Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Empire Manufacturing (-4.0 is expected)

EMPIRE MANUFACTURING BEATS AT 11.5 VS -4.0 ESTIMATE

HIGHLIGHTS and News:  

• TRUMP-LINKED CRYPTO PROJECT TO LAUNCH TODAY
• Suspect is in custody after an apparent second assassination attempt on Donald Trump
• TRADERS SEE 50BP SEPTEMBER FED RATE CUT LIKELIER THAN 25BP
  

Global stocks were muted in a week that is almost certain to see the start of an easing cycle in the United States, with many investors leaning towards a bigger-than-expected
rate cut. Central banks in the UK, Brazil, Australia, Taiwan, Norway, South Africa and Japan also meet this week. Geopolitics loomed large with Republican presidential candidate Donald Trump the subject of a second assassination attempt on Sunday, according
to the FBI. Economic data from China over the weekend showed industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further. The figures helped boost expectations of more stimulus from the PBOC before
year-end, adding to tailwinds from an expected Fed rate cut that might bring in larger emerging market flows. A slew of public holidays across Asia kept equity market activity subdued.     

EQUITIES:  

US equity futures are mixed after the S&P 500 saw its strongest weekly performance this year last week while investors await the Fed’s policy decision on Wednesday. Futures markets show
traders are placing a 60% chance of a half-point cut, up from 30% a week ago. Articles in the FT and WSJ are making the case for a 50bps rate cut this week by the Fed on Wednesday. The S&P 500 has mostly bounced back from its summer selloff, but the recovery
isn’t being led by Big Tech — instead, traders have been rotating into sectors like real estate, utilities and consumer staples amid fears of sputtering economic growth. 

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.45%, Russell 2000 +0.4%, DJI +0.25%

In pre-market trading, Apple (AAPL) shares fell 2.5% following a trio of reports that suggest early demand for its new iPhone 16s is falling behind last year’s levels. Intel (INTC) rose
1% as the chipmaker officially qualified for as much as $3.5 billion in federal grants to make semiconductors for the Pentagon. Colgate-Palmolive (CL) dropped 1.5% after Wells Fargo downgraded the stock to underweight from equal-weight. Exact Sciences (EXAS)
shares rise 11% after the diagnostics company released performance data from a study of its blood-based colon cancer screening test candidate. Nuvalent (NUVL) shares jump 16% after the drug developer presented updated data from two early-stage trials of its
lead cancer programs. Stratasys (SSYS) shares rise 6.0% after the three-dimensional printer maker’s board authorized a $50 million share repurchase program. Trump Media (DJT US) rises 1.3%, with the stock set to extend Friday’s gains, after Donald Trump said
he has “absolutely no intention of selling” his stake when a lockup period expires later this week.

European gauges are little changed as investors looked ahead to interest rate decisions from the Federal Reserve and the Bank of England.  The Stoxx Europe 600 Index was flat as retail
and healthcare stocks outperform, while auto and technology sectors declined. Among individual movers, France’s Rexel jumped over 9% after the Paris-listed group rebuffed a $9.4 billion acquisition offer from billionaire Brad Jacobs-led QXO. UniCredit climbed
following CEO Andrea Orcel’s comments that a merger with Commerzbank could add value for all stakeholders and create a stronger bank. Nestle shares weighed after Morgan Stanley cut the stock’s rating to underweight and reduced its target price. Phoenix Group
slid over 3% after the British insurer halted the sale process of its SunLife business due to market uncertainty. Stoxx +0.05%, DAX -0.2%, CAC ~flat, FTSE 100 ~flat. Healthcare +0.5%, Retail +0.5%, Financial Services +0.4%. Autos -0.7%, Technology -0.6%, Basic
Resources -0.4%.

Shares in Asia were higher with the MSCI Asia Pacific Index climbing 0.5%. Japan, Korea and China markets were closed for a holiday. In China, data published over the weekend showed industrial
output recording its longest slowing streak since 2021, while consumption and investment were weaker than expected. Goldman, Citi and Morgan Stanley lowered their 2024 GDP forecasts for China.  Shares of Chinese e-commerce platforms including Alibaba and JD.com
fell in Hong Kong, after the US announced fresh curbs that may impact foreign exports to the US. Shanghai suspended railways and canceled flights as it was hit by the biggest typhoon in more than seven decades. Hundreds of thousands of residents in the region
were evacuated. Philippines +1.15%, Thailand +0.8%, Taiwan +0.4%, Hang Seng Index +0.3%, ASX 200 +0.3%, Sensex +0.1%. Vietnam -1%.  

FIXED INCOME: 
 

Treasuries bull-steepen as markets see higher odds that Wednesday’s Fed decision will be a half-point rather than a quarter-point rate cut.  Two-year Treasury yields
fell 3bps to the lowest since September 2022. 10-year around 3.64%; 2-year yield ~3.55%; 2s10s spread +2bps. Corporate new-issue volume stands to be heavy Monday as borrowers aim to complete offerings ahead of the Fed decision. This week’s Treasury coupon
supply includes $13b 20-year bond reopening Tuesday and $17b 10-year TIPS reopening on Thursday.

METALS: 

Gold rose to a record as markets waited for the Federal Reserve to begin easing monetary policy for the first time in more than four years. Bullion climbed as much
as 0.4% to a high of $2,589.03 an ounce, extending last week’s 3.2% gain, ahead of the Fed’s Sept. 17-18 meeting that’s widely expected to result in a rate cut of at least 25 basis points. Spot gold +0.2%, silver +0.6%, copper +0.4%.

ENERGY:   

Oil prices rose, shaking off another round of lackluster data from China as nearly a fifth of crude oil production in the Gulf of Mexico remained offline. Crude traders
downgraded their demand expectations by nearly 1 million b/d over the next six months, Goldman Sachs said. The bank’s base case sees Brent recovering to $77 in the fourth quarter. UBS cut its oil price forecasts for 2024, citing a weaker global demand outlook
especially driven by a slowing Chinese economy. It lowered its price view for both Brent and WTI by $4 to $80 per barrel and $76 per barrel.  WTI +0.8%, Brent +0.7%, US Nat Gas -0.5%, RBOB +0.9%

CURRENCIES:   

In currency markets, the dollar starts the week in defensive mode, falling against all Group-of-10 peers as traders position for the Federal Reserve to cut interest
rates on Wednesday. The Japanese yen and Norwegian krone are the best performers among the G-10 currencies, with the yen strengthening beyond 140 per dollar for the first time since 2023. USDJPY drops a fifth straight day amid expectations the Bank of Japan
will provide a hawkish hold this week. USDNOK drops a third day as oil prices rebound. US$ Index -0.5%, GBPUSD +0.55%, EURUSD +0.45%, USDJPY -0.65%, AUDUSD +0.6%, USDNOK -0.65%, USDCHF-0.6 %.

Spot Bitcoin -1.8%, Spot Ethereum -2.3%.  A crypto project backed by Donald Trump and his two eldest sons is set to launch this evening.  

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
• Acrivon Therapeutics (ACRV) Raised to Buy at Ladenburg Thalmann; PT $16
• Ameren (AEE) Raised to Outperform at Mizuho Securities; PT $89
• BioNTech (BNTX) ADRs Raised to Neutral at JPMorgan; PT $125
• Builders FirstSource (BLDR) Raised to Buy at Truist Secs; PT $220
• Chart Industries (GTLS) Raised to Overweight at Morgan Stanley; PT $175
• Community Healthcare Trust (CHCT) Raised to Inline at Evercore ISI
• Compass Therapeutics (CMPX) Raised to Buy at Ladenburg Thalmann; PT $5
• Delek US Holdings (DK) Raised to Neutral at Mizuho Securities; PT $26
• EastGroup (EGP) Raised to Outperform at Evercore ISI; PT $204
• Entegris (ENTG) Raised to Buy at Citi; PT $130
• Kinder Morgan (KMI) Raised to Equal-Weight at Morgan Stanley; PT $24
• Oneok (OKE) Raised to Overweight at Morgan Stanley; PT $111
• Oracle (ORCL) Raised to Buy at Melius; PT $210
• Russel Metals (RUS CN) Raised to Buy at TD Cowen; PT C$46
• Simon Property (SPG) Raised to Outperform at Evercore ISI; PT $172
• SL Green (SLG) Raised to Inline at Evercore ISI; PT $66
• Sprouts Farmers (SFM) Raised to Outperform at Evercore ISI
• Zillow (ZG) Raised to Outperform at Wedbush; PT $80
• Downgrades
• Ally Financial (ALLY) Cut to Neutral at BTIG
• Colgate-Palmolive (CL) Cut to Underweight at Wells Fargo; PT $100
• EnLink Midstream (ENLC) Cut to Equal-Weight at Morgan Stanley; PT $16
• Kinsale Capital (KNSL) Cut to Peerperform at Wolfe
• MKS Instruments (MKSI) Cut to Neutral at Citi; PT $120
• Nestle (NESN SW) ADRs Cut to Underweight at Morgan Stanley; PT $99
• Nova (NVMI) Cut to Neutral at Citi; PT $224
• Regency Centers (REG) Cut to Inline at Evercore ISI; PT $75
• Revance Therapeutics (RVNC) Cut to Equal-Weight at Barclays; PT $7
• Southern Co (SO) Cut to Neutral at Mizuho Securities; PT $90
• Sun Communities (SUI) Cut to Inline at Evercore ISI; PT $149
• Synchrony Financial (SYF) Cut to Neutral at BTIG
• Western Midstream Partners (WES) Cut to Equal-Weight at Morgan Stanley
• World Kinect Corp (WKC) Cut to Underweight at Morgan Stanley; PT $28
• Initiations
• ARM Holdings (ARM) ADRs Rated New Hold at Benchmark
• ADRs Rated New Overweight at Guotai Junan Sec
• Better Choice Co Inc (BTTR) Rated New Buy at ThinkEquity; PT $10
• Biodesix (BDSX) Rated New Sector Outperform at Scotiabank; PT $3
• Biohaven (BHVN) Rated New Buy at Jefferies; PT $57
• Coya Therapeutics (COYA) Rated New Buy at HC Wainwright; PT $18
• Eaton Corp (ETN) Rated New Buy at Citi; PT $348
• Evry (EVRY NO) TriSalus Life Sciences Rated New Outperform at Oppenheimer
• GE Vernova (GEV) Rated New Overweight at Barclays; PT $250
• Oruka Therapeutics Inc (ORKA) Rated New Buy at TD Cowen
• Powell Industries (POWL) Rated New Outperform at Haitong Intl
• Yelp (YELP) Rated New Underperform at BofA; PT $30

Data sources: Bloomberg, Reuters, CQG

David Wienke