Daily Game Plan

by Contributor
on July 5, 2024

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

TODAY’S ECONOMIC DATA:  8:30ET US June Payrolls and Unemployment Rate

HIGHLIGHTS and News:  

  • Patrick Bertoletti won the Nathan’s hot dog eating contest, eating 58 hot dogs in 10 minutes.
  • Argentina reaches Copa America semifinals, beating Ecuador 4-2 on penalty kicks after 1-1 draw

Global shares reached all-time highs ahead of crucial US jobs data, with MSCI Inc.’s world index hitting a record as soft US economic readings revived hopes for Federal
Reserve rate cuts as early as September.  Treasury yields dipped and the dollar fell for the fourth day to a three-week low. Meanwhile, Bitcoin sank to its lowest since February amid a wider crypto selloff. Investors now await US payroll figures, expected
to show moderation in hiring, which could further influence the Fed’s rate decision.

   

EQUITIES:

 

US stock futures were steady as Wall Street prepared to reopen after the Fourth of July break, with investors awaiting the June employment report. Cryptocurrency-linked
companies fell in premarket trading as Bitcoin extended losses. Macy’s shares rose 4.5% on news of an increased buyout offer, while Tesla gained 1.7%, potentially turning positive for 2024. Its cars on Thursday were included on a local government procurement
list in China for the first time, meaning the company’s EVs can be used there as service cars by public organizations. Other notable movers included STMicroelectronics, Philips, Freeport, and Broadcom, all showing gains in premarket trading. On the downside,
some healthcare stocks are facing pressure, with Bristol Myers (BMY) down 1.1% after releasing preliminary Q2 results. In the aerospace sector, Archer Aviation (ACHR) is up 8.3%, boosted by purchases from Ark Funds.

 

Futures ahead of the bell: E-Mini S&P +0.04%, Nasdaq +0.1%, Russell 2000 -0.2%, DJI -0.05%.

European shares advanced on Friday following the Labour Party’s victory over the Conservatives in Britain’s national election. The FTSE 100 in London climbed while the British pound and
euro both strengthened against the dollar. Labour leader Keir Starmer now faces the challenge of revitalizing the UK’s economy after years of turbulence under Conservative rule. In Germany, the DAX jumped after the government reached agreements on the budget
and a stimulus package, alleviating concerns about political instability. The CAC 40 in Paris also rose, reflecting a positive sentiment across European markets following the election results and economic developments. Stoxx 600 +0.3%, DAX +0.8%, CAC +0.3%,
FTSE 100 +0.06%. 

Asian equities were little changed as gains in South Korea and Taiwan were offset by a selloff in Chinese shares. The MSCI Asia Pacific Index remained steady, poised for its best weekly
gain since mid-May, driven by a record high in regional tech stocks, particularly Samsung Electronics. Chinese shares in Hong Kong and mainland China were the worst performers, with the CSI 300 Index erasing its year-to-date gains amid weak economic data and
low expectations for support from the upcoming Third Plenum. Japan’s Topix index ended a five-day winning streak, and shares in Hong Kong and India also fell. Notable movers included HDFC Bank in India, falling 4.8%, and China Resources Gas, which reached
its highest level in over a year. Topix -0.5%, Nikkei flat, China’s CSI 300 -0.4%; Hang Seng -1.3%; Kospi +1.3%; ASX 200 -0.1%.

FIXED INCOME: 
 

Treasuries are experiencing gains across the curve, with a slight bull-steepening move, following broader advances in European bond markets after the UK election results. The US 10-year
yield is around 4.34%, down 2.6 basis points from Wednesday’s close, aligning with German bunds while UK gilts outperform slightly. Investors are now focusing on the upcoming US employment report, expected to show a gradual cooling in the labor market with
a median estimate of 190,000 new jobs added in June, compared to May’s 272,000 increase.

METALS: 

Gold edged higher and is headed for a back-to-back weekly gain on expectations that the Federal Reserve will trim interest rates before year-end, with traders looking ahead to US payrolls
data for further clues. Spot gold +0.3%, silver +0.4%.

 

 

ENERGY:   

 

Oil prices stabilized and traded near a two-month high, with Brent crude around $87 a barrel and headed for its fourth weekly advance. The rally has been supported
by positive sentiment in global equity markets, which reached record levels, and a significant drop in US crude inventories signaling tightening supplies. While the risk from Hurricane Beryl has eased, its early appearance highlighted concerns about a potentially
intense storm season that could impact fuel markets. Signs of softer demand in Asia have tempered some optimism, leading Saudi Aramco to reduce crude prices to the region for a second month. WTI -0.07%, Brent -0.2%, US Nat Gas -2.6%, RBOB -0.7%

 

CURRENCIES:   

In currency markets, the dollar fell for a fourth day to its lowest level in three weeks, pushing expectations towards a potential Federal Reserve rate cut. The euro
also strengthened, while the yen led G-10 gains against the dollar. The yen strengthened for a second day against the greenback to rebound further from the lowest level since 1986 reached on Wednesday.  Sterling headed for its longest winning streak in four
years following Labour’s landslide victory in the UK general election. US$ Index -0.1%, GBPUSD +0.2%, EURUSD +0.1%, USDJPY -0.2%, AUDUSD +0.1%, NZDUSD +0.05%, USDCHF -0.1%.

 

 

 

 

 

Spot Bitcoin -4.8%, Ethereum -6%.

 

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

Downgrades

Initiations

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

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