Daily Game Plan

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

TODAY’S ECONOMIC DATA:  10:00ET US April Factory Orders, JOLTS Job Openings, Revised April Durable Goods Orders

HIGHLIGHTS and News:  

• Biden will sign an executive order today allowing him to halt some asylum claims at the Mexico border
• BIDEN WON’T RULE OUT USING US FORCES TO DEFEND TAIWAN: TIME
  
• Crude oil lower for a fifth straight day, WTI and Brent below key 200-week mvg avg
• 10-Year Yield testing its 200-day mvg avg support

Global stocks eased as investors weighed the prospect that the US economy may be starting to falter as manufacturing activity further weakened.  India’s stock market
plummeted, erasing nearly $35 billion in market value, as tallies signaled that Modi’s ruling party was struggling to win a majority of seats in national elections, a stunning result after exit polls showed he was on pace for a landslide victory. Elsewhere,
sources said the BOJ will probably discuss the reduction of bond purchases as early as its policy meeting next week. The ECB is widely forecast to cut interest rates on Thursday, the first time it will have moved ahead of the Federal Reserve.      

EQUITIES:

US equity futures fell after weak manufacturing data raised new worries about the strength of the US economy, even as markets awaited a slew of reports this week to gauge how much growth
has slowed. Job Openings and Labor Turnover Survey is expected later this morning, ahead of Wednesday’s ADP employment report and the closely watched nonfarm payroll figures on Friday. Intel is higher after the company launched its next generation Xeon server
processors and priced its Gaudi 3 artificial intelligence accelerator chips below its rivals’ products. Intel’s CEO pushed back against Nvidia’s claims that traditional processors are running out of steam in the age of AI, saying the industry will reach $1
trillion by the end of the decade.    

Futures ahead of the bell: E-Mini S&P -0.35%, Nasdaq -0.3%, Russell 2000 -0.7%, DJI -0.3%.  

In pre-market trading, Software coding platform GitLab (GTLB) fell 4% after forecasting weaker-than-expected second-quarter revenue late on Monday. Annexon (ANNX) jumps 25% after saying
its phase 3 trial of blocking antibody Anx005 in Guillain-Barre Syndrome met its primary endpoint. FibroGen (FGEN) rises 12% after the pharmaceutical company entered a clinical trial supply agreement with Regeneron. Core Scientific (CORZ) surges 40% after
the Bitcoin miner signed 12-year contracts with AI startup CoreWeave. HealthEquity (HQY) gains 5% after the company raised its full-year forecast and reported forecast-beating first-quarter results. Viking Therapeutics (VKTX) rises 7% after saying its experimental
liver disease drug VK2809 met its Phase 2b secondary endpoint. Hindenburg Research is short Axos Financial (AX -19%), the firm says in a statement. 

Shares in Europe are taking a breather with the Stoxx 600 lower for the first time in four days. Banks, energy and miners lead losses while utilities, healthcare and food & beverage sectors
outperform. Strong economic data and vocal European Central Bank hawks are pushing some analysts to waver in their expectations for rate cuts this year. While most economists still see an initial move this week, some deem sticky inflation, rapid wage growth
and surprisingly robust euro-zone output will constrain loosening. The region’s equities are still in line for a boost from rate cuts and an improving corporate earnings outlook, according to Citigroup strategists. Among individual movers, Deutsche Telekom
AG fell as Germany sold a $2.7 billion stake in the company. BP Plc, Shell Plc and TotalEnergies SE all slumped by more than 2.5% as oil extended losses from the lowest settlement in almost four months. Stoxx 600 -0.4%, DAX -0.8%, CAC -0.5%, FTSE 100 -0.3%.
Basic Resources -2.3%, Energy -2.2%, Banks -2%. Utilities +0.8%, Healthcare, Food & Bev +0.6%,

Asian equities were mostly lower, led by losses in India with notable declines in the Philippines and Taiwan, while benchmarks gained in Indonesia and mainland China. The MSCI Asia Pacific
Index fell 0.7%, with India’s Reliance among the biggest drags.  Shares in India plunged after touching all-time highs on Monday as the reduced prospect of Modi’s alliance winning an overwhelming majority rattled investors. A stronger majority for the party
is seen helping the prime minister push through market reforms. Sensex -5.75%, Philippines -1.3%, Taiwan -0.8%, Kospi -0.75%, Topix -0.4%, ASX 200 -0.3%. Hang Seng Index +0.2%, Vietnam +0.3%, CSI 300 +0.75%, Indonesia +0.9%.

FIXED INCOME: 
 

Treasuries cling to gains from Monday’s rally prompted by signs the US economy is cooling. Yields are less than 1bp richer on the day with 10-year around 4.39%. Curve
spreads are flat. Fed swaps continue to shift back toward pricing in rate cuts this year, with Fed-dated OIS fully pricing in a 25bp rate cut in November.

METALS: 

Gold fell after rising 1% in the previous session as investors awaited US jobs data due at the end of the week for clues on the Federal Reserve’s interest rate trajectory.
A survey by a think tank found that global central banks planned to continue to increase their exposure to gold, a trend that has already helped the precious metal hit record highs this year. Spot gold -1%, silver -3.4%.

ENERGY:   

Oil prices extended losses for a fifth straight day, weighed by OPEC+’s plan to return barrels to the market earlier than expected raised concerns about oversupply.
Signs of weakening demand growth have also weighed on oil prices, with data on US fuel consumption in focus. The average gasoline price in the United States declined 5.8 cents per gallon to $3.50 per gallon on Monday, according to GasBuddy data. The US government
will release inventory and product supplied data on Wednesday, which will show how much gasoline was consumed around the Memorial Day weekend, the start to the driving season. WTI -1.9%, Brent -1.6%, US Nat Gas +2.3%, RBOB -0.7%.

CURRENCIES:   

In currency markets, the dollar reversed early overnight losses after hitting its lowest level in over two months as signs of a softening US economy boosted the case
for earlier Federal Reserve interest rate cuts. Japan’s yen bucked the trend and continued to rise as the BOJ’s Himino said the central bank must be “very vigilant” to the impact the yen’s fluctuations could have on the economy and inflation in guiding monetary
policy. The yen is headed for a second day of gains for the first time since Japanese authorities intervened in the spot market, while the Swiss franc extended its recent advance following inflation data. Swiss inflation held at 1.4%, its fastest pace this
year, lessening the case for an SNB rate cut this month. The Norwegian krone leads G-10 losses as Brent falls for a fifth day, its longest streak of declines this year.  US$ Index +0.15%, GBPUSD -0.3%, EURUSD -0.35%, USDJPY -0.8%, AUDUSD -0.65%, USDCHF -0.35%,
NZDUSD -0.4%, USDNOK +1.2%.

Spot Bitcoin -0.2%, Ethereum -0.3%.

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
• DT Midstream (DTM) Raised to Overweight at Wells Fargo
• Heico (HEI) Raised to Equal-Weight at Morgan Stanley; PT $225
• Kinder Morgan (KMI) Raised to Overweight at Wells Fargo
• Perficient (PRFT) Raised to Outperform at Barrington Research; PT $77
• SentinelOne (S) Raised to Buy at Canaccord; PT $23
• Sunoco (SUN) Raised to Buy at Mizuho Securities; PT $59
• Upstart (UPST) Raised to Neutral at Redburn; PT $25.50
• Vizio Holding (VZIO) Raised to Outperform at Barrington Research
• Williams Cos (WMB) Raised to Overweight at Wells Fargo
• Downgrades
• Allegion (ALLE) Cut to Underweight at Barclays; PT $116
• Maxeon Solar (MAXN) Cut to Sell at Goldman; PT $1
• Procore Technologies (PCOR) Cut to Neutral at Mizuho Securities; PT $70
• PTC Inc. (PTC) Cut to Neutral at Mizuho Securities; PT $190
• Stanley Black & Decker (SWK) Cut to Equal-Weight at Barclays; PT $86
• Stericycle (SRCL) Cut to Hold at Stifel; PT $62
• Cut to Sector Perform at RBC; PT $62
• Initiations
• Cartesian Therapeutics I (RNAC) Rated New Outperform at Oppenheimer
• Columbus McKinnon (CMCO) Reinstated Overweight at JPMorgan; PT $53
• EastGroup (EGP) Rated New Neutral at BNPP Exane; PT $167
• First Industrial Realty (FR) Rated New Outperform at BNPP Exane
• Geely Auto (175 HK) ZK US Rated New Buy at Goldman; PT $34
• ZK US Rated New Overweight at Morgan Stanley; PT $39
• IsoEnergy (ISO CN) Rated New Speculative Buy at Canaccord; PT C$5.50
• LXP Industrial Trust (LXP) Rated New Outperform at BNPP Exane; PT $11
• Oklo (OKLO) Rated New Neutral at Citi; PT $11
• Spotify (SPOT) Rated New Buy at Guotai Junan Sec; PT $378.52
• Stag Industrial (STAG) Rated New Neutral at BNPP Exane; PT $39
• Superior Group of Cos In (SGC) Rated New Buy at DA Davidson; PT $24
• Terreno Realty (TRNO) Rated New Outperform at BNPP Exane; PT $68
• TransMedics (TMDX) Rated New Overweight at Stephens; PT $151
• Twist Bioscience (TWST) Rated New Buy at Guggenheim; PT $53

Data sources: Bloomberg, Reuters, CQG