Daily Game Plan

by Contributor
on August 15, 2024

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

TODAY’S ECONOMIC DATA:  ET 8:30 a.m: US July Retail Sales, US Aug. Empire
Manufacturing, US Aug. Philadelphia Fed Business Outlook, US Initial Jobless Claims,US July Import Price Index,9:15 a.m US July Industrial Production,10:30 a.m: EIA Natural Gas Storage Change

HIGHLIGHTS and News:  

  • SEC Fines Firms $393 Million in Latest WhatsApp Probe Cases
  • Starbucks’s new chief Brian Niccol won’t be required to relocate to Seattle when he joins next month.
  • Singapore charged two former bank relationship managers for their alleged involvement in the country’s biggest money-laundering case.

 

 

World stocks advanced on Thursday, with US stock futures climbing on the boost from the previous day’s benign inflation data as positive economic
indicators from Asia added to the upbeat sentiment. Japan’s economy grew faster than expected in the second quarter, aided by a rebound in private consumption, while China’s retail sales beat forecasts in July, helping lift mainland stocks. The in-line US
CPI data reinforced expectations for a Federal Reserve rate cut next month, with the swaps market fully pricing in a 25 basis-point reduction in September and 100 basis points of easing through year-end. Meanwhile, Raphael Bostic told the FT he’s “open” to
a September rate cut, saying the Fed can’t “afford to be late” when it comes to easing. Austan Goolsbee said he’s growing more concerned about the labor market compared with inflation.

 

EQUITIES:  

US futures edged higher, following five consecutive days of gains, with S&P 500 futures buoyed by Wednesday’s inflation data. The latest US inflation data indicated
a gradual cooling of the economy, reinforcing expectations for a 25 basis-point rate cut next month. Notable stock movements included Cisco Systems, which rose 6.1% after exceeding fourth-quarter expectations, and Nike, which increased 4.2% following a disclosure
from Bill Ackman’s Pershing Square Capital Management of a new position. Walmart Inc. surged 7.8% in premarket trading after raising its sales and profit forecasts, expecting to attract bargain hunters. Ulta Beauty shares climbed 14% after Berkshire Hathaway
revealed a new stake, while Titan Machinery fell 28% due to a profit guidance cut amid declining retail demand. Other significant movers included Lumentum, up 16%, and Brinker International, which gained 1% after an upgrade from KeyBanc Capital Markets. Conversely,
Spire Global saw a 19% drop after announcing a late 10-Q filing

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.2%, Russell 2000 -0.1%, DJI +0.3%

European stocks rose for a third consecutive session, driven by positive global economic data and expectations that the Federal Reserve will reduce interest rates next
month. The Stoxx Europe 600 Index edged higher, with insurance and technology shares outperforming, while travel and leisure, as well as retail sectors lagged. Notable movements included a surge in shares of Bavarian Nordic A/S following the World Health Organization’s
declaration of a global public health emergency regarding mpox, and a slump in Orsted A/S due to a significant impairment charge. The market’s recovery comes after a rough start to August, as resilient economic indicators, including easing US inflation and
encouraging data from Japan and China, have calmed recession fears. DAX +0.4%, FTSE +0.01%, Stoxx 600 +0.1%, CAC 40 -0.04%.

Asian stocks advanced for a fifth consecutive day, marking their longest streak of gains in six weeks, as investor sentiment improved following in-line US inflation
data and signs of stabilization in China’s economy. The MSCI Asia Pacific Index rose by 0.4%, with Mitsubishi and Toyota Motor among the top contributors to the rally, while most major markets in the region, particularly New Zealand, China, and Japan, saw
gains, although Thailand and Taiwan experienced declines. The positive sentiment was bolstered by expectations of a Federal Reserve rate cut next month, with Japanese stocks extending their rally due to strong domestic private consumption data. In China, equities
gained as consumer spending picked up and home prices showed a narrower decline, easing concerns about economic recovery. The CSI 300 Index rose 1%, marking its most significant increase in two weeks, while the Hang Seng China Enterprises Index closed slightly
higher after erasing earlier losses. Overall, the data indicated early signs of stabilization in retail sales and home prices, contributing to a more optimistic outlook for the region’s markets. Topix +0.7%, Nikkei +0.8%, China’s CSI 300 +0.9%; Hang Seng -0.02%;
Kospi +0.8%; ASX 200 +0.2%.

FIXED INCOME: 
 

Treasuries remained steady overnight as investors awaited a busy slate of US economic data, including weekly jobless claims and retail sales, which
will help assess the likelihood of a half- or quarter-point easing move from the Federal Reserve at its September policy meeting. Treasury yields were narrowly mixed, with the US 10-year yield hovering around 3.83%, while UK gilts lagged following domestic
data releases, including GDP and industrial production.

 

METALS: 

Gold prices rebounded after a decline on Wednesday, as the latest US inflation data provided little clarity on the Federal Reserve’s potential rate-cutting strategy.
Elsewhere, Iron ore hit the lowest level since 2022 on concern that global supply is running ahead of demand, with China’s steelmakers mired in a crisis and cutting output just as major miners boost exports. Gold +0.4%, Silver +1.9%, Iron Ore -2.02%.

 

 

 

ENERGY:   

 

Oil prices edged higher after a two-day decline, as concerns over a potential Iranian attack on Israel overshadowed disappointing data indicating
an 8% drop in China’s apparent oil demand for July. The tensions arise after Iran’s vow to retaliate for the killing of a senior Hamas leader, with analysts suggesting that current market fundamentals indicate OPEC+ is unlikely to increase production in the
fourth quarter. Additionally, U.S. crude inventories unexpectedly rose by 1.36 million barrels last week, marking the first increase in seven weeks, which could further heighten concerns about declining demand. WTI +0.9%, Brent +0.8%, Nat Gas +1.5%.

 

CURRENCIES:   

In currency markets, Australia’s dollar rose the most among major currencies, buoyed by better-than-expected employment data, while the US dollar remained near a four-month
low. The dollar index slightly dipped as underlying US inflation eased in July, keeping the Federal Reserve on track to lower interest rates next month. AUDUSD climbed as traders adjusted their expectations for Reserve Bank of Australia rate cuts following
a jobs growth figure that exceeded all forecasts. Money markets now anticipate the start of the RBA’s easing cycle in December. US$ Index flat, GBPUSD -0.1%, EURUSD +0.2%, USDJPY +0.1%, AUDUSD +0.4%, NZDUSD +0.2%, USDCHF -0.1%.

 

 

Spot Bitcoin -0.7%, Spot Ethereum -1.5%.

 

 

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
  • Downgrades
    • Bluebird
      Bio       (BLUE) Cut to Neutral at JPMorgan
    • Cardlytics (CDLX)
      Cut to Underperform at BofA; PT $3.50
    • CNX
      Resources       (CNX) Cut to Underweight at Piper Sandler; PT $20
    • Comstock
      Resources       (CRK) Cut to Underweight at Piper Sandler; PT $5
    • EQT
      Corp       (EQT) Cut to Neutral at Piper Sandler; PT $32
    • European
      Wax       (EWCZ) Cut to Neutral at Citi; PT $5.50
    • Goosehead
      Insurance       (GSHD) Cut to Hold at TD Cowen; PT $94
    • Hydro
      One       (H CN) Cut to Market Perform at BMO; PT C$42
    • Kellanova (K)
      Cut to Sector Perform at RBC; PT $83.50
    • LifeSpeak (LSPK
      CN) Cut to Underperform at RBC; PT 25 Canadian cents
    • M&T
      Bank       (MTB) Cut to Underweight at Wells Fargo; PT $165
    • Movano (MOVE)
      Cut to Speculative Buy at Benchmark; PT $2
    • Murphy
      Oil       (MUR) Cut to Neutral at JPMorgan
    • Nano
      One Materials       (NANO CN) Cut to Hold at TD Cowen; PT 90 Canadian cents
    • Range
      Resources       (RRC) Cut to Neutral at Piper Sandler; PT $31
    • ScanSource (SCSC)
      Cut to Market Perform at Raymond James
    • Snowflake (SNOW)
      Cut to Equal-Weight at Wells Fargo; PT $130
    • Superior
      Plus       (SPB CN) Cut to Neutral at CIBC; PT C$10
    • Vicinity
      Motor Corp       (VMC CN) Cut to Neutral at Alliance Global Partners
  • Initiations
    • Dollarama (DOL
      CN) Reinstated Buy at William O’Neil
    • Montage
      Gold       (MAU CN) Rated New Outperform at BMO; PT C$2.50
    • Tyra
      Biosciences       (TYRA) Rated New Overweight at Piper Sandler; PT $33
    • Valvoline (VVV)
      Rated New Outperform at Baird; PT $48
    • Vaxart (VXRT)
      Rated New Outperform at Oppenheimer; PT $4

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

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