Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:30ET Powell, Lagarde speak; 10:00ET JOLTS Job Openings

HIGHLIGHTS and News:  

• Euro area headline HICP inflation inching down to 2.5% y/y, as expected
• Netanyahu said Israel is almost done eliminating the military capabilities of Hamas
• JPMorgan Says Time to Take Profit on Bearish Treasuries Bets
  
• Lawsuit Against Keith Gill (Roaring Kitty) Voluntarily Dismissed

Global stocks eased ahead of Federal Reserve Chair Jerome Powell’s speech at an ECB forum in Portugal may provide more clues on the outlook for policy. The ECB’s
Lagarde is also scheduled to speak.  Euro-area consumer prices slowed in line with estimates, though the core measure unexpectedly remained unchanged. Inflation in UK stores fell to 0.2% in June, the slowest since 2021, BRC data showed.  The PBOC may offer
a liquidity boost through methods including an RRR cut in the near future to offset the impact of increased government bond sales, Securities Daily reported. Hurricane Beryl headed toward Jamaica with life-threatening winds and heavy rainfall. Prime Minister
Benjamin Netanyahu said that Israel is almost done eliminating the military capabilities of Hamas and there will be a continuation to strike its remnants.    

EQUITIES:

US equity futures slipped as megacap stocks pulled back after a strong session, ahead of jobs data that may give more clues on the outlook for US interest rates. Tesla shares are lower
by more than 1% in premarket trading, surrendering some of yesterday’s 6% gain. Nvidia, Meta Platforms and Apple also declined. The US is launching a $5 billion program to develop the computer-chip workforce, aiming to address a potential labor shortage. Historically,
stock seasonality still favors the bulls as the Nasdaq has closed green in 10 of the past 11 Julys. 

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.5%, Russell 2000 -0.15%, DJI -0.3%.

In pre-market trading, Paramount (PARA) shares advance 3.6% after the New York Times reported that Barry Diller’s digital-media conglomerate IAC is exploring a bid to take control of
the media giant. Incyte (INCY) drops 3% after BMO Capital Markets downgrades the shares to underperform from market perform. Sea ADRs (SE) decline 2.7% after the e-commerce group’s subsidiary PT Shopee International Indonesia accepted the report of alleged
antitrust violations from Indonesian regulatory agency KPPU. WideOpenWest (WOW) falls over 4% after the cable and internet provider was downgraded to underperform from market perform at Raymond James. CrowdStrike Holdings (CRWD) slipped 2% after Piper Sandler
downgraded the cybersecurity firm to neutral from overweight. CS Disco (LAW) falls 6% after JPMorgan cut its rating, saying the setup for the legal software company looks challenging. Lennar (LEN) slips 2% as Raymond James and Citi downgrade the homebuilder
to hold-equivalent ratings, due partly to concerns around a softening Florida housing market. Polestar Automotive Holding (PSNY) drops 5% as the company cuts costs further after losses deepened in the first quarter. R1 RCM (RCM) tumbles 9% as New Mountain
Capital and TCP-ASC failed to reach an agreement on a joint takeover of the health-care technology firm. Pure Storage (PSTG) fell over 4.5% as UBS cut the recommendation to sell from neutral, saying the cloud storage provider’s valuation is not justified given
the increased competition.

Tech sector relative to the S&P 500; held initial short term support

Discretionary stocks relative to Staples: above trend line

European gauges declined after policy makers signaled they need more evidence that price pressures are under control, even as the latest data showed euro-region inflation moderating slightly.
The Stoxx Europe 600 benchmark is in the red, as insurers and car makers lead losses with only the energy sector in the green. France’s CAC 40 erased most of Monday’s gains as the country prepares for a second election round. Among individual stocks, shares
in food services company Sodexo SA fell revenue for the third quarter missed estimates. HelloFresh SE shares surged after JPMorgan said data indicate stabilization in the key North America meal-kit business. Siemens Energy AG rose as much as 4.3% after the
Financial Times reported that the company plans to hire over 10,000 new employees in its grid business. Stoxx 600 -0.7%, DAX -1.1%, CAC -0.9%, FTSE 100 -0.4%. Insurance -2.2%, Autos -1.8%, Banks -1.7%, Basic Resources -1.2%. Energy +1.1%.

Shares in Asia were mixed, with a rally in Hong Kong and Japanese shares countered by selling in South Korea and Taiwan. The MSCI AC Asia Pacific Index edged higher, hitting its highest
since late May amid a rally in Hong Kong-listed property and electric vehicle makers. Chinese shares in Hong Kong advanced, boosted by a catch up rally in property shares after better-than-expected June home sales lifted investors’ enthusiasm for the sector.
Mainland China stocks closed lower after seesawing through the day. KB Financial Group rose 4.5% to a record high, leading gains in Korean bank stocks after media reports said the nation will soon announce tax incentives to encourage listed companies to enhance
shareholder returns. Vietnam +1.2%, Topix +1.1%, Singapore +0.9%, Hang Seng Index +0.3%, Shanghai Composite +0.1%. CSI 300 -0.2%, ASX 200 -0.4%, Philippines -0.6%, Taiwan -0.8%, Kospi -0.8%.

FIXED INCOME: 
 

Treasuries are marginally richer across the curve following an aggressive, two-day bear-steepening move. European bonds outperform, led by gilts after June inflation
in UK stores fell close to zero for the first time since October 2021. US session highlights include Fed Chair Powell’s appearance on a panel in Sintra and JOLTS job openings data. The Fed’s Goolsbee (non-voter) said he feels “we are on a path to 2%” inflation
and “if you just hold the rates where they are while inflation comes down, you are tightening — so you should do that by decision, not by default.” Three weeks after recommending investors sell five-year Treasuries, strategists at JPMorgan say it’s time to
take profits. US 10-year yield is around 4.45%, down ~1bp vs Monday’s close. Curve is a bit flatter.

METALS: 

Gold prices have performed remarkably well so far this year, with demand for the precious metal high amid global economic uncertainty and central bank buying but
will likely need new catalysts to break out of their current range, according to a new report from the World Gold Council. Copper is higher for a third day as investors assess possible stimulus in China and rate cuts in the US. Spot gold -0.5%, silver -0.6%,
copper +0.6%.

ENERGY:   

Oil prices traded near a two-month high on escalating Middle East tensions and concerns over the Atlantic hurricane season as Beryl is named a category 5 hurricane,
the strongest storm to ever form in the Atlantic at this time of the year. The American Automobile Association projects a significant 5.2% increase in travel during the Independence Day holiday compared to 2023, with car travel up 4.8%. This forecast strongly
supports expectations of higher gasoline demand as the peak summer driving season kicks into high gear.  WTI +0.9%, Brent +0.8%, US Nat Gas -1.9%, RBOB +1.2%.

CURRENCIES:   

In currency markets, the yen weakened to a fresh 38-year low as Vanguard warned it may slide to 170 per dollar if potential BOJ policy changes this month fail to
boost Japanese bond yields. Finance Minister Suzuki said he continues to watch the currency market closely. The euro held earlier losses after euro-zone inflation data was released while the dollar kept near year-to-date highs. ECB Governing Council member
Mario Centeno said that policymakers will probably cut borrowing costs a few more times this year to support the economy US$ Index +0.05%, GBPUSD +0.05%, EURUSD -0.1%, USDJPY +0.1%, AUDUSD -0.1%, NZDUSD -0.25%, USDCHF +0.1%, USDNOK +0.35%.

Spot Bitcoin -0.8%, Ethereum -0.5%.

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
• Atlassian (TEAM) Raised to Overweight at Piper Sandler; PT $225
• Bank of America (BAC) Raised to Buy at Seaport Global Securities
• Comerica (CMA) Raised to Outperform at Raymond James; PT $60
• First Citizens (FCNCA) Raised to Outperform at Raymond James; PT $1,900
• PayPal (PYPL) Raised to Positive at Susquehanna; PT $71
• Principal Financial (PFG) Raised to Neutral at JPMorgan; PT $96
• Downgrades
• Aecon Group (ARE CN) Cut to Market Perform at BMO; PT C$17.50
• CrowdStrike (CRWD) Cut to Neutral at Piper Sandler; PT $400
• CS Disco (LAW) Cut to Underweight at JPMorgan; PT $5
• D.R. Horton (DHI) Cut to Neutral at Citi; PT $156
• Fiverr (FVRR) Cut to Neutral at UBS; PT $25
• Goldman Sachs (GS) Cut to Neutral at Seaport Global Securities
• Incyte (INCY) Cut to Underperform at BMO; PT $48
• Lennar (LEN) Cut to Market Perform at Raymond James
• Cut to Neutral at Citi
• Medical Properties (MPW) Cut to Neutral at BNPP Exane; PT $4
• Pure Storage (PSTG) Cut to Sell at UBS
• Shoals Technologies (SHLS) Cut to Sell at Citi; PT $5
• WideOpenWest (WOW) Cut to Underperform at Raymond James
• Initiations
• Adobe (ADBE) Rated New Buy at CMB International; PT $645
• CGI Inc (GIB/A CN) Rated New Buy at Jefferies; PT C$165.01
• Gauzy (GAUZ) Rated New Buy at B Riley; PT $21
• GE Vernova (GEV) Rated New Neutral at Redburn; PT $178
• Life360 (360 AU) Rated New Buy at Stifel; PT $37
• MiMedx (MDXG) Rated New Overweight at Cantor; PT $11
• Novo (NOVOB DC) ADRs Rated New Underperform at Jefferies; PT $82.50
• Rapport Therapeutics (RAPP) Rated New Buy at TD Cowen
• Rated New Buy at Stifel; PT $35
• Rated New Buy at Jefferies; PT $35
• Schrodinger (SDGR) Rated New Outperform at Leerink; PT $29
• Terawulf (WULF) Rated New Buy at Roth MKM; PT $6.50
• Waystar Holding (WAY) Rated New Outperform at RBC; PT $27
• Rated New Overweight at Barclays; PT $24
• Rated New Outperform at William Blair
• Rated New Outperform at Evercore ISI; PT $25
• Rated New Buy at Canaccord; PT $30
• Rated New Buy at Goldman; PT $32
• Rated New Overweight at JPMorgan; PT $24

Data sources: Bloomberg, Reuters, CQG