Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Philadelphia Fed Non-Manufacturing Activity;  10:00ET Existing Home Sales, Richmond
Fed; 1:00ET 2-Year Note Auction

HIGHLIGHTS and News:  

• Kamala Harris achieves sufficient party nominees to clinch the Democratic nomination
• China surprises with RRR cut to further bolster flagging economy
• Kamala Harris has raised more than $100 million since Sunday
  
• President Biden cancels nine upcoming trips
• Wiz rejected Alphabet’s takeover bid of as much as $23; will stick to its IPO plans
  
• TAIWAN SUSPENDS STOCK TRADING WEDNESDAY DUE TO TYPHOON GAEMI

Global markets steadied on Tuesday as investors looked beyond Joe Biden’s exit from the US presidential race, turning their focus to corporate earnings and economic
data. Israeli Prime Minister Benjamin Netanyahu told families of hostages held in Gaza that a deal that would secure their release could be near, his office said today.

EQUITIES:  

US equity futures are trading mixed after the S&P 500 saw its biggest gain in six weeks, as investors’ attention swings from US politics to tech-sector earnings. Focus will be firmly
on earnings today, with Tesla and Alphabet due to report after the close, beginning the season for the “Magnificent Seven” megacap group of stocks. Companies representing 29% of the S&P 500’s market value are due to report this week and investors are waiting
to see if the rally in tech stocks this year has room to continue. Analysts are keen for details of Tesla’s Robotaxi service, while at Alphabet, AI offerings and Google Cloud revenue are in focus.  

Futures ahead of the bell: E-Mini S&P +0.05%, Nasdaq -0.05%, Russell 2000 -0.25%, DJI +0.05%

In pre-market trading, General Electric (GE) gains 2% after reporting a jump in second-quarter profit and raised its guidance for the year as the newly independent jet-engine manufacturer
capitalized on strong demand for maintenance services during the busy summer travel season. Danaher (DHR) climbs 7% after the life-sciences firm reported 2Q profit and sales that topped estimates. General Motors (GM) rises 4% as profit surged 60% from a year
ago, easily beating expectations on strong demand for gas-powered trucks in the US. Inter Parfums (IPAR) rises 11% after the fragrance company reported net sales for the 2Q that beat. NXP Semiconductors (NXPI) drops 8% after the semiconductor device company
gave a 3Q revenue forecast that was weaker than expected. Philip Morris International (PM) rises 2% after raising its forecast for annual profit growth on higher demand for its Zyn nicotine pouches. Polaris (PII) slumps 14% after the maker of snowmobiles,
off-road vehicles and boats lowered its full-year forecasts for sales and profit. Spotify Technology (SPOT) gains 13% after audio-streaming giant reported 2Q subscriber growth that exceeded analysts’ projections after rolling out price increases. UPS (UPS)
falls 9% after reporting profit short of Wall Street’s estimates.

European gauges extended their rebound as investors prepared for a deluge of earnings this week and kept an eye on the latest US election developments. The Stoxx Europe 600 index is near
the highs of the day, with miners and real estate sectors lagging while technology stocks outperform. SAP SE rose 6.9% after the German software company reported a surge in cloud revenue growth spurred by demand for artificial intelligence. Logitech International
SA gained as much as 4.9% after the Swiss maker of computer accessories delivered results ahead of expectations. Shares in Porsche AG fell 4% after the carmaker lowered its full-year revenue forecast. Stoxx 600 +0.6%, DAX +1.2%, CAC +0.4%, FTSE 100 +0.2%.
Technology +1.8%, Travel & Leisure +1.3%. REITs -2.3%, Basic Resources –1.2%.

Asian markets remained supported, with Taiwan’s Taiex snapping five sessions of losses, rising 2.75% for its biggest gain in over five months. Chipmakers led gains in the region following
a rebound on Wall Street ahead of key tech earnings. The MSCI Asia Pacific Index rose 0.5%, snapping three days of losses, with TSMC and Samsung among the biggest boosts. Stocks also rose in South Korea and Australia, while Japanese shares were mixed. China
surprises with RRR cut to further bolster flagging economy after last week’s support measures disappoint.  China related indices slip against a backdrop of broad strength in Asia. Shares in India were soft after the government raised taxes on capital gains
from equity investments and hiked the levy on stock derivatives trades. Taiwan +2.75%, Singapore +0.7%, Philippines +0.6%, ASX 200 +0.5%, Kospi +0.4%, Topix +0.2%. Nikkei 225 ~flat, Sensex -0.1%, Hang Seng Index -0.9%, Vietnam -1.8%, CSI 300 -2.1%.

FIXED INCOME: 
 

Treasury yields are slightly lower while the curve is flatter as front end lags ahead of $69b 2-year note auction. WI 2-year yield at 4.465% is lower than 2Y auction
stops since January following rally from April’s YTD yield highs fueled mainly by improving inflation trend. Treasury auction cycle also includes 5- and 7-year notes over next two days, the last coupon auctions of the May-July financing quarter. 10-year yield
~4.23%. 2s10s curve -1.5bps.

METALS: 

Gold is moving higher after three days of declines, as investors await key US economic data due later this week.  The market is focused on upcoming US Q2 GDP data
and the core personal consumption expenditures price index. India’s decision to cut its gold import tax from 15% to 6% could boost demand in the world’s second-largest gold consumer.  Copper futures have fallen to their lowest since early April, while prices
for other base metals have also declined in part due to concerns about demand from China. Spot gold +0.5%, silver -0.2%, copper -0.7%.

ENERGY:   

Oil prices slipped for a fourth consecutive session as investors focused on the prospect of increasing oil supplies and weak demand, largely ignoring US presidential
campaign developments. Analysts from Morgan Stanley expect the oil market to balance by the fourth quarter and shift to a surplus next year, potentially dragging Brent prices to the mid-to-high $70s. Meanwhile, U.S. crude and gasoline inventory data are anticipated,
with a preliminary poll estimating a 2.5 million barrel drop in crude stocks. WTI -0.3%, Brent -0.25%, US Nat Gas -0.8%, RBOB -0.2%.

CURRENCIES:   

The main mover in currency markets was the yen, which strengthened against the dollar as traders look set to trim their carry positions during the summer holiday
season. Comments form a senior Japanese politician on Monday added to the pressure on the Bank of Japan, which meets on July 31, to keep hiking rates to help boost its currency. Australia and New Zealand’s currencies, often seen as liquid proxies for Chinese
yuan, dropped following China’s surprise interest rate cuts. US$ Index +0.1%, GBPUSD -0.2%, EURUSD -0.25%, USDJPY -0.6%, AUDUSD -0.2%, NZDUSD -0.2%, USDCHF +0.15%, USDNOK +0.4%, EURJPY -0.8%.

Spot Bitcoin -2.1%, Spot Ethereum +0.5%.

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
• Coinbase (COIN) Raised to Buy at Citi; PT $345
• EQT Corp (EQT) Raised to Overweight at JPMorgan; PT $42
• Equinix (EQIX) Raised to Overweight at Wells Fargo; PT $875
• eXp World Holdings (EXPI) Raised to Neutral at BTIG; PT $10
• Krispy Kreme (DNUT) Raised to Buy at HSBC; PT $14
• Skechers USA (SKX) Raised to Overweight at Morgan Stanley; PT $80
• Snap (SNAP) Raised to Equal-Weight at Morgan Stanley; PT $16
• Vertical Aerospace (EVTL) Raised to Buy at Deutsche Bank; PT $1.50
• Downgrades
• American Air (AAL) Cut to Market Perform at Bernstein; PT $12
• AZEK (AZEK) Cut to Market Perform at BMO; PT $50
• Canada Goose (GOOS CN) Cut to Market Perform at Raymond James
• CrowdStrike (CRWD) Cut to Hold at HSBC; PT $302
• Darden (DRI) Cut to Hold at TD Cowen; PT $150
• Gatos Silver (GATO) Cut to Hold at Canaccord; PT $17
• Hamilton Thorne (HTL CN) Cut to Hold at Canaccord; PT C$2
• Inmode (INMD) Cut to Hold at Jefferies; PT $19
• iQIYI (IQ) ADRs Cut to Reduce at HSBC; PT $3
• Johnson & Johnson (JNJ) Cut to Neutral at Daiwa; PT $150
• MEI Pharma (MEIP) Cut to Hold at Laidlaw; PT $20
• Sleep Country Canada (ZZZ CN) Cut to Sell at TD Cowen; PT C$35
• Cut to Market Perform at BMO; PT C$35
• Under Armour (UAA) Cut to Underweight at Morgan Stanley; PT $4
• Initiations
• Albemarle (ALB) Rated New Buy at Mirae Asset Securities; PT $126
• Alumis (ALMS) Rated New Overweight at Cantor
• Rated New Buy at Guggenheim; PT $32
• Rated New Outperform at Leerink; PT $29
• Rated New Overweight at Morgan Stanley; PT $36
• Amphenol (APH) Rated New Hold at Vertical Research; PT $65
• AZZ (AZZ) Rated New Neutral at Baird; PT $90
• Beam Therapeutics (BEAM) Rated New Buy at HC Wainwright; PT $80
• Belden (BDC) Rated New Buy at Vertical Research; PT $110
• Church & Dwight (CHD) Rated New Buy at TD Cowen; PT $116
• Clorox (CLX) Rated New Sell at TD Cowen; PT $122
• Cognex (CGNX) Rated New Buy at Vertical Research; PT $58
• Colgate-Palmolive (CL) Rated New Buy at TD Cowen; PT $110
• Compass Pathways (CMPS) ADRs Rated New Outperform at RBC; PT $23
• Constellation Energy (CEG) Rated New Outperform at Baptista Research
• Inhibrx Biosciences (INBX) Rated New Market Perform at JMP
• Keysight (KEYS) Rated New Buy at Vertical Research; PT $175
• Kimberly-Clark (KMB) Rated New Buy at TD Cowen; PT $161
• Landbridge (LB) Rated New Outperform at Raymond James; PT $34
• Rated New Equal-Weight at Barclays; PT $29
• Rated New Overweight at Wells Fargo; PT $34
• Rated New Neutral at Piper Sandler; PT $30
• Rated New Buy at Goldman; PT $35
• Rated New Neutral at Citi; PT $31
• Monday.com (MNDY) Rated New Neutral at Baird
• Montage Gold (MAU CN) Rated New Outperform at National Bank; PT C$2.50
• P&G (PG) Rated New Buy at TD Cowen; PT $189
• Sensata (ST) Reinstated Buy at Vertical Research; PT $55
• Sphere Entertainment (SPHR) Rated New Hold at Benchmark
• Symbotic (SYM) Rated New Hold at Vertical Research; PT $45
• TE Connectivity (TEL) Rated New Hold at Vertical Research; PT $155
• Teledyne (TDY) Rated New Buy at Vertical Research; PT $470
• Unilever (ULVR LN) ADRs Rated New Buy at TD Cowen; PT $67
• Vertex Inc (VERX) Rated New Outperform at Baird
• Zebra Tech (ZBRA) Rated New Buy at Vertical Research; PT $375
• Zscaler (ZS) Rated New Market Perform at Raymond James

Data sources: Bloomberg, Reuters, CQG