Daily Game Plan

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

TODAY’S ECONOMIC DATA:  11:00ET NY Fed 1-Yr Inflation Expectations; 2:00ET Monthly Budget Statement

Japan and US PPI, Tuesday; US CPI, Eurozone GDP, New Zealand rate decision on Wednesday; Australia unemployment, Japan GDP, China home prices, retail sales, Norway rate decision on Thursday;
Taiwan GDP on Friday

HIGHLIGHTS and News:  

• OPEC TRIMS OIL DEMAND FORECAST AHEAD OF DECISION ON SUPPLY HIKE
• The US ordered a nuclear-powered guided missile sub to the Middle East
• Elon Musk will interview Trump today on X
• The Trump campaign said its email systems were hacked

World stocks struggled to hold onto gains as investors prepared for a week packed with data globally. Money markets have fully priced a US rate cut in September and
about 100 basis points of easing for the year. Elsewhere on the monetary policy front, the European Central Bank is now seen as likely to cut its deposit rate once a quarter through the end of next year. Foreign investors pulled a record amount of money from
China last quarter, likely reflecting deep pessimism about the world’s second-largest economy. Chinese outbound investment also hit a record, with firms sending $71 billion overseas in the second quarter, up more than 80% from the same period last year. Israel
expanded evacuation orders in Khan Younis in the southern Gaza Strip overnight, forcing tens of thousands of Palestinian residents and displaced families to leave in the dark.

EQUITIES:  

US equity futures are marginally higher as traders prepared for a week packed with data that will shed light on the health of the world’s largest economy and the outlook for Federal Reserve
interest rates. Investors are preparing for US Producer Price Index figures due Tuesday and Consumer Price Index numbers on Wednesday. Meanwhile, as bond markets have moved to account for a Fed that is “behind the curve,” the risk isn’t “priced into current
equity multiples,” according to Morgan Stanley strategists. The team led by Michael Wilson said economic growth is the primary concern for investors, rather than inflation and rates. Investors did take flight from stocks during last week’s wild swings, reducing
their equity allocations at the sharpest pace since the onset of the Covid pandemic, according to data from Deutsche Bank AG. Aggregate allocation to stocks is now in the 31st percentile and underweight, after exposure was at the top of the historical range
in the 97th percentile just three weeks ago.

Futures ahead of the bell: E-Mini S&P +0.25%, Nasdaq +0.25%, Russell 2000 -0.15%, DJI +0.2%

In pre-market trading, B. Riley Financial (RILY) tumbles 25% after suspending its dividend as the boutique investment bank wrote down a portion of its stake in a US retail business. Hawaiian
Electric (HE) falls 11% after pegging losses from estimated accrual of liabilities stemming from one of the worst wildfires in US history at $1.7 billion and issuing a going-concern warning. Humacyte (HUMA) sinks 12% as the FDA needs more time to review a
biologic license application. JetBlue Airways (JBLU) slips 5% after announcing a $400 million convertible senior notes offering. KeyCorp (KEY) gains 14% after receiving a minority investment from Scotiabank. Monday.com (MNDY) rises 8% after posting a 2Q profit
that topped estimates. Pacira BioSciences (PCRX) drops 4% after a court found its Exparel 495 patent not valid. Starbucks (SBUX) rises 2% after the WSJ reported that activist investor Starboard Value has taken a stake.

European gauges erase early gains before grinding back into positive territory, with traders preparing for a busy week on the data front. The Euro Stoxx 600 is slightly higher on the
day with real estate and health care sectors lagging peers, while energy and miners lead gainers. The European gauge is still down 3.5% for the month because of worries that the slowing US economy could tip into recession. The latest reading for Germany’s
ZEW expectations index on Tuesday and UK inflation on Wednesday also will be in focus. Among individual movers, Hannover Rueck SE shares rose as much as 6.3% after the reinsurer’s earnings beat expectations. In London, BT Group rallied more than 7% after Bharti
Global agreed to buy a stake of about 24.5% in the UK carrier.  Stoxx 600 +0.2%, DAX +0.25%, CAC is flat, FTSE 100 +0.5%. Energy +1%, Basic Resources +0.7%. Healthcare -0.5%, REITs -0.4%.

Shares in Asia were mixed to higher as technology stocks in South Korea and Taiwan extended a rebound from last week’s rout. The MSCI Asia Ex-Japan Index climbed 0.4%, kicking off the
week on a positive note after declining for four straight weeks. Japan was closed for a holiday. Artificial intelligence-related stocks are regaining momentum after a brutal selloff last week that saw an unwinding of some of these crowded trades. Stocks in
Australia and Hong Kong gained, while those in mainland China ended lower. Onshore shares have fallen out of favor, with overseas investors turning net sellers of Chinese stocks for the year. At least four Chinese brokerages have started fresh measures to
cut back trading of domestic government bonds beginning last week amid PBOC warnings on the relentless rally in the debt market amid economic and geopolitical risks, sources said. Adani Group companies lost as much as $19 billion in market value on Monday
but recovered half of the losses after Hindenburg Research accused the head of India’s market regulator of having links to offshore funds also used by Adani. Taiwan +1.4%, Kospi +1.1%, Indonesia +0.56%, Vietnam +0.54%, ASX 200 +0.45%, Hang Seng Index +0.13%.
Sensex -0.05%, CSI 300 -0.2%, Philippines -0.5%, Singapore -0.8%.

FIXED INCOME: 
 

Japan was closed for holiday so US Treasury overnight trading opened during the European session. Treasuries are slightly cheaper across the curve, although yields
remain near to Friday’s closing levels and spreads remain steady. US 10-year yield trades around 3.955%, cheaper by about 1bp on the day. Over the weekend, Fed Governor Michelle Bowman said she still sees upside risks for inflation and continued strength in
the labor market, signaling she may not be ready to support an interest-rate decrease when US central bankers next meet in September.

METALS: 

Gold rose ahead of US economic data due later this week, with traders focused on whether the prints will reinforce bets the Federal Reserve will soon pivot to monetary
easing. Investors are pricing in a 49% chance of a 50 basis points rate cut by the Federal Reserve in September, as per the CME Group’s FedWatch tool. The US producer and consumer prices numbers due on Tuesday and Wednesday will be scanned for further cues. 
Meanwhile, figures for money managers’ net bullish gold bets hit a five-week low, according to weekly data from the Commodity Futures Trading Commission. Copper extended its rebound from the lowest close in five months as orders to withdraw the metal from
London Metal Exchange warehouses suggested China’s demand slump may have bottomed out. Spot gold +0.4%, silver +1.6%.

ENERGY:   

Oil extended its first weekly gain since early July, with traders continuing to monitor Iran’s response to last month’s assassination of a Hamas leader in Tehran.
US oil refiners are cutting run rates this quarter due to weakening demand, adding to concerns that a global crude glut is forming. OPEC trimmed forecasts for global oil demand this year and next as the cartel and its allies prepare to decide on next quarter’s
planned supply increase. WTI +1.1%, Brent +0.9%, US Nat Gas +4.5%, RBOB +1.1%.

CURRENCIES:   

In currency markets, the yen resumed its decline against the dollar after volatile trading last week, while investors weighed the odds of a deep Fed rate cut next
month ahead of a slew of US economic data. Speculative traders sharply pulled back on bets for a weaker yen , according to CFTC data. Economic data this week for Japan includes July PPI on Tuesday and 2Q GDP figures on Thursday. Elsewhere, Barclays expects
a raft of UK economic data this week including jobs, CPI and GDP, will underscore an improving economy and boost the pound. US$ Index +0.05%, GBPUSD -0.01%, EURUSD +0.1%, EURJPY +0.7%, USDJPY +0.6%, AUDUSD +0.4%, USDNOK -0.55%, NZDUSD +0.5%, USDCHF +0.4%.

Spot Bitcoin -1.9%, Spot Ethereum +4.5%.

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
• Allstate (ALL) Raised to Equal-Weight at Wells Fargo; PT $177
• AtkinsRealis (ATRL CN) Raised to Outperform at BMO; PT C$62
• Blend Labs (BLND) Raised to Buy at Canaccord; PT $4.75
• Brown & Brown (BRO) Raised to Overweight at Wells Fargo; PT $112
• Eli Lilly (LLY) Raised to Buy at Deutsche Bank; PT $1,025
• European Residential REIT (ERE-U CN) Raised to Buy at Desjardins; PT C$3.25
• Goldman Sachs BDC (GSBD) Raised to Equal-Weight at Wells Fargo; PT $12
• Lundin Gold (LUG CN) Raised to Buy at Pareto Securities; PT C$28.70
• PAR Technology (PAR) Raised to Buy at Jefferies; PT $60
• PayPal (PYPL) Raised to Buy at President Capital Management; PT $77.80
• Power of Canada (POW CN) Raised to Buy at TD Cowen; PT C$44
• Progressive (PGR) Raised to Buy at HSBC; PT $253
• Prudential Financial (PRU) Raised to Equal-Weight at Wells Fargo
• Robinhood (HOOD) Raised to Overweight at Piper Sandler; PT $23
• Softchoice (SFTC CN) Raised to Outperform at ATB Capital; PT C$23
• Take-Two (TTWO) Raised to Buy at HSBC; PT $179
• Zentalis (ZNTL) Raised to Neutral at Wedbush; PT $4
• Downgrades
• Algonquin Power (AQN CN) Cut to Equal-Weight at Wells Fargo; PT C$8.24
• Bank of Hawaii (BOH) Cut to Underweight at Piper Sandler; PT $61
• Brighthouse Financial (BHF) Cut to Underweight at Wells Fargo; PT $40
• Dream Residential REIT (DRR/U CN) Cut to Market Perform at Raymond James
• EchoStar (SATS) Cut to Underweight at JPMorgan; PT $12
• Hillenbrand (HI) Cut to Neutral at DA Davidson; PT $33
• Iteris (ITI) Cut to Market Perform at Northland; PT $7.20
• Janus Intl (JBI) Cut to Peerperform at Wolfe
• Lion Electric (LEV) Cut to Neutral at DA Davidson; PT $1
• Pacira BioSciences (PCRX) Cut to Sector Perform at RBC; PT $14
• Cut to Market Perform at Raymond James
• Cut to Underweight at JPMorgan; PT $10
• Cut to Neutral at Piper Sandler; PT $11
• Parkit Enterprise (PKT CN) Cut to Market Perform at Raymond James
• Piedmont Lithium (PLL) Cut to Neutral at Macquarie; PT $9.30
• Pilgrim’s Pride (PPC) Cut to Market Perform at BMO; PT $46
• Qualcomm (QCOM) Cut to Peerperform at Wolfe
• Triumph Group (TGI) Cut to Hold at Jefferies; PT $14
• Initiations
• Archer-Daniels-Midland (ADM) Rated New Market Perform at CICC
• Arcturus Therapeutics (ARCT) Rated New Outperform at Leerink; PT $70
• Ardent Health Partners (ARDT) Rated New Overweight at Stephens; PT $24
• Rated New Outperform at Leerink; PT $23
• Rated New Buy at Truist Secs; PT $21
• Rated New Buy at Loop Capital; PT $18
• Rated New Buy at Citi; PT $21
• Rated New Outperform at Mizuho Securities
• Rated New Overweight at Morgan Stanley
• Rated New Neutral at JPMorgan; PT $18
• Rated New Outperform at RBC; PT $23
• Conagra (CAG) Rated New Buy at Goldman; PT $36
• Dave (DAVE) Rated New Buy at Benchmark; PT $53
• Duolingo (DUOL) Rated New Add at Huatai Research; PT $200.27
• First Merchants (FRME) Resumed Market Perform at Hovde Group
• GE Vernova (GEV) Rated New Buy at HSBC; PT $215
• General Mills (GIS) Rated New Buy at Goldman; PT $76
• Hershey (HSY) Rated New Sell at Goldman; PT $185
• J Jill Inc (JILL) Rated New Hold at TD Cowen; PT $37
• Kellanova (K) Rated New Neutral at Goldman; PT $75
• Kraft Heinz (KHC) Rated New Sell at Goldman; PT $34
• LENZ Therapeutics Inc (LENZ) Rated New Buy at HC Wainwright; PT $38
• Mondelez (MDLZ) Rated New Buy at Goldman; PT $80
• Morningstar (MORN) Rated New Outperform at BMO; PT $352
• Solaris Resources (SLS CN) Rated New Buy at HC Wainwright; PT C$13.72
• Summit Therapeutics (SMMT) Reinstated Buy at HC Wainwright; PT $16
• Tempus AI (TEM) Rated New Neutral at Piper Sandler; PT $40
• TWFG (TWFG) Rated New Market Perform at KBW; PT $27
• Rated New Overweight at Piper Sandler; PT $27
• Rated New Overweight at JPMorgan; PT $26.50
• Rated New Equal-Weight at Morgan Stanley; PT $23
• Rated New Outperform at RBC; PT $29
• Rated New Outperform at BMO; PT $30
• USCB Financial (USCB) Rated New Market Perform at Hovde Group; PT $16

Data sources: Bloomberg, Reuters, CQG