Daily Game Plan

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

TODAY’S ECONOMIC DATA:  1:00ET $70B 5-Year Auction; 6:00ET Fed’s Raphael Bostic speaks

HIGHLIGHTS and News:  

• FOOT LOCKER TO MOVE GLOBAL HQ TO FLORIDA FROM NEW YORK CITY
• Russia warns the United States of the risks of World War Three
  
• Trump faces revised US indictment in election subversion case
• The NFL will allow PE firms to own up to 10% of a team, a move expected to attract billions in fresh capital

Global stocks held near record highs as investors await crucial earnings results from Nvidia. MSCI’s gauge of all stocks across the globe gained 0.05%, near a record
high reached earlier this month, as early August’s turmoil receded amid signs policymakers have begun to tame the worst surge in inflation in 40 years. Israel launched a large-scale military operation in the West Bank to combat what the army said was terrorist
activity, the latest sign of escalating hostilities in the Palestinian territory. Russia said the West was playing with fire by considering allowing Ukraine to strike deep into Russia with Western missiles and cautioned the United States on Tuesday that World
War Three would not be confined to Europe.

EQUITIES:  

US equity futures edge lower as Nvidia shares hold a small gain premarket before the world’s most valuable chipmaker delivers its quarterly report after the close. Analysts, on average,
are predicting that the company will project revenue growth of more than 70% for the current quarter. Some are estimating an even larger surge — and investors have bid up the shares in recent weeks on the hope that another blowout quarter is coming. Options
pricing indicate a likely swing of around 9.8% on the report, the largest implied volatility for Nvidia earnings in more than three years, and the largest single-day move on record in terms of market value. Such a move would dwarf the market capitalization
of 95% of S&P 500 constituents, according to LSEG data. Comments on the economic outlook from voting member Fed President Raphael Bostic, due later in the day, will be closely watched.

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.2%, Russell 2000 -0.4%, DJI -0.1%

In pre-market trading, Box (BOX) rises 8% after the software company raised its full-year forecast. Foot Locker (FL) drops 8% as a 2Q same-store sales beat isn’t enough to sustain the
stock’s rally of 46% since the last earnings report on May 30. AeroVironment (AVAV) rises 9% after the defense company won a US Army contract valued at as much as $990 million. Ambarella (AMBA) soars 21% after the semiconductor-device company forecast revenue
for the 3Q that beat. Kohl’s (KSS) rises 3% after the retailer raised its full-year forecasts for EPS and operating margin. nCino (NCNO) slides 12% after the financial-technology company’s 3Qrevenue guidance fell short of expectations. Nordstrom (JWN) gains
3% after the department-store chain improved its comparable-sales forecast for the year and issued a stronger-than-expected outlook. Semtech (SMTC) rises 4% after the semiconductor device company’s second-quarter earnings beat estimates. SentinelOne (S) ticks
higher by 2% after the security software company boosted its full-year revenue guidance.

European gauges are mostly higher and at the highest since mid-July, led by chemical and insurance names, while real estate and basic resources underperform. The Stoxx 600 is now less
than 1% below its May record high but faces tough seasonal trends. The index has declined ~2% on average in September in the past five years, the biggest decline of any month. GSK Plc gained 1.5% as the Delaware Supreme Court decided to review a lower state
court decision related to Zantac litigation. Kingfisher dropped 2% to the bottom of the FTSE 100 after Citigroup downgraded the home improvement retailer’s shares to “neutral” from “buy”.  Stoxx 600 +0.4%, DAX +0.8%, CAC +0.5%, FTSE 100 -0.15%. Chemicals +1.4%,
Insurance +1%, Industrial Goods +1%, Construction +0.9%. Basic Resources -1.1%, Energy -0.7%.

Asian stocks were mostly higher as technology shares gained ahead of Nvidia’s earnings. The MSCI Asia Pacific Index advanced 0.2%, with TSMC and Toyota Motor among the biggest contributors.
Shares in Japan and Taiwan edged higher, while China and Hong Kong benchmarks fell following a slew of disappointing corporate earnings. Australian stocks were steady after a hotter-than-expected inflation print bolstered the case against an RBA interest rate
cut. Taiwan +0.8%, Indonesia +0.8%, Topix +0.4%, Sensex +0.1%, Vietnam +0.05%. Singapore -0.2%, CSI 300 -0.6%, Hang Seng Index -1%.  

FIXED INCOME: 
 

Treasuries are richer across the curve, with US 10-year yields down ~2.5bps at 3.805%. 2-year yield is lower by 5bps at 3.85%. The US session includes $70 billion
5-year note auction, following good demand for Tuesday’s 2-year note sale.

METALS: 

Gold is lower after a three-day rally, weighed by a stronger US dollar. Gold is the world’s second-best-performing asset this year, behind crypto. According to BofA
Global Research, gold funds just absorbed the largest inflows in four weeks, attracting $1.1B. Spot gold -0.8%, silver -1.7%.

ENERGY:   

Oil prices fell on persistent concern over Chinese demand and elevated risks of a broader slowdown, though the decline was capped by potential supply losses from
the Middle East and Libya. Libya’s oil output has almost halved this week — and risks taking close to 1 million barrels a day off the global market — as the country’s fields reduce operations amid a stalemate over who controls the central bank.  US crude stockpiles
fell by 3.4 million barrels last week; API data showed. That would mark the eighth drop in nine weeks if confirmed by the EIA today. WTI -1.8%, Brent -1.5%, US Nat Gas -1.1%, RBOB -1.5%.

CURRENCIES:   

In currency markets, the US$ is rising versus all its G-10 rivals, holding just above its key 200 week moving average. The Aussie$ is lower after Australian inflation
slowed to 3.5% in July, suggesting price pressures began to ease in the current quarter, but not fast enough to warrant early rate cuts. Sterling hovered near a 2-1/2-year high as traders bet that Britain would lag the US in cutting interest rates. Focus today
will be on a speech by Bank of England rate-setter Catherine Mann, who voted to hold rates steady at the last decision. The euro fell for a second day in three as hedge funds unwound short-dated topside options exposure. US$ Index +0.4%, GBPUSD -0.35%, EURUSD
-0.6%, USDJPY +0.3%, AUDUSD -0.2%, USDNOK +0.7%, USDCHF +0.25%.

Spot Bitcoin -3.3%, Spot Ethereum -2.1%.  Bitcoin posted its biggest drop since early August.

• Upgrades
• AeroVironment Inc (AVAV) Raised to Outperform at Baird; PT $220
• Delek Logistics Partners (DKL) Raised to Buy at Citi; PT $45
• EastGroup (EGP) Raised to Overweight at Wells Fargo; PT $214
• Kite Realty (KRG) Raised to Equal-Weight at Wells Fargo; PT $26
• Moderna (MRNA) Raised to Hold at HSBC; PT $82
• Petrobras (PETR4 BZ) ADRs Raised to Outperform at Grupo Santander; PT $20
• Phillips Edison (PECO) Raised to Equal-Weight at Wells Fargo; PT $37
• Downgrades
• Bank of Montreal (BMO CN) Cut to Sector Perform at Scotiabank; PT C$112
• Cut to Hold at TD Cowen; PT C$114
• Bionano Genomics Inc (BNGO) Cut to Sector Perform at Scotiabank; PT $1
• Gannett Co (GCI) Cut to Sell at Citi; PT $5.10
• iQIYI (IQ) ADRs Cut to Neutral at Goldman; PT $2.80
• Semtech (SMTC) Cut to Hold at Summit Insights
• Spire Global (SPIR) Cut to Market Perform at Raymond James
• Terreno Realty (TRNO) Cut to Equal-Weight at Wells Fargo; PT $75
• TransUnion (TRU) Cut to Hold at Needham
• Initiations
• Agilent (A) Rated New Overweight at Wells Fargo; PT $157
• Arcutis Biotherapeutics (ARQT) Rated New Buy at Jefferies; PT $15
• Avantor (AVTR) Rated New Overweight at Wells Fargo; PT $30
• Avidity Biosciences (RNA) Rated New Overweight at Barclays; PT $63
• Bio-Rad (BIO) Rated New Equal-Weight at Wells Fargo; PT $340
• Bruker Corp (BRKR) Reinstated Overweight at Wells Fargo; PT $78
• CareDx (CDNA) Rated New Underweight at Wells Fargo; PT $28
• Century Communities (CCS) US Rated New Neutral at Seaport Global Securities
• CG oncology (CGON) Rated New Buy at Roth Capital Partners; PT $65
• Danaher (DHR) Rated New Equal-Weight at Wells Fargo; PT $280
• Engene Holdings (ENGN) Rated New Outperform at Oppenheimer; PT $30
• Exact Sciences (EXAS) Rated New Overweight at Wells Fargo; PT $75
• Eyepoint (EYPT) Rated New Buy at Jefferies; PT $15
• Fiserv (FI) Rated New Buy at BTIG; PT $200
• Freshpet (FRPT) Reinstated Buy at William O’Neil
• GCT Semiconductor Holding (GCTS) Rated New Buy at B Riley; PT $8
• GeneDx Holdings Corp (WGS) Rated New Equal-Weight at Wells Fargo
• Healthpeak Properties (DOC) Resumed Equal-Weight at Morgan Stanley
• M/I Homes (MHO) Rated New Neutral at Seaport Global Securities
• Maravai (MRVI) Rated New Overweight at Wells Fargo; PT $10
• Mesa Labs (MLAB) Rated New Underweight at Wells Fargo; PT $120
• Mettler-Toledo (MTD) Reinstated Equal-Weight at Wells Fargo; PT $1,400
• Myriad Genetics (MYGN) Rated New Overweight at Wells Fargo; PT $35
• Nanobiotix SA (NANO FP) ADRs Rated New Buy at Guggenheim; PT $12
• Newamsterdam Pharma (NAMS) Rated New Buy at Needham; PT $36
• Quest Diagnostics (DGX) Resumed Inline at Evercore ISI
• Repligen (RGEN) Reinstated Overweight at Wells Fargo; PT $180
• Revvity Inc (RVTY) Rated New Equal-Weight at Wells Fargo; PT $130
• SAB Biotherapeutics (SABS) Rated New Outperform at Oppenheimer; PT $12
• Thermo Fisher (TMO) Reinstated Overweight at Wells Fargo; PT $670
• Tri Pointe Homes (TPH) Rated New Neutral at Seaport Global Securities
• Waters (WAT) Rated New Overweight at Wells Fargo; PT $380

Data sources: Bloomberg, Reuters, CQG