Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET GDP, Personal Consumption, Core PCE Price Index, Initial Jobless Claims, Durable
Goods Orders, Cap Goods; 11:00ET Kansas City Fed Manf. Activity, ECB’s Lagarde speaks; 1:00ET 7-Year Note Auction, Biden meets Netanyahu

US 2Q CORE PCE RISES AT 2.9% ANNUAL RATE; EST. 2.7%. US 2Q GDP GROWS AT 2.8% ANNUAL RATE; EST. 2.0%.

HIGHLIGHTS and News:  

• US THINKS ISRAEL-HAMAS CEASEFIRE IN CLOSING STAGES: OFFICIAL
• Harris to meet with Netanyahu at 4:30ET today
• Barack Obama will endorse VP Kamala Harris soon, NBC reported
  
• The yen strengthened more than 3% against the dollar this week
• Carry trades remain under pressure amid a global stock selloff
• Israel air force commander Bar: “We are ready for war in the north”

Global equities are broadly lower as a wave of earnings misses and worries about US economic growth are driving losses. Stock markets were locked in a multi-trillion
dollar tailspin as a slump in global tech stocks sent investors fleeing to traditional safe havens like bonds, the yen and Swiss franc. The yen’s stunning revival is upending global markets, dragging the yuan higher alongside it and hammering assets from Japanese
stocks to gold and Bitcoin as investors reassess their leveraged bets. The sell-off in stocks saw investors ramp up bets on rate cuts globally, with futures implying a 100% chance of a Federal Reserve easing in September. Policy decisions are due next week
from the Fed as well as the Bank of Japan. MSCI’s broadest index of world stocks lost 1%.

EQUITIES:  

US equity futures are mostly lower ahead of the data, following the worst day for the Nasdaq since 2022 after underwhelming earnings from the likes of Alphabet and Tesla. Concern about
the economy kicked into high gear on Wednesday after former New York Fed President William Dudley called for lower borrowing costs — preferably at next week’s gathering. Such a move could be worrisome as it would indicate officials rushing to avoid a recession,
some analysts said. Attention now turns to advance US gross domestic product data which is forecast to show growth picking up to an annualized 2% in the second quarter.   

Futures ahead of the data: E-Mini S&P -0.2%, Nasdaq -0.2%, Russell 2000 +0.01%, DJI +0.1%

In pre-market trading, American Air (AAL) slips 7% after the company slashed its earnings outlook for this quarter and the full year. Chipotle Mexican Grill (CMG) advances 3.7% after
the burrito chain reported 2Q comparable sales that beat expectations. Day One Biopharmaceuticals (DAWN) gains 9% following a licensing pact with Ipsen to commercialize tovorafenib for the most common childhood brain tumor. Edwards Life (EW) tumbles 24% after
the maker of heart valves posted disappointing 2Q sales and said it has agreed to buy JenaValve Technology and Endotronix for about $1.2 billion. Ford (F) plunges 12% after the company posted second-quarter profit that fell short of Wall Street estimates.
Honeywell (HON) declines 4% after the industrial company cut its adjusted earnings per share forecast for the full year. International Business Machines (IBM) rises 2% after the IT services company reported second-quarter results that beat expectations. Las
Vegas Sands (LVS) falls 3% after the casino operator’s 2Q revenue fell short of expectations. New York Community Bancorp (NYCB) slides 7% after the lender reported a provision for credit losses for the second quarter that was higher than the average analyst
estimate. ServiceNow (NOW) jumps 7% after the software company boosted its subscription revenue forecast for the full year. Viking Therapeutics (VKTX) climbs 15% after the drug developer said it is advancing its weight-loss shot into a late-stage trial.

Staples versus Consumer Discretionary

European gauges tumbled on the busiest day of the corporate earnings season. The Europe Stoxx 600 lost more than 1% as results from Nestle SA and Gucci owner Kering SA showed consumers
are cutting spending on everything from food to luxury handbags. The technology and media sectors were the biggest decliners, while telecom outperformed. STMicroelectronics NV and BE Semiconductor Industries NV both sank more than 10% as investors flee high-flying
chipmakers. Stellantis NV’s shares plummeted as much as 10% after the carmaker said it was bringing back old models and mulling price cuts to cope with a massive drop in sales. In Germany, the business outlook unexpectedly fell just a day after data showed
an unexpected plunge of the S&P Global Purchasing Managers’ Index. French business confidence posted a similar slump, reaching levels not seen since the Covid pandemic. Stoxx 600 -1.3%, DAX -1.2%, CAC -1.9%, FTSE 100 -0.5%. Media -3.6%, Autos -2.8%, Technology
-2.8%, Banks -2.2%. Telecom +0.4%, Utilities +0.15%.

Asian stocks fell to a one-month low, as technology stocks dropped following a rout in US peers. Japan’s Nikkei 225 tumbled more than 3%, exacerbated by a 11% plunge in Nissan Motor after
its quarterly profit slumped 99%. The stronger yen, which hurts Japanese exporters, helped send the index into a technical correction. The MSCI Asia Pacific Index declined 1.5%, with Hitachi, SK Hynix and Tencent among the biggest drags.  Stocks also declined
in Hong Kong and mainland China amid continued concerns over Beijing’s ability to rejuvenate the economy. The People’s Bank of China unexpectedly lowered the cost of its one-year policy loans by 20 basis points, the most since April 2020. Taiwan’s market remained
closed due to a typhoon, meaning Asian chip heavyweight TSMC was not trading. Nikkei 225 -3.3%, Hang Seng Index -1.8%, Kospi -1.7%, ASX 200 -1.3%, Philippines -1.2%, CSI 300 –0.5%, Sensex -0.15%. CSI 1000 +0.03%.

FIXED INCOME: 
 

Treasuries rallied sharply as signs of a slowing economy and a recent stock-market rout fueled calls for quicker interest-rate cuts from the Federal Reserve. Shorter-dated
securities led gains, with the two-year yield falling as much as nine basis points to 4.34%, the lowest since early February. 10- year yield ~ 4.2%. The move narrowed the difference between 2 and 10-year yields to just 12 basis points. The curve is mixed.
$44b 7-year is last coupon auction until Aug. 9.

METALS: 

Gold fell and silver plunged as much as 5% amid signs that traders were unwinding previously popular wagers to embrace the Japanese currency. Iron ore prices fell
almost 1% as China concerns weigh, while copper slide as much as 1.2% on increasing pessimism on global demand outlook. Traders are awaiting key data that may offer clues on when the Fed will pivot to lower interest rates. Spot gold -1.3%, silver -4.6%.

ENERGY:   

Oil prices dropped nearly 2% due to fears of slowing economic growth in China, despite positive US inventory data. China’s recent interest rate cut and declining
crude oil imports raise concerns about weakening demand.  Weak refining margins worldwide and warnings of lower Q2 earnings from major oil companies add to the downward pressure on prices. WTI -1.8%, Brent -1.9%, US Nat Gas -0.2%, RBOB -1.7%.

CURRENCIES:   

In currency markets, the yen surged, with the upward momentum intact ahead of the Bank of Japan’s meeting next week where policymakers will debate whether or not
to raise interest rates. The currency rose to the highest in more than two months against the dollar, reflecting growing wagers that the interest rate gap between Japan and the US will likely narrow. Behind the yen’s comeback was a massive retreat in the global
carry trade that used low-yielding currencies like Japan’s to fund investments in higher yielders such as Mexico’s peso or the Australian and New Zealand dollars. US$ Index -0.1%, GBPUSD -0.25%, EURUSD +0.1%, USDJPY -0.8%, AUDUSD -0.9%, NZDUSD -0.5%, USDCHF
-0.8%, USDNOK +1%.

Spot Bitcoin -2.7%, Spot Ethereum -5.8%.

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
• Alarum Technologies (ALAR IT) ADRs Raised to Buy at Canaccord; PT $42
• MidCap Financial (MFIC) Raised to Buy at Compass Point; PT $16
• Oatly Group (OTLY) ADRs Raised to Outperform at BNPP Exane; PT $1.30
• Polaris (PII) Raised to Buy at DA Davidson; PT $87
• Roper (ROP) Raised to Outperform at Baird; PT $635
• Downgrades
• Edwards Life (EW) Cut to Neutral at Baird; PT $70
• Cut to Neutral at JPMorgan; PT $72
• Cut to Hold at Truist Secs; PT $82
• Lamb Weston (LW) Cut to Hold at TD Cowen; PT $61
• Cut to Hold at Stifel; PT $60
• Lululemon (LULU) Cut to Neutral at Citi; PT $300
• National Bank Holdings (NBHC) Cut to Neutral at Piper Sandler; PT $46
• NBT Bancorp (NBTB) Cut to Equal-Weight at Stephens; PT $49
• NextEra Energy Partners (NEP) Cut to Peerperform at Wolfe
• Novagold Resources (NG CN) Cut to Sector Perform at National Bank
• Omega Healthcare (OHI) Cut to Neutral at Mizuho Securities; PT $35
• ON Semi (ON) Cut to Sell at CFRA
• Rogers Communications (RCI/B CN) Cut to Hold at Canaccord; PT C$57
• Sage Therapeutics (SAGE) Cut to Neutral at JPMorgan; PT $12
• Sirius XM (SIRI) Cut to Sell at Citi; PT $2.80
• Tesla (TSLA) Cut to Neutral at KGI Securities; PT $236
• Western New England (WNEB) Cut to Neutral at Janney Montgomery; PT $9
• Initiations
• ARS Pharmaceuticals Inc (SPRY) Rated New Outperform at Raymond James
• Aura Biosciences (AURA) Rated New Buy at HC Wainwright; PT $21
• CBRE (CBRE) Rated New Equal-Weight at Morgan Stanley; PT $105
• Constellation Software (CSU CN) Rated New Buy at Jefferies; PT C$5,000
• D-Wave Quantum (QBTS) Rated New Buy at B Riley; PT $3
• Flotek Industries (FTK) Rated New Buy at Roth MKM; PT $6.50
• Idexx Labs (IDXX) Rated New Buy at BTIG; PT $580
• Inari Medical (NARI) Rated New Outperform at William Blair
• Landbridge (LB) Rated New Buy at Janney Montgomery; PT $36
• OptimizeRx (OPRX) Reinstated Buy at B Riley; PT $18.50
• Orchestra BioMed (OBIO) Rated New Buy at B Riley; PT $15
• Performant Financial (PFMT) Rated New Buy at B Riley; PT $8
• Perspective Therapeutics (CATX) Rated New Buy at BofA; PT $24
• Rigetti Computing (RGTI) Rated New Buy at B Riley; PT $3
• Shopify (SHOP CN) Resumed Overweight at KeyBanc; PT $80
• Universal Technical Institute (UTI) Rated New Buy at Truist Secs
• Wix.com (WIX) Reinstated Sector Weight at KeyBanc
• Zoetis (ZTS) Rated New Buy at BTIG; PT $220

Data sources: Bloomberg, Reuters, CQG