Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET ADP Employment Change; 8:30ET Trade Balance, Initial Jobless Claims; 9:45ET S&P Global
US Services PMI, Composite PMI; 10:00ET Factory Orders, ISM Services Index, Durable Goods Orders, Cap Goods Orders; 2:00ET FOMC Meeting Minutes

ADP US JUNE PRIVATE EMPLOYMENT RISES 150,000; EST. +165K

HIGHLIGHTS and News:  

• Job openings: 14 of the past 17 months have been revised lower
• VP Harris top choice to replace Biden in election race if he steps aside, citing senior campaign sources
• Terrorist attack in Israeli mall, attacker killed
  
• Zelensky challenges Trump to tell Ukraine his plan to end the war

Global stocks rose as comments from Fed Chair Jerome Powell reinforced expectations that US rate cuts were not far off. MSCI’s world share index hits a new record
high after Powell’s remarks on Tuesday that the US is back on a “disinflationary path”, although he cautioned that policymakers need more data before they can consider cutting interest rates.  Data from China showed the country’s services activity expanded
at the slowest pace in eight months and confidence hit a four-year low in June, dragged by slower growth in new orders. Europe suffered the biggest reduction in overweight positions among regions globally in June, reversing the buying trend seen in May, according
to Goldman Sachs. Focus now turns to a slew of US economic data today, then Britain’s national election on Thursday, and the second round of voting in France’s parliamentary elections Sunday.     

EQUITIES:
Early close today (1PM EST) for Independence Day tomorrow

US equity futures are steady ahead of a session that will include a heavy load of economic data and be shorter than usual because of the July 4 holiday. The S&P 500 closed above 5,500
for the first time on Tuesday, its 32nd record this year. The Nasdaq 100 also set an all-time high. For today, investors will look to US initial jobless claims and ADP employment data for more clues on the policy outlook. Fed minutes due later may shed light
on why FOMC members lowered expectations for rate cuts in 2024, even as they left growth and unemployment forecasts unchanged. Paramount rose premarket after Skydance agreed to buy Shari Redstone’s National Amusements and merge with Paramount.   

Futures ahead of the data: E-Mini S&P -0.1%, Nasdaq -0.1%, Russell 2000 +0.3%, DJI -0.01%.

In pre-market trading, Dell (DELL) advances 1.5% after BofA adds the personal computer maker to its US 1 list. Paramount Global (PARA) shares jump 12% after Bloomberg News reported that
Skydance Media had reached a preliminary agreement to buy National Amusements and merge with Paramount. First Foundation (FFWM US) shares slide 28% after the company confirmed plans to raise a total of $228m from affiliates of Fortress Investment Group and
others. Constellation Brands (STZ) gains ~3% after it recorded a big jump in profit for the fiscal first quarter as beer sales jumped and margins expanded, prompting a lift in its full-year earnings guidance. Nano Dimension (NNDM +7%) and Desktop Metal (DM
+4.5%) today jointly announced that they have entered into a definitive agreement under which Nano Dimension will acquire all outstanding shares of Desktop Metal in an all-cash transaction for $5.50 per share, subject to possible downward adjustments to $4.07
per share. The transaction is expected to close in the fourth quarter.

Equal weight S&P 500 (RSP) broke a short term trend line while equal weight QQQ is near all-time highs.

European gauges are higher across the board as the region catches up to the move on Wall Street. The CAC outperforms as the agreement between ENS & NFP regarding candidate withdrawals
has seemingly held into Sunday’s second round of elections.  Heavyweights such as LVMH and BNP Paribas SA are topping the leaderboard. The Stoxx 600 is near the highs on the day, led by bank and technology shares technology. Chip stocks were among the best
performers, with BE Semiconductor Industries NV soaring after analysts wrote that Apple could adopt the chip-equipment firm’s technology. Among other movers, Sanofi SA edged higher after its blockbuster Dupixent drug was cleared for European patients with
a chronic lung disorder.  Stoxx 600 +0.8%, DAX +1%, CAC +1.6%, FTSE 100 +0.6%. Banks +2.1%, Tech +1.9%, Travel & Leisure +1.8%, Basic Resources +1.7%. Energy -0.15%, Healthcare -0.4%.

Shares in Asia advanced, driven by gains in Hong Kong and Taiwan technology stocks, tracking a similar move in the US. The MSCI Asia Pacific Index climbed 0.7% in a fourth straight day
of gains, its longest stretch since May. Japanese equities rose, with the benchmarks now less than 1% from their record highs. Onshore Chinese shares were an outlier with the blue chip CSI 300 Index down 0.25% as investors await more support measures from
the government after a string of weak data prints. Goldman Sachs raised its price target on Japan’s electronic components makers, saying the sector will attract focus as AI-related stocks become a broader theme. Hang Seng Tech Index +2.5%, Philippines +1.4%,
Singapore +1.4%, Taiwan +1.3%, Nikkei 225 +1.25%, Hang Seng Index +1.2%, Sensex +0.7%, Kospi +0.5%. Shanghai Composite -0.5%.

FIXED INCOME: 
 

Treasuries are narrowly mixed with the curve flatter ahead of a packed economic data slate. German and UK curves are also flatter on the day following firm services
PMI readings. US versions are due out Wednesday, along with ADP employment, weekly jobless claims and ISM services gauge, among other indicators. Minutes of FOMC’s June 11-12 meeting are slated for release at 2pm EST, also the SIFMA-recommended cash market
close time ahead of the July 4 holiday. 10-year yield around 4.45%.

METALS: 

Gold is higher as traders awaited the release of US economic data that may provide fresh clues on the timing of Federal Reserve interest-rate cuts. Bullion has traded
in a narrow band this week ahead of data including factory orders Wednesday and nonfarm payrolls Friday. Spot gold +0.7%, silver +2.2%.

ENERGY:   

Oil prices are steady, trading at around a two-month high, as refineries gear up for the summer driving season and traders fret over renewed tensions in the Middle
East. The American Petroleum Institute reported crude inventories shrank 9.2 million barrels last week. If confirmed in official EIA figures later today, that would be the largest drop in barrel terms since January. Rystad cut its forecast for Permian Basin
oil output growth by 30% to 252,000 barrels a day on continued consolidation and a slowdown in drilling. Hurricane Beryl’s winds weakened slightly as it churns toward Jamaica, where it may cause more than $1 billion in damage. It’s set to move toward the Cayman
Islands tonight and tomorrow.  WTI +0.1%, Brent +0.15%, US Nat Gas +0.25%, RBOB -0.5%.

CURRENCIES:   

In currency markets, the dollar climbed to a new 38 year high versus the yen, with traders still on the lookout for signs of Japanese authorities intervening. Some
analysts suggest that the line in the sand might be further away than current levels. The euro reversed losses to head for its fifth daily advance as Marine Le Pen’s rivals maneuver to keep her far-right party out of power. Aussie dollar edges higher after
retail sales and building approvals data beat economist estimates, boosting case for the central bank to hike. China’s yuan eased to a seven-month low against the dollar.  US$ Index -0.1%, GBPUSD +0.1.5%, EURUSD +0.1%, USDJPY +0.3%, AUDUSD +0.05%, NZDUSD -0.1%,
USDCHF -0.05%, USDNOK -0.2%.

Spot Bitcoin -2.7%, Ethereum -3.3%.

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 

Data sources: Bloomberg, Reuters, CQG