Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:15ET Fed’s Barr speaks; 10:00ET Fed Chair Powell’s Congressional Testimony; 1:00ET 3-Year
Note Auction; 1:30ET Fed’s Bowman speaks

HIGHLIGHTS and News:  

• Citi Says It’s Time to Book Profits in High-Flying AI Stocks
• WH doctor said Biden only saw a neurologist for annual physicals and that he’s not being treated for Parkinson’s
• MORGAN STANLEY’S WILSON SAYS A 10% STOCK MARKET CORRECTION IS ‘HIGHLY LIKELY’
  

Global stocks are mixed as investors waited to see if Federal Reserve Chair Jerome Powell would sound supportive of rate cuts after evidence the US labor market is
cooling. The Fed chair’s testimony today pushed investor focus away from France, where political deadlock cooled concerns over the potential fiscal impact of far-left or far-right policies. With legislative elections now done in both the UK and France, attention
is turning to the corporate earnings season, which kicks off this week.       

EQUITIES:

US equity futures are higher after the S&P 500 Index set its 35th record high for the year, with technology stocks set to extend Monday’s gains. Investors will be looking for hints from
the Fed chair about how soon policymakers will be in a position to cut interest rates. A long-awaited pivot to easier policy would provide investors sitting on a record $6 trillion of money-market funds with an incentive to buy bonds and other assets. The
Federal Reserve is mulling updating rules on how it calculates an extra layer of capital it imposes on US global systemically important banks, Reuters reports. The Fed’s rule tweak could save US banks billions of dollars in capital.     

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.3%, Russell 2000 -0.05%, DJI +0.1%.

In pre-market trading, Intel (INTC) rises 3% and is set to extend gains to a fifth consecutive session. Helen of Troy (HELE) falls 28% after the consumer products company cut its adjusted
earnings per share guidance for the full year. Helios Technologies (HLIO) falls 11% as its CEO was placed on paid leave following allegations of a potential violation of the manufacturer’s code of conduct. Indivior (INDV) drops 36% after the drugmaker cut
its net revenue guidance for the full year. Nikola (NKLA) rises 5% as shares are set to extend gains to a fifth consecutive session. Tempus AI (TEM), a medical data firm that went public in June, gains 3% as Morgan Stanley, JPMorgan and Stifel initiate coverage
with bullish ratings. Assured Guaranty (AGO) rises 3% as Keefe, Bruyette & Woods upgrades the insurance company from market perform to outperform and raises the price target from $87 to $92.

European gauges are near their lows for the day as France’s CAC 40 lagged, with investors wary about increased government spending following the left’s resurgence in the weekend election.
The Stoxx Europe 600 Index is lower for a third day, with energy shares the biggest decliners, while REITs outperform. Novo Nordisk A/S contributed the most to the index decline, decreasing 1.5%. Among other individual stock movers, BP Plc fell more than 3%
after saying it will take a hit of as much as $2 billion from impairments in second-quarter results. Dassault Systemes SE fell ~5% after cutting its full-year earnings forecast. In London, Indivior (INDV LN) shares tumble 35% after lowering fiscal 2024 guidance.
The pharmaceutical company said it plans to discontinue sales and marketing for its antipsychotic injection Perseris. Stoxx 600 -0.4%, DAX -0.5%, CAC -0.9%, FTSE 100 -0.2%. Energy -1.1%, Banks -1%, Autos -0.9%. REITs +0.2%, Food & Bev +0.15%.

Shares in Asia rebounded as tech shares in Japan outperformed, tracking their US peers higher. The MSCI Asia Pacific Index rose 0.6%, boosted by Japanese names including Sony Group, Hitachi
and Tokyo Electron. The Nikkei 225 hit a new record high as the prospects of lower US interest rates helped prop up semiconductor-related stocks. Chinese equities were volatile moving closer to an upcoming key political meeting. Mainland Chinese and Hong Kong
shares gained, paring losses from the morning, as investors try to gauge Beijing’s policy direction at next week’s Third Plenum. Nikkei 225 +~2%, CSI 300 +1.1%, Hang Seng Tech +1%, ASX 200 +0.9%, Vietnam +0.8%, Singapore +0.6%, Sensex +0.5%, Kospi +0.3%, Taiwan
+0.1%, Hang Seng Index was flat.

FIXED INCOME: 
 

Treasury yields inched higher ahead of the Powell testimony to Congress. Fed-dated OIS contracts price in ~48bp of easing by year-end. The closely watched gap between
French and German borrowing costs, which rose to the highest since 2012 in late June at 85 bps on fears of a far-right victory, held steady at 66 bps. US session also includes a 3-year note sale, the first of this week’s cycle, which also includes 10- and
30-year auctions. US 10-year yield is cheaper by around 2bp on the day at 4.30%; 2s10s, 5s30s spreads are steeper by 1.5bp and 1bp on the day.

METALS: 

Gold steadied after dropping 1.4% on Monday, as investors await comments from the Fed Chair over the next two days and US inflation data later this week. Jerome Powell
will begin his semiannual testimony, where he’ll likely have to defend the central bank’s higher-for-longer policy stance. US CPI data will be published on Thursday. Spot gold +0.05%, silver +0.8%.

ENERGY:   

Oil prices slipped as major refineries along the US Gulf Coast appeared to see minimal impact from Hurricane Beryl, which weakened into a tropical storm after hitting
the Texas coast. That eased market worries about the risk of supply disruption in Texas, where 40% of US crude oil is produced. Almost two million homes and businesses were still without power in Houston, with authorities warning it may take days to fix. Adding
to problems, temperatures of as much as 105F are forecast for coming days. In Canada, heavy crude supplies are being threatened by wildfires with Suncor Energy forced to curtail production. WTI -0.35%, Brent -0.3%, US Nat Gas -0.8%, RBOB -0.03%.

CURRENCIES:   

In currency markets, the dollar inched higher as traders anticipate Federal Reserve Chair Jerome Powell’s semi-annual testimony to Congress starting today. The Bank
of Japan will speak face-to-face with market participants over the next couple of days to gauge a realistic pace for a reduction of its bond purchases to be announced later this month. Sterling eased slightly after separate reports that indicated British consumers
reined in retail spending in June during a cold spell. The Aussie$ eased slightly; Australia’s consumer pessimism deepened in July as households worried about the prospect for further interest-rate increases with inflation proving stickier than anticipated.
US$ Index +0.1%, GBPUSD -0.05%, EURUSD -0.1%, USDJPY +0.2%, AUDUSD -0.05%, NZDUSD -0.15%, USDCHF +0.1%.

Spot Bitcoin +2%, Ethereum +3%. Investors are piling into Bitcoin exchange-traded funds, betting the supply overhang that’s pushed the token lower in past weeks has
created a buying opportunity. US Bitcoin ETFs have seen a net inflow of $438 million over the past two trading sessions, according to Bloomberg data.

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
• Assured Guaranty (AGO) Raised to Outperform at KBW; PT $92
• Bank of America (BAC) Raised to Neutral at Piper Sandler; PT $42
• C.H. Robinson (CHRW) Raised to Buy at Vertical Research; PT $102
• Raised to Neutral at JPMorgan; PT $87
• Corning (GLW) Raised to Hold at HSBC; PT $37
• CRH (CRH) Raised to Overweight at Morgan Stanley; PT $88
• Lennar (LEN) Raised to Neutral at Wedbush; PT $144
• Principal Financial (PFG) Raised to Strong Buy at Raymond James
• Regency Centers (REG) Raised to Outperform at Mizuho Securities
• SL Green (SLG) Raised to Sector Perform at Scotiabank; PT $53
• Downgrades
• ArcBest (ARCB) Cut to Neutral at JPMorgan; PT $127
• GFL Environmental (GFL CN) Cut to Market Perform at BMO; PT C$57.24
• Heartland Express (HTLD) Cut to Underweight at JPMorgan; PT $10
• Helios Technologies (HLIO) Cut to Sector Weight at KeyBanc
• HilleVax (HLVX) Cut to Neutral at HC Wainwright
• Cut to Market Perform at Leerink
• Cut to Hold at Stifel; PT $3
• Marten Transport (MRTN) Cut to Hold at Vertical Research; PT $19
• Morphic (MORF) Cut to Hold at TD Cowen
• Cut to Sector Perform at RBC; PT $57
• Cut to Hold at Canaccord; PT $57
• Cut to Market Perform at BMO; PT $57
• NextEra Energy Partners (NEP) Cut to Market Perform at Raymond James
• Werner Enterprises (WERN) Cut to Underweight at JPMorgan; PT $32
• Initiations
• Amcor (AMCR) Rated New Hold at Stifel; PT $10.83
• America Movil (AMXB MM) ADRs Reinstated Outperform at Bradesco BBI; PT $21
• Angi Inc (ANGI) Rated New Market Outperform at JMP; PT $3.25
• Arhaus (ARHS) Rated New Buy at Stifel; PT $19.50
• Atour Lifestyle (ATAT) ADRs Rated New Buy at SPDB Intl HK; PT $22.80
• Avery Dennison (AVY) Rated New Buy at Stifel; PT $274.64
• Equifax (EFX) Rated New Outperform at Wolfe; PT $275
• Exscientia (EXAI) ADRs Rated New Buy at TD Cowen
• Fair Isaac (FICO) Rated New Outperform at Wolfe; PT $1,725
• First Bancorp PR (FBP) Rated New Outperform at Raymond James; PT $21
• First Citizens (FCNCA) Rated New Buy at Jefferies; PT $2,005
• Flagship Communities REIT (MHC/U CN) Reinstated Outperform at CIBC
• Graphic Packaging (GPK) Rated New Buy at Stifel; PT $35.21
• H World Group Ltd (HTHT) ADRs Rated New Buy at SPDB Intl HK; PT $40.50
• IAC Inc (IAC) Rated New Market Outperform at JMP; PT $78
• Impinj (PI) Rated New Buy at Freedom Capital; PT $187
• International Paper (IP) Rated New Hold at Stifel; PT $48.70
• Jumia (JMIA) ADRs Rated New Buy at Benchmark; PT $14
• Markel Group Inc (MKL) Rated New Buy at TD Cowen; PT $1,986
• Monday.com (MNDY) Rated New Outperform at Wolfe; PT $300
• Onto Innovation Inc (ONTO) Rated New Outperform at Haitong Intl
• Perfect Moment (PMNT) Rated New Buy at ThinkEquity; PT $6
• Recursion Pharma (RXRX) Rated New Hold at Jefferies; PT $8
• RH (RH) Rated New Buy at Stifel; PT $315
• Sealed Air (SEE) Rated New Buy at Stifel; PT $47
• Smurfit WestRock (SW) Rated New Buy at Stifel; PT $65.70
• Sound Point Meridian Capital (SPMC) Rated New Outperform at Oppenheimer
• Televisa (TLEVICPO MM) ADRs Reinstated Neutral at Bradesco BBI; PT $3
• Tempus AI (TEM) Rated New Buy at Needham; PT $47
• Rated New Outperform at William Blair
• Rated New Buy at TD Cowen; PT $50
• Rated New Buy at Loop Capital; PT $48
• Rated New Overweight at Morgan Stanley; PT $44
• Rated New Overweight at JPMorgan; PT $42
• Rated New Buy at Stifel; PT $45
• TransUnion (TRU) Rated New Peerperform at Wolfe
• Veeva (VEEV) Rated New Buy at BTIG; PT $240

Data sources: Bloomberg, Reuters, CQG