Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Empire Manufacturing; 12:00ET Fed’s Powell interviewed by David Rubenstein; 4:35ET
Fed’s Daly speaks

HIGHLIGHTS and News:  

• INTEREST-RATE CUTS SOON WARRANTED, FED’S GOOLSBEE SAYS: WSJ
• Alphabet is in talks to buy cybersecurity startup Wiz for as much as $23B
• The RNC is expected to draw more than 50,000 attendees
• Boeing started test flights of its 777-9 aircraft with FAA certification after years of setbacks

Global equities eased after weak economic data from China helped set a cautious tone, while investors assessed the impact of an assassination attempt on former US
President Donald Trump at a rally over the weekend. Disappointing economic data kicked off a busy week in China, where a once-in-five-year gathering of top officials runs from July 15-18. Global smartphone shipments rose 6.5% in the second quarter, driven
by Samsung Electronics and Apple, preliminary data from IDC showed, but a full recovery in demand is yet to come around as it remained challenged in some markets. Hamas denied it’s pulling out of cease-fire talks a day after an Israeli air strike may have
killed two top leaders among at least 90 dead.         

EQUITIES:

US equity futures rose as investors ratcheted up wagers that another Trump presidency would implement a more expansive fiscal policy. Donald Trump shifted his campaign focus to unity
after being wounded in an assassination attempt. US retail sales data on Tuesday will be closely watched for clues on how consumers are faring, after recent data showed slowing growth. Apple was named a top pick at Morgan Stanley, boosting its price target
to $273, with the broker seeing the launch of the tech giant’s artificial intelligence platform triggering a record rush among users to upgrade their smartphones, tablets and computers. Apple’s India sales jumped 33% to a record of almost $8 billion in the
year through March.  

Futures ahead of the bell: E-Mini S&P %, Nasdaq %, Russell 2000 %, DJI %

In pre-market trading, Apple (AAPL) rises 1.9% as annual sales in India hit a record of almost $8 billion, underscoring a rapidly growing market where the iPhone maker now assembles more
of its devices. Cleveland-Cliffs (CLF) slips 3% after agreeing to buy Canadian steelmaker Stelco Holdings. GEO Group (GEO), a private prison operator, and firearm-related companies including Smith & Wesson (SWBI) are rallying as a failed assassination attack
over the weekend boosted former Trump’s bid to return to the White House. GEO +8%, SWBI + 4%, UnitedHealth (UNH) +2%, Humana (HUM) +2%. Goldman Sachs Group (GS) rises 0.7% after its trading unit powered a surge in earnings in the second quarter. Trump Media
(DJT) surges 50% after the failed attack.

The S&P 500 has outperformed the equal-weighted S&P 500 by over 13 percentage points over the last 6 months, the 2nd largest outperformance ever recorded over a 6 month period.

European gauges dropped in light trading after weak economic data from China and as disappointing updates from Swatch Group AG and Burberry Group dragged down luxury shares. The Stoxx
Europe 600 index is lower in choppy trade with only the media sector in the green. Luxury stocks fell after Burberry suspended dividends and replaced its CEO, and Swatch, the world’s biggest watchmaker, reported a steep drop in sales and earnings amid weak
demand in China. Focus will now turn to the European Central Bank decision on Thursday. A rate cut has effectively been ruled out for this month as policymakers take time to assess the strength of lingering inflation pressures. Stoxx 600 -0.4%, DAX -0.5%,
CAC -0.7%, FTSE 100 -0.3%. Media +0.2%. Utilities -1.3%, Basic Resources -1.1%, Retail -0.8%. 

Asian markets were mixed as losses in Hong Kong offset gains in other markets after China’s economic growth disappointed.  The MSCI Asia Pacific Index fell 0.1%, with Chinese tech names
including Tencent and Alibaba among the biggest drags. Mainland shares edged higher with eyes on the Third Plenum underway. China’s economy grew 4.7% in the second quarter, much slower than the 5.1% expected, keeping alive expectations Beijing will need to
unleash even more stimulus. Top leaders will gather this week for a highly anticipated meeting known as the Third Plenum. China’s retail sales for June also came in lower than expected, growing 2% year on year, compared with expectations of 3.3%. China’s new
home prices in June fell at the fastest clip in nine years. Australia’s ASX 200 hit an all-time high, outperforming in the region. Japan’s markets were closed for a public holiday. ASX 200 +0.7%, Philippines +0.6%, Sensex +0.2%, Kospi +0.15%, CSI 300 +0.1%.
Taiwan -0.15%, Indonesia -0.65%, Hang Seng Index -1.5%.

FIXED INCOME: 
 

Treasuries trade off session lows, although yields remain cheaper by up to 7bp across long-end of the curve following rising odds of Donald Trump winning the US presidential
election. The 30-year yield rose above the two-year rate for the first time since January. US session focus includes comments from Fed Chair Powell, slated to speak during US afternoon.  Short-end yields are little changed, steepening 2s10s and 5s30s curves
by ~4bp on the day; 10-year at 4.235% is cheaper by 5bp vs Friday’s close.

METALS: 

Gold inched higher as investors focus on upcoming comments from Federal Reserve Chairman Jerome Powell.  Spot bullion traded near $2,410 an ounce, not far off the
record-high $2,450/oz reached in late May. The precious metal has so far shown little price reaction to the shooting at a rally in Pennsylvania over the weekend, despite some markets showing signs of a so-called Trump trade. Spot gold +0.3%, silver is flat.

ENERGY:   

Oil prices are lower following swings between gains and losses following an assassination attempt on Republican presidential contender Donald Trump, while more lackluster
economic data from China piled the pressure on Beijing to boost confidence at a major policy meeting this week. The strengthening of the US dollar after the assassination attempt on former President Donald Trump weighed on oil prices, though the effect was
limited amid a number of recent positive catalysts. These include declining US stockpiles, seasonally stronger demand and still-elevated geopolitical risks. WTI -0.25%, Brent -0.25%, US Nat Gas -3.8%, RBOB -0.7%

CURRENCIES:   

In currency markets, dollar strengthened against all G-10 currencies, with Scandinavian currencies experiencing the largest declines. The Dollar Index broke a three-day
losing streak, as traders reassessed Trump’s increased chances of winning the election. The pound weakened slightly before the UK inflation report, and the Australian and New Zealand dollars dipped following slower Chinese economic growth data. US$ Index +0.05%,
GBPUSD -0.15%, EURUSD -0.02%, USDJPY +0.2%, AUDUSD -0.1%, NZDUSD -0.5%, USDNOK +0.6%.

Spot Bitcoin +8.4%, Ethereum +4.3%. Bitcoin surged to a two-week high after the attempted assassination of Donald Trump raised the odds of the former president winning
the upcoming election. Trump has presented himself as a champion of cryptocurrency.

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
• Apple (AAPL) Raised to Buy at Loop Capital; PT $300
• Carrier Global (CARR) Raised to Outperform at Baird; PT $75
• Solid Biosciences (SLDB) Raised to Overweight at JPMorgan; PT $15
• TD SYNNEX (SNX) Raised to Outperform at RBC; PT $140
• Teck Resources (TECK/B CN) Raised to Outperform at BMO; PT C$85
• UDR (UDR) Raised to Outperform at BMO; PT $45
• Downgrades
• Advanced Energy (AEIS) Cut to Neutral at Citi; PT $113
• Altair Eng (ALTR) Cut to Neutral at JPMorgan; PT $95
• Armada Hoffler (AHH) Cut to Hold at Jefferies; PT $11
• Baxter (BAX) Cut to Underweight at Morgan Stanley; PT $30
• BNY Mellon (BK) Cut to Neutral at Citi; PT $65
• BP (BP/ LN) ADRs Cut to Equal-Weight at Morgan Stanley; PT $41.50
• Caesars Entertainment (CZR) Cut to Negative at Susquehanna; PT $33
• Cintas (CTAS) Cut to Sector Perform at RBC; PT $725
• Cohu (COHU) Cut to Neutral at Citi; PT $36
• Electronic Arts (EA) Cut to Neutral at Citi; PT $161
• Morphic (MORF) Cut to Hold at Jefferies; PT $57
• PennantPark Investment (PNNT) Cut to Sell at Compass Point; PT $6.50
• Rocket Lab USA (RKLB) Cut to Equal-Weight at Morgan Stanley; PT $6
• SBA Comms (SBAC) Cut to Equal-Weight at Wells Fargo; PT $220
• Staar Surgical (STAA) Cut to Underweight at Morgan Stanley; PT $37
• Travelers (TRV) Cut to Hold at TD Cowen; PT $230
• Veeco Instruments (VECO) Cut to Neutral at Citi; PT $50
• Initiations
• Aptiv (APTV) Rated New Hold at HSBC; PT $76
• Autoliv (ALV) Rated New Buy at HSBC; PT $134
• Baidu (BIDU) ADRs Rated New Neutral at President Capital Management
• Mobileye (MBLY) Rated New Buy at HSBC; PT $33
• MP Materials (MP) Rated New Market Perform at BMO; PT $16.50
• Rubrik (RBRK) Rated New Outperform at Baird; PT $42
• SentinelOne (S) Rated New Outperform at Baird; PT $25
• Tenable (TENB) Rated New Outperform at Baird; PT $55
• Zeta (ZETA) Rated New Buy at Truist Secs; PT $23

Data sources: Bloomberg, Reuters, CQG