Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET GDP Price Index, Core PCE*, Advance Goods Trade Balance, Inventories, Initial Jobless
Claims; 10:00ET Pending Home Sales; 1:00ET 7-Year Note Auction 3:30ET Fed’s Raphael Bostic speaks

HIGHLIGHTS and News:  

• Harris and Tim Walz will have their first campaign interview tonight, with CNN
• OpenAI is close to raising funding at a valuation of more than $100B
• Biden administration expands solar energy development on federal lands

Global markets gained as investors weighed Nvidia’s underwhelming sales forecast against evidence that artificial intelligence is still delivering blockbuster earnings.
Meanwhile, the Netherlands plans to limit ASML Holding NV’s ability to repair and maintain its semiconductor equipment in China, a potentially painful blow to Beijing’s efforts to develop a world-class chip industry. Spanish inflation eased to its lowest level
in a year in August at 2.4%. Swedish GDP contracted less than expected in the second quarter. US National Security Adviser Jake Sullivan is wrapping up three days of talks in Beijing intended to ease simmering tensions.

EQUITIES:  

US equity futures are higher as investors moved past the fallout from Nvidia’s earnings. Nvidia, which had tumbled sharply after the close Wednesday, was down only 2% after delivering
an underwhelming forecast and news of production snags with its much-awaited Blackwell chips. Expectations on the stock have been lofty after its string of blowout results, and the company met or beat analysts’ estimates on nearly every measure. Other technology
shares rose, with Apple climbing more than 1%. Software firm Salesforce climbed as results topped forecasts. With the earnings season nearing an end, the focus is turning back to the macro landscape. The Fed’s preferred inflation gauge may firm up bets on
how much and how quickly the central bank will ease policy, with the core PCE readings due Friday. 

Futures ahead of the bell: E-Mini S&P +0.25%, Nasdaq +0.25%, Russell 2000 +0.4%, DJI +0.6%

In pre-market trading, Nvidia (NVDA) falls 4% after the company failed to live up to investor hopes with its latest results.  Affirm Holdings (AFRM) soars 21% after the financial technology
company’s 1Q revenue forecast came in ahead of estimates. Best Buy (BBY) rises 7% after the company raised its annual profit guidance. Birkenstock (BIRK) falls 13% after the sandal maker reported 3Q revenue that just missed estimates. CrowdStrike (CRWD) slips
2% after the security software company cut its full-year forecast. Dollar General (DG) falls 23% after the company cut its full-year sales forecast. ILearningEngines (AILE) sinks 42% after Hindenburg Research said it is short the stock. Nutanix (NTNX) gains
17% after the company gave a full-year revenue forecast that came in stronger than expected. Okta (OKTA) drops 13% after some of the application software company’s outlook disappointed. Salesforce (CRM) rises 5% after the maker of customer management software
reported 2Q results that beat expectations. Topgolf Callaway Brands (MODG) declines 3% after Jefferies downgraded the golf equipment company to hold. Pure Storage (PSTG) shares are down 14% after the cloud storage provider gave a third-quarter outlook that
was weaker than expected. TD Cowen lowered the firm’s price target on Pure Storage to $70 from $80 and keeps a Buy rating on the shares. American Eagle Outfitter (AEO) falls over 4% after revenue misses estimates.  

European gauges are higher as sentiment was boosted by Spanish inflation figures that reinforced expectations for a European Central Bank rate cut in September. The Euro Stoxx 600 is
notching a third day of gains, while Germany’s DAX Index hit a new record high. Earnings also bolstered the optimistic mood. Pernod Ricard rose after the premium spirits maker’s fourth-quarter earnings broadly met expectations. Delivery Hero gained after its
results beat. Universal Music Group NV was another top gainer following an analyst upgrade. Strategists at Amundi Investment Institute, said they prefer European equities to the US on valuations, and see some tactical value in Japan as well. Stoxx 600 +0.7%,
DAX +0.7%, CAC +0.7%, FTSE 100 +0.4%. Technology +1.7%, Media +1.1%, Chemicals +0.9%. REITs -0.2%. 

Asian stocks were mixed to lower, with the MSCI Asia Pacific Index dropping as much as 0.6% before paring losses to -0.2%. TSMC, Samsung Electronics and SK Hynix among the biggest drags
on the index. Asian chip shares declined as Nvidia’s less-than-outstanding outlook cooled investor sentiment on the AI trade.  Chinese shares were mixed, with a gauge of tech stocks traded in Hong Kong recouping some of the previous session’s losses, while
the onshore CSI 300 Index edged lower. Shares of Chinese electric vehicle markers fell after Li Auto reported earnings that missed expectations. Kospi -1%, Philippines -1%, Taiwan -0.75%, Indonesia -0.4%, CSI 300 -0.3%. CSI 1000 +1.6%, Hang Seng Index +0.5%,
Hang Seng Tech +0.5%, Sensex +0.4%, Singapore +0.4%, Topix +0.03%.

FIXED INCOME: 
 

Treasuries edged higher across the curve following another narrow overnight trading range, keeping most yields within 1bp of Wednesday’s closing levels. The Fed’s
Raphael Bostic said it “may be time” to cut interest rates but he’s still looking for additional data to support a move next month. MoF data shows that Japanese investors have been larger buyers of foreign bonds in August, at the fasted pace since 2007. The
US session includes revision to 2Q GDP data and initial jobless claims, and this week’s auctions conclude with $44 billion 7-year offering following good demand for 2- and 5-year notes. US 10-year trades around 3.83%; 2-year yield at 3.86%

METALS: 

Gold ticks higher on expectations that the Federal Reserve might begin interest rate cuts next month, and underpinned by ongoing tensions in the Middle East, while
a slew of US economic data remained on investors’ radar. The PCE price index, the Fed’s preferred measure of inflation, is due on Friday.  Spot gold +0.7%, silver +1.4%, copper -0.25%.

ENERGY:   

Oil prices steadied after two straight days of declines as concerns about demand from China and the US countered supply disruptions out of Libya. Brent is on track
for a small decline this month, even after repeated drops in US stockpiles, heightened tensions in the Middle East and a more than halving of Libya’s oil output. The Libya situation complicates plans by OPEC+ to begin unwinding some production cuts in October.
WTI +0.4%, Brent +0.3%, US Nat Gas -0.7%, RBOB +0.2%.

CURRENCIES:   

In currency markets, the dollar was steady but set for its biggest monthly decline this year, undermined by the rate-cut expectations. The euro reversed a modest
advance to fall to its lowest versus the dollar in over a week after data showed German regional inflation slowed in August. New Zealand’s dollar strengthened due to improved business confidence. The yen recovered from an early weakness after the Japanese
government upgraded its monthly economic assessment for the first time in 15 months, citing signs of a recovery in consumption. US$ Index +0.1%, GBPUSD +0.03%, EURUSD -0.2%, USDJPY ~flat, AUDUSD +0.5%, USDNOK -0.2%, USDCHF +0.2%, NZDUSD +0.5%.

Spot Bitcoin %, Spot Ethereum %.  

• Upgrades
• Bank of Montreal (BMO CN) Raised to Reduce at Veritas Investment Research Co
• Eni (ENI IM) ADRs Raised to Overweight at Morgan Stanley; PT $39.60
• Foot Locker (FL) Raised to Overweight at Barclays; PT $34
• Marriott Intl (MAR) Raised to Outperform at Bernstein
• Neurocrine Bio (NBIX) Raised to Overweight at Piper Sandler; PT $159
• Downgrades
• Cava Group (CAVA) Cut to Equal-Weight at Morgan Stanley; PT $110
• Ecopetrol (ECOPETL CB) ADRs Cut to Underperform at Grupo Santander; PT $10.20
• Equinor (EQNR NO) ADRs Cut to Underweight at Morgan Stanley; PT $25.80
• National Bank of Canada (NA CN) Cut to Reduce at Veritas Investment Research Co; PT C$118
• Parex Resources (PXT CN) Cut to Sector Perform at RBC; PT C$17
• Topgolf Callaway Brands (MODG) Cut to Hold at Jefferies; PT $12
• Initiations
• Amer Sports (AS) Rated New Buy at ABC International; PT $18.60
• Ardent Health Partners (ARDT) Rated New Buy at William O’Neil
• Enphase Energy (ENPH) Rated New Market Perform at William Blair
• First Solar (FSLR) Rated New Market Perform at William Blair
• Firstsun Capital (FSUN) Rated New Market Perform at Raymond James
• Forsys Metals (FSY CN) Rated New Buy at Paradigm Capital; PT C$1.75
• GE Vernova (GEV) Rated New Outperform at William Blair
• Patrick Industries (PATK) Rated New Buy at Benchmark; PT $145
• SolarEdge (SEDG) Rated New Market Perform at William Blair
• Stellantis (STLA) Rated New Hold at LBBW
• Take-Two (TTWO) Rated New Buy at Redburn; PT $194
• Tesla (TSLA) Rated New Outperform at William Blair

Data sources: Bloomberg, Reuters, CQG