raised to Hold at HSBC; PT $14
• Best Buy (BBY) Raised to Buy at Citi; PT $100
• CIBC (CM CN) Raised to Outperform at KBW; PT C$72
• Kimberly-Clark (KMB) Raised to Outperform at RBC; PT $165
• Krispy Kreme (DNUT) Raised to Overweight at JPMorgan; PT $14
• Magnite Inc (MGNI) Raised to Buy at Cannonball Research; PT $17
• Masimo (MASI) Raised to Overweight at Piper Sandler; PT $160
• MGIC (MTG) Raised to Outperform at KBW; PT $25
• New Gold (NGD CN) Raised to Outperform at CIBC; PT C$4.09
• Radian (RDN) Raised to Outperform at KBW; PT $36
• Downgrades
• Bank of Montreal (BMO CN) Cut to Market Perform at KBW; PT C$124
• Canadian Western Bank (CWB CN) Cut to Sector Perform at RBC; PT C$28
• Caribou Biosciences (CRBU) Cut to Inline at Evercore ISI; PT $3
• Cava Group (CAVA) Cut to Neutral at JPMorgan; PT $77
• Dayforce (DAY) Cut to Hold at CFRA
• Dell Technologies (DELL) Cut to Hold at Citic Securities; PT $151
• Enerflex (EFX CN) Cut to Sector Perform at National Bank; PT C$9
• Expro Group Holdings NV (XPRO) Cut to Neutral at Goldman; PT $23
• Gitlab (GTLB) Cut to Hold at CFRA
• Hello Group (MOMO) ADRs Cut to Neutral at JPMorgan; PT $6
• Marathon Oil (MRO) Cut to Neutral at Citi; PT $29
• UiPath (PATH) Cut to Neutral at Macquarie; PT $12
• Initiations
• 10X Genomics (TXG) Rated New Hold at Jefferies; PT $24
• Altus Power (AMPS) Rated New Buy at Seaport Global Securities; PT $6.50
• AMD (AMD) Rated New Buy at BOCOM Intl; PT $200
• Apple Hospitality (APLE) Rated New Neutral at Wedbush; PT $15
• Bowman Consulting Group (BWMN) Rated New Outperform at Baird; PT $37
• Broadcom (AVGO) Rated New Buy at Melius; PT $1,850
• BWX Technologies (BWXT) Rated New Buy at CLSA; PT $116.95
• Chord Energy (CHRD) Resumed Outperform at BMO
• Enel Chile (ENELCHIL CI) ADRs Rated New Outperform at Itau BBA; PT $4
• Guardant Health (GH) Rated New Buy at Jefferies; PT $32
• Illumina (ILMN) Rated New Hold at Jefferies; PT $115
• International Money (IMXI) Reinstated Buy at BTIG; PT $25
• Loar Holdings (LOAR) Rated New Buy at Jefferies
• Natera (NTRA) Rated New Buy at Jefferies; PT $142
• Novartis (NOVN SW) ADRs Rated New Buy at China Merchants; PT $120
• Old National (ONB) Resumed Outperform at Hovde Group; PT $20
• Pacific Bio (PACB) Rated New Buy at Jefferies; PT $4
• Proficient Auto Logistics (PAL) Rated New Outperform at Raymond James
• Rated New Outperform at William Blair
• Rated New Buy at Stifel; PT $19
• Silvaco Group (SVCO) Rated New Buy at Rosenblatt Securities Inc; PT $26
• Rated New Buy at TD Cowen; PT $23
• Rated New Buy at Jefferies; PT $25
• Sportsman’s Warehouse (SPWH) Rated New Buy at Roth MKM; PT $5
• Target (TGT) Rated New Underperform at BNPP Exane; PT $116

Data sources: Bloomberg, Reuters, CQG