Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Employment Report*; 10:00ET Factory Orders, Durable Goods, Cap Goods; 12:00ET Fed’s
Austan Goolsbee speaks

US JULY UNEMPLOYMENT RATE 4.3%; EST. 4.1% – US JULY NONFARM PAYROLLS RISE 114K M/M; EST. +175K – TREASURY YIELDS EXTEND SLIDE AFTER WEAK JULY JOBS DATA

HIGHLIGHTS and News:  

• US prepares to counter Iranian attack on Israel within days, US officials said yesterday
• S&P 500 sees worst start to month of August since 2002
• TRUMP: WOULD RAISE TARIFFS ON `EVERY COUNTRY THAT MISTREATS US’
• US recognizes Maduro’s opponent as winner in Venezuela election
  

US equity futures are sharply lower following downbeat forecasts from Amazon and Intel, with investors awaiting a crucial jobs report for further clues on the labor
market amid lingering concerns over an economic slowdown.  Economists expect US employers added 175,000 new hires in July, down from 206,000 a month earlier.  As manufacturing and jobs data are pointing toward recession levels, investors are now questioning
whether the Fed is cutting too late. Meanwhile, disappointing earnings from US tech behemoths has cooled optimism over artificial intelligence. The VIX breached the long-term average level of 20 points for the first time since mid-April. Investors should sell
stocks on the first Fed rate cut due to increasing probability of a US hard landing, BofA’s Michael Hartnett said.        

EQUITIES:  

Nasdaq saw a more than 700-point reversal from highs to lows yesterday ahead of AMZN and AAPL earnings. It was Nasdaq 100’s fourth one-day drop of 2% or more since July 11th.

Futures ahead of the data: E-Mini S&P -1.1%, Nasdaq -1.6%, Russell 2000 -1.5%, DJI -0.8%

In pre-market trading, Amazon.com (AMZN) slumped 8% after the company reported slowing online sales growth in the second quarter and said cautious consumers were seeking out cheaper options
for purchases. Intel Corp. (INTC) plunge more than 22% after giving a grim growth forecast and laying out plans to slash 15,000 jobs. Apple (AAPL) slipped 0.8% amid a broader weakness in megacap stocks, even as it posted better-than-expected third-quarter
iPhone sales and forecast more gains betting on AI to attract buyers.  Snap dropped 17% as revenue undershot estimates. Exxon Mobil (XOM +1%) exceeded profit expectations after the $63 billion acquisition of Pioneer Natural Resources Co. pushed oil and natural
gas output to a record. Ardelyx (ARDX) shares rise 8.5% after the company reported total revenue for the second quarter that beat. Cloudflare (NET) shares gain 9% after the cybersecurity company’s earnings and outlook surpassed analyst expectations. Lexicon
Pharma (LXRX) shares fall 15% after the company reported a second-quarter loss of 17c per share. Microchip Technology (MCHP) drops 6.7% as BofA downgrades the chipmaker to neutral from buy. Twilio (TWLO) shares are up 5.7% after the infrastructure-software
company reported second-quarter results that beat expectations.

The Imoku cloud is still pretty thick which should be supportive if SPX slides into the cloud.

REITs have been outperforming with the move lower in rates. REITs ETF relative to S&P 500 at key resistance area around the 200dma in XLRE vs SPY.

European gauges declined for a second day, joining a global selloff amid concerns over tech earnings and economic growth. The Euro Stoxx 600 is near the lows of the day with all of the
region’s main equity sectors in the red. European technology stocks lead losses, falling to their lowest level in over six months as investors dumped semiconductor stocks following disappointing earnings from Intel. ASM International NV sank 7.8% and ASML
Holding NV tumbled 5.3%. Swiss stocks underperformed as trading resumed after a local holiday on Thursday, with heavyweight UBS Group AG down over 5%. UK retail traffic slumped for a 12th consecutive month in July, data showed. Stoxx 600 -1.7%, DAX -1.6%,
CAC -0.7%, FTSE 100 -0.4%, Swiss Market Index –2.8%. Technology -4.5%, Financial Services -4%, Construction -2.5%, Travel & Leisure -2.2%.

Asian stocks tumbled as sentiment was hit by a triple whammy of a selloff in Japanese equities, a global tech rout and signs of weakness in the US economy.  The MSCI Asia Pacific Index
plunged 3.4%, the most since February 2021, for its third-straight week of declines. Taiwan Semiconductor Manufacturing Co., Mitsubishi UFJ Financial Group and Samsung Electronics among the biggest drags. Japanese stocks are falling out of favor as the prospect
of further interest-rate hikes by the country’s central bank supports the yen, hitting exporters’ shares. The
Topix Index sank the most since 2016 and entered a technical correction in its worst two-day rout since 2011, while benchmarks in the tech-heavy markets of South Korea and Taiwan fell about 4%. The decline in Korea’s Kospi Index puts the gauge at less
than 1% away from erasing year-to-date gains. Topix -6.1%, Nikkei 225 -5.8%, Taiwan -4.4%, Kospi -3.6%, ASX 200 -2.1%, Hang Seng Index -2.1%, Singapore -1.1%, Sensex -1.1%, CSI 300 -1%, Vietnam +0.8%.

FIXED INCOME: 
 

A rally in Treasuries extended into a seventh straight day, as traders looked to upcoming jobs data to justify increasingly aggressive bets on a rapid series of interest-rate
cuts. Markets now see the Federal Reserve delivering three consecutive quarter-point cuts in September, November and December. The 10-year Treasury yield dropped 4 bps to 3.935% as investors poured into the safe-haven bonds. The policy sensitive 2-year yield
touched its lowest level since May 2023 at 4.105%. The curve is flatter by 1.5bps.

METALS: 

Gold climbed toward record-high levels as traders flocked to haven assets ahead of key US economic data.  Gold is set for its biggest weekly gain in four months and
may get fresh tailwinds from the Fed and risk-off sentiment. The market is now waiting to see if the Fed will take steps to jolt the world’s largest economy. Spot gold +0.4%, silver +1.3%.

ENERGY:   

Oil prices are lower and on course for a fourth successive weekly decline as signs of disappointing global fuel demand growth outweigh fears of supply disruptions
on rising Mideast tensions. WTI and Brent are likely to settle the week below their 200 week moving averages for the first time since climbing above in February 2021. It’s been a volatile week. Crude slumped to a seven-week low after weak China data underlined
concerns about demand from the world’s largest crude importer. WTI -0.9%, Brent -0.9%, US Nat Gas +2%, RBOB -0.7%.

CURRENCIES:   

In currency markets, the dollar is lower as investors awaited key US employment data that may bolster the case for the Federal Reserve to make a more aggressive switch
to cutting interest rates. While signs of a slowing US economy have been weighing on the dollar, escalating geopolitical risks in the Middle East have limited the blow by boosting appetite for haven investments. The Swiss franc rose to its strongest level
since early February versus the dollar. USDJPY is slightly lower but still holding the key Fibonacci .618 retracement level on the year (148.51). US$ Index -0.35%, GBPUSD +0.01%, EURUSD +0.4%, USDJPY -0.2%, AUDUSD +0.2%, USDNOK +0.4%, USDCHF -0.3%.

Spot Bitcoin -0.1%, 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
• Alcoa (AA) Raised to Peerperform at Wolfe
• ARC Resources (ARX CN) Raised to Buy at Canaccord; PT C$29
• BioNTech (BNTX) ADRs Raised to Buy at HSBC; PT $101
• Blue Owl Capital (OWL) Raised to Outperform at Oppenheimer; PT $21
• Ferrari (RACE) Raised to Buy at Intesa Sanpaolo; PT $467.16
• Raised to Overweight at Barclays; PT $485.73
• First Bancshares/MS (FBMS) Raised to Outperform at KBW; PT $40
• Frontdoor Inc (FTDR) Raised to Outperform at William Blair
• Gildan Activewear (GIL CN) Raised to Buy at Stifel Canada; PT C$70.66
• Grid Dynamics (GDYN) Raised to Buy at TD Cowen; PT $16
• Intuitive Surgical (ISRG) Raised to Buy at Redburn; PT $510
• Lions Gate (LGF/A) Raised to Overweight at Morgan Stanley; PT $10.50
• Mobileye (MBLY) Raised to Equal-Weight at Morgan Stanley; PT $18
• NFI Group (NFI CN) Raised to Neutral at CIBC; PT C$20
• Omnicell (OMCL) Raised to Equal-Weight at Barclays; PT $39
• Qualcomm (QCOM) Raised to Buy at DZ Bank; PT $210
• Renasant (RNST) Raised to Outperform at KBW; PT $40
• Downgrades
• Alexandria Real Estate (ARE) Cut to Hold at Jefferies; PT $127
• Alphatec (ATEC) Cut to Equal-Weight at Morgan Stanley; PT $8
• Amazon (AMZN) Cut to Hold at Punto Casa de Bolsa; PT $192.16
• Appian (APPN) Cut to Sector Weight at KeyBanc
• Atlassian (TEAM) Cut to Neutral at Baird; PT $175
• Bausch Health (BHC CN) Cut to Underweight at Piper Sandler; PT C$4.16
• Builders FirstSource (BLDR) Cut to Neutral at BofA
• CenterPoint Energy (CNP) Cut to Neutral at JPMorgan; PT $29
• Cut to Market Perform at BMO; PT $28
• Cut to Sector Weight at KeyBanc
• Intel (INTC) Cut to Market Perform at Raymond James
• Cut to Reduce at HSBC; PT $19.80
• Ionis Pharma (IONS) Cut to Market Perform at BMO; PT $60
• Lululemon (LULU) Cut to Neutral at Goldman; PT $286
• Microchip (MCHP) Cut to Neutral at BofA
• Morgan Stanley (MS) Cut to Underweight at Wells Fargo; PT $95
• Nutrien (NTR CN) Cut to Reduce at HSBC; PT C$62.35
• Oaktree Specialty (OCSL) Cut to Market Perform at Oppenheimer; PT $18
• Open Text (OTEX CN) Cut to Sector Perform at National Bank; PT C$52.65
• Procore Technologies (PCOR) Cut to Neutral at DA Davidson; PT $60
• Cut to Equal-Weight at Barclays; PT $54
• Real Matters (REAL CN) Cut to Sector Perform at National Bank; PT C$8
• SmartRent (SMRT) Cut to Neutral at BTIG
• Southern Co (SO) Cut to Peerperform at Wolfe
• Initiations
• Brookfield Asset Management (BAM CN) Rated New Hold at Jefferies
• California Resources (CRC) Rated New Buy at TD Cowen; PT $65
• Crispr Therapeutics (CRSP) Rated New Buy at Rodman & Renshaw; PT $90
• L’Oreal (OR FP) ADRs Rated New Buy at Berenberg; PT $109
• Lionsgate Studios (LION) Rated New Overweight at Morgan Stanley
• Rani Therapeutics (RANI) Rated New Outperform at Oppenheimer; PT $17
• Regulus Therapeutics (RGLS) Rated New Outperform at Oppenheimer; PT $7
• Seven Hills Realty Trust (SEVN) Rated New Buy at Janney Montgomery
• Symrise (SY1 GR) ADRs Rated New Hold at Berenberg; PT $29.80
• Texas Instruments (TXN) Rated New Add at Great Wall Securities
• Vext Science (VEXT CN) Rated New Overweight at Zuanic
• Wallbox (WBX) Reinstated Hold at TD Cowen; PT $2

Data sources: Bloomberg, Reuters, CQG