Daily Game Plan

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

TODAY’S ECONOMIC DATA:  10:30ET Dallas Fed Manf. Activity

HIGHLIGHTS and News:  

• Biden Calls for Strict New Limits on US Supreme Court Justices
• TESLA REPLACES FORD AS TOP US AUTOS PICK AT MORGAN STANLEY
  
• McDonald’s same-store sales fall for the 1st time since the pandemic
  
• Apple’s AI upgrades will arrive a few weeks later than expected, missing the launch of iPhone and iPad software overhauls
  
• Israeli jets hit targets in southern Lebanon on Sunday in retaliation for a rocket strike in the Israeli-occupied Golan Heights

World equities gained after a strong Asian session, signaling rising optimism ahead of major central bank decisions and big tech earnings due this week. Major central
banks are set to meet in Japan and the US on Wednesday and the UK on Thursday.  Investors will be looking for answers about the near-term path of interest rates, after markets had been upended by conflicting signals from key economies. In Japan, Governor Kazuo
Ueda is setting a personal record for a lack of public comments before a policy meeting, and the latest economic data has shown inflation accelerating but consumer spending disappointing. Also due this week are the US jobs report for July, closely watched
surveys on US and global manufacturing, and euro zone gross domestic product and inflation data. Tensions grew in Venezuela after President Nicolás Maduro was declared winner of Sunday’s election. Antony Blinken said the US has “serious concerns” about the
results.    

EQUITIES:  

US equity futures are higher to begin a busy week that will feature a US jobs report and corporate results from Meta Platforms, Amazon.com, Microsoft and Apple, among others. Around 40%
of the S&P 500 by market worth will report this week. The Nasdaq 100 and S&P 500 indexes are both set to extend their rebound for a second day after last week’s tech-fueled slump. Morgan Stanley’s Michael Wilson warned a dimmer outlook for US earnings will
hurt cyclical stocks. President Biden will call for lawmakers to pass new binding ethics rules and term limits for Supreme Court justices today as part of a sweeping proposal that would fundamentally alter the US’s top court. The plan calls for a constitutional
amendment to ensure that former presidents can be tried for crimes committed while in office.  

Futures ahead of the bell: E-Mini S&P +0.4%, Nasdaq +0.9%, Russell 2000 +0.8%, DJI +0.4%

In pre-market trading, Tesla (TSLA) rises ~2% after Morgan Stanley named the company as its new top pick within the US autos sector, replacing Ford. Abbott (ABT) drops 6% after the company
was ordered by a jury to pay almost $500 million over allegations that it hid the risk that its premature-infant formula can cause a potentially fatal bowel disease. Alibaba (BABA) ADRs gain nearly 3% as investors cheered the e-commerce company’s plan to earn
more service fees from merchants. Anavex Life Sciences (AVXL) jumps 14% after the drug developer gave data from a mid-late stage trial of its experimental therapy for Alzheimer’s disease. Cognition Therapeutics (CGTX) shares were halted as the company said
a Phase 2 study showed consistent improvement in cognitive outcomes with once-daily oral CT1812 in mild-to-moderate Alzheimer’s patients. Enstar (ESGR) shares were halted as the company announced that it agreed to be acquired by Sixth Street for $5.1 billion.
Inspire Medical Systems (INSP) rises 12% after the medical-device maker boosted its revenue forecast for the full year. Iovance Biotherapeutics (IOVA) falls 11% after Piper downgraded the stock. Guardant Health (GH) rallies 14% after the firm’s Shield blood
test received FDA approval for colorectal cancer screening.

European gauges are mostly higher as investors braced for a week of much-anticipated central bank meetings and a renewed flood of earnings reports. Gauges in London lead the advance while
France underperforms. The Euro Stoxx 600 is holding gains in choppy trading with REITs and energy sectors outperforming while travel shares lag. Royal Philips NV surged as much as 11% after Dutch medical equipment maker’s order intake gained for the first
time in two years.  Heineken fell over 7% after the brewer took an €874 million impairment on an investment in China. Stoxx 600 +0.4%, DAX +0.2%, CAC -0.4%, FTSE 100 +0.9%. REITs +1.4%, Healthcare +1%, Energy +1%, Utilities +0.9%. Travel & Leisure -1.3%.

Shares in Asia advanced as traders braced for a week of policy decisions from major central banks, including the Bank of Japan. The MSCI Asia Pacific Index rose 1.1%, snapping a three-day
losing streak, with TSMC and Alibaba among the biggest boosts. Most regional markets including Japan, South Korea and Hong Kong gained, while onshore Chinese stocks dipped.  The weakness in China comes amid signs of slowing equity purchases by the so-called
national team. Japanese insurers’ climbed after Morgan Stanley raised its price target on some names, saying the sector is attractive on a “wealth of potential catalysts.” Topix +2.2%, Hang Seng Index +1.3%, Kospi +1.2%, ASX 200 +0.9%, Singapore +0.5%, Vietnam
+0.35%, Taiwan +0.2%, Sensex +0.03%. CSI 300 -0.5%, Philippines -1.1%.

FIXED INCOME: 
 

Treasuries hold gains that sent 5-year note’s yield to lowest level since March, following steeper advances for gilts and most euro-zone bond markets as prospect
of a Bank of England rate cut mounts ahead of Thursday’s policy meeting. US Treasuries are on pace to end July with a three-month winning streak last seen in mid-2021. Yields are lower by 2bp-4bp with curve spreads flatter. Swap markets are pricing about a
50% chance of a quarter-point reduction this week with two such moves this year seen as a near certainty. “The FOMC is set to hold steady but is likely to revise its statement to hint that a cut at the following meeting in September has become more likely,”
according to analysts at Goldman Sachs. 10-year yield ~4.16%.

METALS: 

Gold fluctuated as investors turned their attention to the upcoming Federal Reserve meeting, where policymakers are expected to lay the groundwork for a September
rate cut. Gold is seen as the best Trump trade in the latest MLIV survey. China’s gold demand fell almost 6% in the first half from a year earlier, implying a dramatic plunge in jewelry purchases in the second quarter. Spot gold +0.05%, silver +0.3%.

ENERGY:   

Oil prices erased earlier gains made on fears of a widening conflict in the Middle East following a rocket strike in the Israeli-occupied Golan Heights, which Israel
and the United States blamed on Lebanese armed group Hezbollah. Israel vowed retaliation in Lebanon against Iran-backed Hezbollah, which denied responsibility for the attack. Israeli jets hit targets in southern Lebanon on Sunday. Concerns about Chinese demand
continue to linger in the background. Meanwhile, markets are keeping a watch on oil producer Venezuela after the country’s electoral authority said that President Nicolas Maduro had won a third term with 51% of the vote despite multiple exit polls pointing
to an opposition win. WTI -0.7%, Brent -0.6%, US Nat Gas +0.2%, RBOB -0.6%.

CURRENCIES:   

In currency markets, the dollar edged higher while the yen steadied. The Bank of Japan is expected to release details of plans to cut monthly bond purchases at the
conclusion of its two-day policy meeting on Wednesday, while most economists also see the possibility of an interest rate hike. The assumption that further policy tightening is possible sent the yen racing to an almost three-month high last week, up by about
5% against the dollar since July 11. Meanwhile, the pound slipped amid speculation that the Bank of England may start cutting interest rates on Thursday, with markets pricing a roughly 50-50 chance of a rate cut. Sterling is the best performer in the Group-of-10
this year with bullish bets at the highest on record. The US Federal Reserve is likely to signal its intention to cut rates in September, according to economists surveyed by Bloomberg. Money markets are fully pricing in a September move. US$ Index +0.15%,
GBPUSD -0.2%, EURUSD -0.2%, USDJPY -0.03%, AUDUSD is flat, USDNOK -0.1%, USDCHF +0.05%.

Spot Bitcoin +2.6%, Spot Ethereum +3.8%. Bitcoin adding to gains following Trump’s pro-crypto speech on Saturday. Shares in companies linked to cryptocurrencies rallied
during premarket-trading after Donald Trump said he’ll turn the US into the “crypto capital” of the world if he returns to the White House. Bitcoin rose, extending its gains to the highest level in six weeks.

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
• 3M Co (MMM) Raised to Buy at Deutsche Bank
• Aecon Group (ARE CN) Raised to Outperform at National Bank; PT C$20.50
• Akamai (AKAM) Raised to Buy at Guggenheim; PT $128
• Alphabet (GOOGL) Raised to Buy at Phillip Secs; PT $205
• Apple (AAPL) Raised to Hold at Aletheia Capital
• Bally’s (BALY) Raised to Equal-Weight at Wells Fargo; PT $18.25
• Booz Allen (BAH) Raised to Overweight at Wells Fargo; PT $165
• Chesswood Group (CHW CN) Raised to Sector Perform at RBC; PT C$3.50
• Edwards Life (EW) Raised to Peerperform at Wolfe
• Northrop Grumman (NOC) Raised to Buy at Deutsche Bank
• Olin (OLN) Raised to Overweight at JPMorgan; PT $55
• Sarepta (SRPT) Raised to Outperform at RBC; PT $182
• Shyft Group Inc/The (SHYF) Raised to Buy at DA Davidson; PT $18
• Downgrades
• 1st Source (SRCE) Cut to Neutral at Piper Sandler
• Alexandria Real Estate (ARE) Cut to Neutral at BofA
• Bristol Myers (BMY) Cut to Underweight at Barclays; PT $41
• Capital City Bank (CCBG) Cut to Neutral at Piper Sandler
• Carlyle Secured Lending (CGBD) Cut to Underweight at JPMorgan; PT $17
• Everi Holdings (EVRI) Cut to Market Perform at Raymond James
• Cut to Hold at Craig-Hallum; PT $14.25
• Evotec SE (EVT GR) ADRs Cut to Equal-Weight at Morgan Stanley; PT $6
• Farmer Mac (AGM) Cut to Market Perform at KBW; PT $215
• Fiera Capital (FSZ CN) Cut to Underperform at National Bank; PT C$8
• First Commonwealth (FCF) Cut to Neutral at Janney Montgomery; PT $19
• First Hawaiian (FHB) Cut to Underweight at JPMorgan; PT $24
• Fortinet (FTNT) Cut to Neutral at Guggenheim
• General Dynamics (GD) Cut to Hold at Deutsche Bank
• Instructure (INST) Cut to Hold at Truist Secs; PT $23.60
• Cut to Sector Weight at KeyBanc
• Iovance Biotherapeutics (IOVA) Cut to Neutral at Piper Sandler; PT $10
• Schwab (SCHW) Cut to Neutral at Piper Sandler
• Seacoast Banking (SBCF) Cut to Market Perform at Hovde Group
• SLR Investment Corp (SLRC) Cut to Underweight at JPMorgan; PT $15
• TFI International (TFII CN) Cut to Reduce at Veritas Investment Research Co
• Initiations
• Abivax (ABVX FP) ADRs Rated New Buy at Laidlaw; PT $48
• Aclarion (ACON) Rated New Buy at Ascendiant Capital Markets; PT $1.60
• Astria Therapeutics Inc (ATXS) Rated New Buy at TD Cowen; PT $35
• Booking (BKNG) Rated New Buy at Fubon; PT $4,533
• Lithium Americas (LAC CN) Rated New Neutral at Piper Sandler
• Modine (MOD) Rated New Outperform at William Blair
• Nuwellis Inc (NUWE) Rated New Buy at Roth MKM; PT $17
• Palo Alto Networks (PANW) Rated New Buy at CMB International
• Simulations Plus (SLP) Rated New Overweight at KeyBanc; PT $47
• Smurfit WestRock (SW) Rated New Hold at Jefferies; PT $52
• TSMC (2330 TT) ADRs Rated New Buy at SPDB Intl HK; PT $197.60
• Zapp Electric Vehicles Group (ZAPP) Rated New Buy at ThinkEquity

Data sources: Bloomberg, Reuters, CQG