Daily Game Plan

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

DATA/HEADLINES   8:30ET  Weekly Jobless Claims, Current Acct Balance, Philly Fed; 10:00ET Existing Home Sales, Leading
Index; 1:00ET $15 Billion 10-Year TIPS Reopening

Friday – China’s Bund Summit, Japan CPI, PMIs, Bank of Japan rate decision, Eurozone S&P Global Eurozone PMIs, US S&P Global Manufacturing PMI. Fed’s Cook, Daly and Kashari speak tomorrow.

TODAY’S HIGHLIGHTS:  

• Hollywood studios and writers are also near agreement to end their walkout
  
• Biden and Zelenskiy meet in Washington today
  
• US offers work permits to half million Venezuelans already in country  

Global stocks dropped as the prospect of higher interest rates for longer hurts market sentiment worldwide. The BOE kept its rates unchanged for the first time in
nearly two years and said further tightening may be required if inflation persists. The Swiss National Bank delivered a surprise hold on rates. Sweden’s Riksbank increased its key rate as expected and said more hikes were possible, while Norway’s central bank
said more tightening may come in December after raising rates. Brazil’s central bank cut its benchmark Selic rate by 50 bps to 12.75%. The Philippines, Indonesia and Taiwan left rates unchanged, as expected. Turkey raised one-week repo rate by 500bps to 30%,
as expected.                                            

EQUITIES: 

US equity futures are lower for a third straight day after hawkish rhetoric from the Fed yesterday, indicating that borrowing costs will likely stay higher for longer after one more hike
this year. Updated quarterly projections showed 12 of 19 officials favored another rate hike in 2023. Policymakers also see less easing next year, according to the new forecasts. Focus will now shift back to economic data that could shift policymakers views
on more tightening. Kevin McCarthy won over a few GOP hardliners to support his Republican-only spending measures but it likely won’t fly with Senate Democrats as the chance of a government shutdown remains high just 10 days out.                                     

Futures ahead of the bell: E-Mini S&P -0.8%, Nasdaq -1.2%, Russell 2000 -0.8%, Dow -0.6%.

In pre-market trading, Broadcom (AVGO) fell ~5% following a report that Google executives “extensively” discussed dropping the semiconductor maker as an AI chips supplier as early as
2027. Marvell Technology (MRVL) shares jumped ~4% following reports that suggest the group could replace Broadcom as the key supplier of AI chips to tech giant Google within the next three years. ARM Holdings (ARM) slid over 2%, with the chip designer nearing
its IPO price, as rising bond yields put pressure on growth stocks. FedEx (FDX) climbed 5% after the courier raised the lower end of its outlook for EPS. CrowdStrike (CRWD) shares rise as much as 3.4%, as analysts hike their price targets on the stock following
the Fal.Con cybersecurity conference. Film and entertainment stocks rise, after Hollywood Studios and writers came a step closer to reaching a deal to end months of strikes. Warner Bros (WBD) +3% and Paramount (PARA) +3%. Cisco Systems fell over 4% after the
company said it will acquire Splunk (SPLK halted) for $157 a share, to help make organizations more secure and resilient in an AI-powered world.       

European indices are lower, tracking overnight losses in the US, as the hawkish tone from the Federal Reserve weighed. Stoxx 600 Index fell more than 1%, with all industry groups in the
red.  UK stocks trimmed declines after the Bank of England kept interest rates on hold, ending a series of 14 successive hikes. Homebuilders, real estate investors and banks jumped before paring the gains.  Next Plc outperformed in London after the UK retailer
raised its forecast. Stoxx 600 -1.1%, DAX -1.2%, CAC -1.5%, FTSE 100 -0.3%. Travel & Leisure -2.5%, Basic Resources -2.2%, Autos -1.7%. Food & Beverage -0.2%.      

Shares in Asia slumped the most in a month while Chinese gauges weakened on persistent pessimism about the nation’s economic recovery. Foreigners have continued to shed onshore shares
this month despite Beijing’s easing measures. The MSCI Asia Pacific Index dropped 1.5%, a fourth day of losses, led by health-care and communication services sectors. South Korea’s Kospi Index was one of the worst performers, falling ~1.8% as large-cap chip
and battery stocks weighed. Chinese AI-related companies as well as auto component makers gain after Huawei Technologies pledged to help domestic companies develop cutting-edge technology in AI.  Kospi -1.75%, ASX 200 -1.4%, Nikkei 225 -1.4%, Taiwan -1.3%,
Hang Seng Index -1.3%, Vietnam -1.1%, CSI 300 -0.9%, Sensex -0.8%. Philippines +0.9%.        

FIXED INCOME: 
 

After resuming post-Fed selloff in early Asia session, front-end of the Treasuries curve trades richer on the day into early US session, outperforming the belly and
long-end as steepening move extends. Long-end Treasury yields reach new cycle highs, joining the rest of the curve after Wednesday’s Fed decision. US yields are richer by 2bp across front-end of the curve while belly out to long-end trades cheaper by 1.5bp
to 4bp on the day; 10-year yields around 4.44%. Treasury auctions resume with $15b 10-year TIPS reopening.                     

METALS: 
           

Gold slipped as markets considered hawkish commentary from the Federal Reserve, after US policymakers signaled interest rates will remain higher for longer. Bullion
erased an earlier gain after the decision, before extending losses Thursday as the dollar strengthened. Spot gold -0.4%, silver -0.2%.

ENERGY:  

Crude oil extended its decline after posting the largest decline in a month in the previous session, as the Fed’s hawkish messaging offset the impact of drawdowns
in US crude stockpiles. Energy markets reacted little to data from the US Energy Information Administration on Wednesday showing crude inventories fell in line with expectations last week, with some analysts saying the decline was smaller than they expected.
However, price falls were limited by continuous concern on tight supply globally entering the fourth quarter, with crude stocks at Cushing at their lowest since July 2022.  Meanwhile, China imported a record amount of crude from Russia in August, surpassing
the high set in June. In other news, Chevron and unions are close to a deal that would end strikes at LNG plants in Australia as soon as Friday. WTI -0.5%, Brent -0.2%, US Nat Gas -1%, RBOB +0.2%.                               

CURRENCIES:   

The Swiss franc fell after the SNB paused its tightening, defying expectations of another hike, and lowered its 2025 inflation forecasts. The dollar gained against
most major currencies except the Japanese yen. The value of the yen has slumped to the lowest on record, as measured against a broad basket of its peers and adjusted for inflation, according to data from the Bank for International Settlements. This underscores
the pressure to address yen weakness at the Bank of Japan, which is where this week’s series of central bank policy meetings wraps up on Friday.  Sweden’s Riksbank increased its key rate by 25 bps to 4% and said it may act again while deciding to hedge a chunk
of its FX reserves. Sterling weakened ahead of the BOE policy decision. The Bank of England held its key rate at 5.25%, ending a series of 14 successive hikes since December 2021, when rates were just 0.1%. US$ Index +0.25%, GBPUSD -0.5%, EURUSD -0.15%, USDCHF
+0.7%, USDJPY -0.3%, AUDUSD -0.7%, USDCAD +0.3%.

Bitcoin -1.3%, Ethereum -1.9%. 

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
• (BUENAVC1 PE) Buenaventura ADRs Raised to Overweight at Morgan Stanley
• (ENPH) Enphase Energy Raised to Buy at Seaport Global Securities
• (EWCZ) European Wax Raised to Overweight at Piper Sandler; PT $22
• (FIVN) Five9 Raised to Buy at Deutsche Bank; PT $80
• (GRAB) Grab Holdings Raised to Buy at DBS Bank; PT $4.29
• (HQY) HealthEquity Raised to Outperform at Baird; PT $87
• (IP) International Paper Raised to Buy at Truist Secs; PT $43
• (NJR) New Jersey Resources Raised to Neutral at JPMorgan; PT $46
• (NTNX) Nutanix Raised to Buy at BofA
• (SOIL CN) Saturn Minerals Raised to Buy at Canaccord; PT C$5.75
• (TFC) Truist Financial Raised to Outperform at KBW; PT $36
• Downgrades
• (BCOLO CB) Bancolombia ADRs Cut to Neutral at Goldman; PT $31
• (BHF) Brighthouse Financial Cut to Sell at Goldman; PT $43
• (SEEL) Seelos Therapeutics Inc Cut to Neutral at Cantor
• (SPRY) ARS Pharmaceuticals Inc Cut to Market Perform at Leerink; PT $3
• (ULCC) Frontier Airlines Cut to Neutral at Citi; PT $5.50
• Initiations
• (ADC) Agree Realty Rated New Overweight at Wells Fargo; PT $70
• (ALVO) Alvotech Rated New Equal-Weight at Barclays; PT $10
• (BNL) Broadstone Net Lease Rated New Market Perform at JMP
• (CEI CN) Coelacanth Energy Rated New Buy at Eight Capital: PT C$1.25
• (CNE CN) Canacol Energy Rated New Buy at Jefferies; PT C$16
• (CRH ID) CRH ADRs Reinstated Buy at Redburn; PT $75
• (DRR/U CN) Dream Residential REIT Rated New Buy at Desjardins; PT $9.50
• (ECOPETL CB) Ecopetrol ADRs Rated New Underperform at Jefferies; PT $11.20
• (EPR) EPR Properties Rated New Underweight at Wells Fargo; PT $40
• (EPRT) Essential Properties Rated New Overweight at Wells Fargo; PT $27
• (FCPT) Four Corners Property Rated New Overweight at Wells Fargo
• (GLPI) Gaming and Leisure Rated New Equal-Weight at Wells Fargo; PT $50
• (GPRK) Geopark Rated New Buy at Jefferies; PT $14.50
• (IRDM) Iridium Communications Rated New Buy at WestPark Capital; PT $65
• (NNN) NNN REIT Inc Rated New Equal-Weight at Wells Fargo; PT $40
• (OGN) Organon Rated New Overweight at Barclays; PT $28
• (OSTK) Overstock Rated New Neutral at BTIG
• (PAMP AR) Pampa Energia ADRs Rated New Buy at Jefferies; PT $56
• (PETR4 BZ) Petrobras ADRs Rated New Buy at Jefferies; PT $19.20
• (PSA) Public Storage Resumed Equal-Weight at Morgan Stanley
• (PXT CN) Parex Resources Rated New Hold at Jefferies; PT C$28.60
• (SGD CN) Snowline Gold Rated New Speculative Buy at Canaccord; PT C$14.50
• (SRC) Spirit Realty Rated New Underweight at Wells Fargo; PT $36
• (STIX) Semantix Rated New Outperform at Bradesco BBI; PT $3
• (UGPA3 BZ) Ultrapar ADRs Rated New Underperform at Jefferies; PT $3.30
• (VICI) VICI Properties Rated New Overweight at Wells Fargo; PT $36
• (VISTAA MM) Vista Energy ADRs Rated New Buy at Jefferies; PT $40
• (WPC) WP Carey Rated New Equal-Weight at Wells Fargo; PT $66
• (YETI) YETI Holdings Rated New Neutral at B Riley; PT $50
• (YPFD AR) YPF ADRs Rated New Hold at Jefferies; PT $14.50

Data sources: Bloomberg, Reuters, CQG