Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Trade Balance

HIGHLIGHTS and News:  

• 9 UN employees fired after investigation into ties to October 7th terror attack on Israel
• TESLA CHINA RECALLS 1,683,627 CARS: CCTV
  
• Kamala Harris to announce running mate today

World stock markets whipsawed, surrendering earlier gains, with investors braced for more volatility in the aftermath of Monday’s historic selloff. The rebound in
Japanese shares overnight delivered an initial sense of relief after key gauges there saw their biggest daily sell-off since the 1987 Black Monday crash in the prior session. Nerves remained high after news that five US personnel were injured in an attack
on a military base in Iraq on Monday, as the Middle East braced for a possible new wave of attacks by Iran and its allies. Lebanon is working to ensure any Hezbollah response to Israeli attack does not cause wider war. Hezbollah and Israeli forces exchanged
fire today, with several projectiles penetrating Israeli airspace from Lebanon. Hezbollah warned that its much-anticipated retaliation for Israel’s killing of a top commander last week was yet to come.

EQUITIES:   F&G Index at 19. Was 46 a week ago.

US equity futures pared some overnight gains but remain solidly in the green. Federal Reserve officials sought to reassure markets with San Francisco Fed President Mary Daly saying it
was “extremely important” to prevent the labor market tipping into a downturn. Daly said her mind was open to cutting interest rates as necessary and policy needed to be proactive. With risks tilted to further unwind, Citi strategists recommended waiting before
buying the dip in stocks.   

Futures ahead of the bell: E-Mini S&P +0.65%, Nasdaq +0.4%, Russell 2000 +0.5%, DJI +0.4%

In pre-market trading, Palantir Technologies (PLTR) jumped as much as 13% after the company raised its annual outlook, citing continuing demand for its artificial intelligence software.
Caterpillar (CAT) rises 4% after the company said it anticipates its annual profit will be higher than previously expected, despite seeing slightly lower sales for the full year. Uber (UBER) rises 6% after it reported better-than-expected gross bookings. Celsius
Holdings (CELH) climbs 6% after the energy-drink maker posted 2Q revenue and profit that topped Wall Street expectations. Chegg (CHGG) slides 17% after the education technology company’s forecast for 3Q adjusted Ebitda missed estimates. Lucid (LCID) jumps
11% as the EV startup will get a cash infusion of as much as $1.5 billion from an affiliate of Saudi Arabia’s Public Investment Fund. Lumen Technologies (LUMN) soars 40% after the company said artificial intelligence demand has driven $5 billion of new business
and that it is in talks for a further $7 billion in potential sales. Teradata (TDC) falls 7% after the software company reported 2Q revenue that missed expectations. Vimeo (VMEO) climbs 11% after the video software company forecast revenue for the full year
above estimates. Yum China (YUMC) jumps 8% after the fast-food chain operator’s restaurant margin held up better than expected. ZoomInfo Technologies (ZI) drops 13% after the infrastructure-software company reported 2Q results that missed expectations and
cut its full-year profit forecast.

XLK fell nearly 20% from the July 11^th high. S&P 500 Growth has underperformed sharply vs Value since July 10th; nearing its 200dma in the pair.

European gauges opened firmer before giving back all of their gains as regional shares struggled to match the rebound in Asia.  The Euro Stoxx 600 is slightly lower after earlier rising
as much as 1%. Technology stocks outperformed, while real estate and auto were the biggest decliners. German factory orders rose for the first time this year, jumping 3.9% in June topping estimates for a gain of 0.5%. Warm weather helped return UK retail sales
to a modest 0.5% growth last month. Stoxx 600 -0.15%, DAX -0.2%, CAC -0.4%, FTSE 100 -0.4%. Tech +1%, Food & Bev ~flat. REITs -1.4%, Autos -1%, Banks -0.9%.

Asian shares rose, led by outsized gains in Japan after its worst single-day drop since 2008. The MSCI Asia Pacific Index jumped as much as 4.2% following a rout of more than 6% on Monday. Japan
led the rebound in the region as the yen eased following steep gains against the dollar that drove the nation’s stocks into a bear market. Japanese workers’ real wages unexpectedly rose for the first time in more than two years, climbing 1.1% in June from
a year earlier. Stocks also bounced back in technology-heavy South Korea and Taiwan, while Chinese shares were mixed. Nikkei 225 +10.2%, Topix +9.3%, Taiwan +3.4%, Kospi +3.3%, Vietnam +1.9%, CSI 1000 +1.5%, ASX 200 +0.4%, Shanghai Composite +0.2%. CSI 300
-0.01%, Sensex -0.2%, Hang Seng Index =0.3%, Singapore -1.4%.

FIXED INCOME: 
 

US Treasuries fell as demand for haven assets waned globally, with the market now turning to a $58 billion auction as the next test of investor appetite. Yields jumped
about five basis points across the curve ahead of a US Treasury sale of new three-year notes. This week’s US Treasury auction cycle also includes a $42 billion 10-year sale on Wednesday and a $25 billion 30-year new issue Thursday. Market expectations the
Fed would cut by 50 basis points at its September meeting remained intact, with futures implying a 71% chance of such an outsized move. The market has around 100 basis points of easing priced in for this year, and a similar amount for 2025. An emergency cut
as soon as this month has now been ruled out by money markets. 10-year yield around 3.835% is about 4bp cheaper on the day. 2-year yield is up ~3bps at 3.955%. The curve is mixed.

METALS: 

Gold is steady this morning after being pulled into Monday’s global rout, when it slumped 1.5% as some traders cut holdings to cover potential margin calls. Gold
fluctuated overnight in a tight range as traders weighed Federal Reserve officials’ comments and growing geopolitical risks. San Francisco Fed President Mary Daly indicated that interest rate cuts are likely later this year, though she refrained from specifying
timing or extent. Spot gold -0.01%, silver -0.8%.

ENERGY:   

Oil prices are nearly flat after paring earlier gains made on heightened concerns of a wider conflict in the Middle East after news that several US personnel were
injured in an attack against a military base in Iraq. Tropical storm Debby was moving slowly over southeastern Georgia with a major flood threat for the next several days, the National Hurricane Center said. Brent touched a seven-month low and WTI traded at
its lowest since early February during Monday’s session, pulled down by a global equity rout. Goldman sees a floor for Brent at $75 and warned that risks to the downside will increase next year. WTI -0.1%, Brent -0.1%, US Nat Gas -0.6%, RBOB -0.4%.

CURRENCIES:   

In currency markets, the yen weakened, snapping a five-day rally. The yen has shot higher in recent sessions as investors were squeezed out of carry trades. The dollar-yen
pair has now fallen 12% since peaking five weeks ago and is in highly oversold territory. According to JPMorgan, the unwinding of the yen carry trade is only about 50% complete as the yen remains one of the most undervalued currencies. The dollar firmed as
markets pared an aggressive ramp-up in Fed easing bets. Aussie dollar eases after rising as much as 0.7% versus the dollar, following the RBA’s decision to leave rates unchanged at a 12-year high. Australia’s central bank held interest rates steady and ruled
out the possibility of an interest rate cut this year, saying core inflation is expected to come down only slowly.  US$ Index +0.5%, GBPUSD -0.6%, EURUSD -0.35%, USDJPY +0.5%, AUDUSD -0.2%, NZDUSD -0.3%, USDCHF +0.1%.

Spot Bitcoin +1.4%, Spot Ethereum +0.8%.

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
• Cadence Design (CDNS) Raised to Overweight at Piper Sandler; PT $318
• Criteo (CRTO) ADRs Raised to Buy at DA Davidson; PT $58
• CrowdStrike (CRWD) Raised to Overweight at Piper Sandler; PT $290
• Eastern Bankshares (EBC) Raised to Neutral at JPMorgan; PT $18.50
• Lionsgate Studios (LION) Raised to Buy at Seaport Global Securities
• Lucid (LCID) Raised to Neutral at Cantor; PT $4
• Lumen Technologies (LUMN) Raised to Neutral at Citi; PT $3.15
• Sonic Automotive (SAH) Raised to Overweight at JPMorgan; PT $63
• Telecom Argentina (TECO2 AR) ADRs Raised to Sector Perform at Scotiabank
• Tesla (TSLA) Raised to Buy at Punto Casa de Bolsa; PT $270.05
• Downgrades
• Akoya Biosciences (AKYA) Cut to Neutral at BTIG
• Cut to Neutral at JPMorgan
• American Electric Power (AEP) Cut to Underperform at BofA; PT $97
• Carlyle Group (CG) Cut to Neutral at JPMorgan; PT $44
• Cognition Therapeutics (CGTX) Cut to Neutral at B Riley; PT $1
• Endeavour Mining (EDV CN) Cut to Sector Perform at RBC; PT C$40
• Krystal Biotech (KRYS) Cut to Neutral at Citi; PT $204
• Playstudios (MYPS) Cut to Hold at Benchmark
• Telus International CDA (TIXT CN) Cut to Hold at TD Cowen
• Telus (T CN) Cut to Hold at Canaccord; PT C$21.50
• Teradata (TDC) Cut to Market Perform at JMP
• Thoughtworks (TWKS) Cut to Neutral at Baird; PT $4.40
• Cut to Neutral at JPMorgan
• ZoomInfo (ZI) Cut to Market Perform at Raymond James
• Cut to Neutral at DA Davidson; PT $9.50
• Cut to Sector Weight at KeyBanc
• Initiations
• Aspen Aerogels (ASPN) Rated New Overweight at Barclays; PT $27
• Cartesian Therapeutics (RNAC) Rated New Buy at TD Cowen
• GE Healthcare (GEHC) Rated New Buy at Stifel; PT $100
• Haleon (HLN LN) ADRs Rated New Buy at Berenberg; PT $11.44
• Realty Income (O) Resumed Equal-Weight at Morgan Stanley; PT $62
• Six Flags (FUN) Rated New Underweight at JPMorgan; PT $50

Data sources: Bloomberg, Reuters, CQG