Daily Game Plan

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

TODAY’S ECONOMIC DATA:  12:00ET Fed’s Susan Collins speaks; 1:00ET 10-Year Note Auction; 3:00ET Consumer Credit

HIGHLIGHTS and News:  

• Mnuchin says it’s time to kill 20-year Treasury bond he created that’s costing taxpayers a lot of money
  
• The yen is sharply higher on Uchida remarks
• NETANYAHU: ISRAEL IS PREPARED FOR BOTH DEFENSE AND ATTACK
  
• Missouri’s Cori Bush lost her primary battle to Wesley Bell, driven by Democratic Party divisions over Israel
• TRUMP SAYS WE HAVE TO FILL UP THE STRATEGIC OIL RESERVES IMMEDIATELY
  

World stock markets gained following a rebound in major indexes on Wall Street that broke a three-day stretch of losses. Sentiment increased after Bank of Japan Deputy
Governor Uchida sent a strong dovish signal by pledging to refrain from hiking interest rates when the markets are unstable. Government bonds across the US and Europe fell as the panic that gripped global markets earlier this week continued to subside. Israel
estimates that Hezbollah will attack before Iran, according to Kann News. Israel’s Channel 12 News reported that advanced preparations are underway for the launch of pre-emptive strikes against Hezbollah targets in Lebanon. Some Israeli officials believe Iran
is getting “cold feet” and reconsidering a major response against Israel.  US Defense Secretary Austin said the US is ready to deploy more troops to the region if they see a threat to their interests and the security of allies. Cease-fire talks between Israel
and Hamas are in their final stage and should be finished “very, very soon,” US Secretary of State Antony Blinken said.

EQUITIES:  

US equity futures extend their bounce amid a wave of dip buying. The Cboe Volatility Index declined another 17% today following its biggest plunge since 2010. Goldman Sachs on Tuesday
said it has introduced a new Financial Stress Index (FSI) that, while tightening over the last two days of market disturbance, remains at relatively normal levels by historical standards. Currently the FSI implies a roughly 12 basis point net reduction in
gross domestic product growth over the next year.

Futures ahead of the bell: E-Mini S&P +1%, Nasdaq +1.4%, Russell 2000 +1.5%, DJI +0.8%

In pre-market trading, Fortinet (FTNT) shares soared 16% after the cyber-security company forecast adjusted earnings per share that beat estimates. Super Micro Computer (SMCI) plunged
14% after an earnings report that revealed margin pressure at the computer hardware maker. Airbnb (ABNB) slumped 14% on a disappointing outlook. Rivian (RIVN) drops 7% after the electric vehicle startup warned of a looming plant shutdown next year to prepare
for a new vehicle launch. Shopify (SHOP) gains 17% after posting 2Q results that exceeded analysts’ estimates. CVS shares fell after it lowered its full-year earnings outlook for a third quarter and announced cost-cutting measures. Reddit’s sales forecast
topped estimates. Emergent BioSolutions (EBS) slumps 34% after the company forecast 3Q revenue that fell short of analyst estimates. Lumen Technologies (LUMN) soars 24% after the company boosted its full-year free cash flow forecast. Porch Group (PRCH) sinks
19% after the home-services software company reported 2Q results that missed expectations. Trex (TREX) falls 17% after the manufacturer of decking cut its year revenue forecast. TripAdvisor (TRIP) tumbles 19% after the online travel company reported 2Q revenue
that missed. Upstart (UPST) soars 25% after the AI lending marketplace firm gave a 3Q forecast that is stronger than expected. Disney shares fluctuated with weakness at its theme parks offsetting its first-ever profit in streaming.

European gauges extended earlier gains, tracking a global rally across equity markets. The Euro Stoxx 600 grinds steadily higher, with banks, construction and auto names leading gains.
Mixed earnings reports from some of the region’s biggest companies did little to dampen the risk-on mood. Novo Nordisk A/S shares dropped after the Danish drugmaker reported that Wegovy sales missed estimates and cut its profit forecast for the year. German
lender Commerzbank AG, sportswear maker Puma SE and skin-care products maker Beiersdorf AG also slumped after earnings misses. On the positive side, shares in Continental AG rose after the German manufacturer posted improving returns at its struggling car-parts
unit, which it may spin off in its biggest-ever restructuring. Dutch lender ABN Amro Bank NV gained after the Dutch lender raised its outlook for lending income. German industrial production rose more than expected in June, increasing 1.4% from May. German
Exports in June fell 3.4% versus expectations for -1.5% (Prev. -3.6%).  Stoxx 600 +1.3%, DAX +1.2%, CAC +1.6%, FTSE 100 +1.2%. Banks +2.5%, Construction +2.3%, Autos +2%, Energy +1.8%.

Asian equities advanced after the Bank of Japan unexpectedly turned cautious on rate hikes amidst market volatility, inducing a sharp fall in the yen. BOJ Governor Uchida Shinichi said
that “the Bank needs to maintain monetary easing with the current policy interest rate for the time being.”  The MSCI Asia Pacific Index climbed 1.4% with technology stocks leading gains across the region as concerns about further unwinding of the yen carry
trade eased. Japan’s heavyweight trading houses extended gains for a second day, with Mitsui up 10.2%; SoftBank Group jumped 5.2% after announcing a buyback worth up to $3.4B. Taiwan’s Taiex index was at the top of the leaderboard, logging its biggest single-day
rally since May 2021. Shares related to China’s electricity grid tech advance as the nation plans to build a new power system to increase the supply of electricity generated through renewable energy. Mainland China’s CSI 300 ended the day flat after Chinese
trade figures were released.  Data out of China showed imports in July grew faster-than-expected, while exports missed forecasts. Taiwan +3.9%, Topix +2.3%, Kospi +1.8%, Singapore +1.6%, Hang Seng Index +1.4%, Sensex +1.1%, Vietnam +0.5%, ASX 200 +0.25%. CSI
300 -0.04%.

FIXED INCOME: 
 

Treasuries are cheaper across the curve following deeper selloff in core European rates after Bank of Japan Deputy Governor Shinichi Uchida pledged to refrain from
hiking interest rates while markets are unstable. US 10-year yields climbing 4bps to 3.935% as traders pare bets on Fed interest rate cuts this year. Treasury yields cheaper by 3bp-5bp with curve spreads slightly steeper. Treasury auction cycle continues with
$42b 10-year new issue, following good result for Tuesday’s $58b 3-year note sale; it ends Thursday with $25b 30-year bond sale.

METALS: 

Gold steadied after a four-day losing streak as traders took stock of the mood across wider financial markets. Base metals are primarily weaker after mixed Chinese
trade data and with Copper leading the downside after a sizeable LME stock build.  Copper declined about 1% and is now very close to a 20% retracement from the record close set in May. Spot gold +0.4%, silver +0.4%, copper -1%.

ENERGY:   

Oil prices moved higher, though Brent still languished near seven-month lows, pressured by concerns over weak demand and fears of recession in the US. The threat
of conflict escalating in the Middle East, jeopardizing oil production has supported prices. Crude stockpiles at Cushing rose by more than 1 million barrels last week, API data showed, the biggest surge in more than two months if confirmed by the EIA. Total
inventory also rose. Chinese trade data showed that July daily crude oil imports fell to the lowest level since September 2022. Meanwhile, Tropical Storm Debby is turning toward Georgia and the South Carolina coastline with a major flood threat.  WTI +2.5%,
Brent +2.2%, US Nat Gas +4%, RBOB +1.1%.

CURRENCIES:   

In currency markets, Uchida’s comments have pressured the yen, which is down 2% against the greenback. BoJ’s Shinichi Uchida said market volatility is very large
and will be keeping a close eye on moves and the impact on the economy and prices. Citi said China’s yuan is more at risk of being squeezed by the unwind of global carry trades as positioning in the yen isn’t extreme.  The Swiss franc also underperforms while
the kiwi outperforms after the unemployment rate rose less than expected. The dollar edged higher as traders pared back their expectations for aggressive Federal Reserve interest-rate cuts.  US$ Index -0.15%, GBPUSD +0.3%, EURUSD -0.05%, USDJPY +2%, AUDUSD
+0.7%, USDNOK -1.5%, USDCHF +1.25%.

Spot Bitcoin +1.2%, Spot Ethereum -0.4%.

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
• Arcosa (ACA) Raised to Overweight at Stephens; PT $96
• ARM Holdings (ARM) ADRs Raised to Market Perform at Bernstein; PT $100
• BioNTech (BNTX) ADRs Raised to Buy at Deutsche Bank
• Builders FirstSource (BLDR) Raised to Outperform at Baird; PT $190
• Eve Holding (EVEX) Raised to Overweight at Cantor; PT $5
• Fortinet (FTNT) Raised to Hold at HSBC; PT $59
• Globus Medical (GMED) Raised to Overweight at Wells Fargo; PT $78
• Lumen Technologies (LUMN) Raised to Neutral at JPMorgan
• Raised to Neutral at Goldman; PT $4
• Pfizer (PFE) Raised to Outperform at Daiwa; PT $34
• Seadrill (SDRL NO) Raised to Buy at SEB Equities; PT $52
• Sphere Entertainment (SPHR) Raised to Buy at Seaport Global Securities
• Suncor (SU CN) Raised to Buy at TD Cowen; PT C$59
• Raised to Outperform at BMO; PT C$62
• TrueCar (TRUE) Raised to Buy at BTIG; PT $3.75
• Vertiv Holdings (VRT) Raised to Outperform at Mizuho Securities
• Downgrades
• Acadia Pharma (ACAD) Cut to Equal-Weight at Morgan Stanley; PT $20
• Amgen (AMGN) Cut to Equal-Weight at Wells Fargo; PT $335
• Atkore (ATKR) Cut to Sector Perform at RBC; PT $100
• Bicycle Therapeutics (BCYC) ADRs Cut to Neutral at B Riley; PT $28
• Cryoport (CYRX) Cut to Hold at Jefferies; PT $8
• Heartland BancCorp (HLAN) Cut to Neutral at DA Davidson; PT $145
• Millicom (TIGO) Cut to Sector Perform at Scotiabank; PT $30
• Molson Coors (TAP) Cut to Hold at TD Cowen; PT $58
• Nevro (NVRO) Cut to Underweight at Wells Fargo; PT $5.50
• Cut to Market Perform at JMP
• Cut to Underweight at JPMorgan
• Progyny (PGNY) Cut to Market Perform at Leerink
• Cut to Neutral at BTIG
• Cut to Hold at Canaccord; PT $24
• Shoals Technologies (SHLS) Cut to Neutral at BNPP Exane; PT $7
• Stellantis (STLA) Cut to Hold at Jefferies; PT $16.44
• Trex (TREX) Cut to Equal-Weight at Stephens; PT $72
• Cut to Hold at Loop Capital; PT $75
• TripAdvisor (TRIP) Cut to Neutral at B Riley; PT $19
• Vista Outdoor (VSTO) Cut to Neutral at B Riley; PT $43
• Initiations
• Abacus Life (ABL) Rated New Buy at TD Cowen; PT $14
• Cipher Mining (CIFR) Rated New Speculative Buy at Stifel Canada; PT $9
• Didi Global (DIDIY) ADRs Rated New Outperform at CLSA
• Natural Gas Services (NGS) Rated New Strong Buy at Raymond James

Data sources: Bloomberg, Reuters, CQG