Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET GDP, Durable Goods Orders, Cap Goods Orders, Jobless Claims; 9:10ET Fed’s Collins
and Kugler speak; 9:15ET Fed’s Bowman speaks; 9:20ET Fed’s Powell speaks (pre-recorded); 9:25ET Fed’s Williams speaks; 10:30 a.m.: Fed’s Barr speaks, Fed’s Cook speaks; 1:00ET Fed’s Kashkari and Barr speak, 7-Year Auction; 10:00ET Pending Home Sales; 11:00ET
Kansas City Fed Manufacturing Activity; 6:00ET Fed’s Cook speaks  

HIGHLIGHTS and News:  

• Americans’ assessment of current economic conditions have hit the lowest level since 2020
• Israel Rejects Cease-Fire Talks and Keeps Up Lebanon Attacks
• Hurricane Helene barrels toward Florida with fierce winds up to 156 mph
• Over 40 million people in Florida, Georgia and Alabama are under hurricane/tropical storm warnings
• China Stocks Head for Best Week in a Decade
  

World shares jumped, driven by news of aggressive economic stimulus from China and a fall in oil prices on a report that Saudi Arabia is preparing to abandon its
unofficial price target of $100 a barrel. Global chip stocks rallied after US memory semiconductor maker Micron posted revenue guidance that topped expectations. China’s politburo said that China would deploy “necessary fiscal spending” to meet this year’s
economic growth target of roughly 5%, raising market expectations for fresh stimulus on top of measures announced this week. Elsewhere, Israel rejected proposals for a ceasefire with Hezbollah after the United States and France called for a 21-day halt in
fighting. The Israeli prime minister lands in New York today to face the UN.         

EQUITIES:  

US equity futures rose as a wave of optimism around artificial intelligence gripped markets following Micron’s upbeat forecast, while investors also awaited economic data and a raft of
speeches from Federal Reserve policymakers, including remarks from Chair Jerome Powell before the open. Micron Technology jumped over 15% post-market after forecasting higher than expected first-quarter revenue and said that demand for memory chips used in
AI computing was robust. Meta led gains among other growth names, a day after unveiling an entry-level version of its Quest line of mixed-reality headsets. Copper and lithium miners rose pre-market after a report said China plans to issue special sovereign
bonds worth about 2 trillion yuan as part of a fresh fiscal stimulus. US lawmakers averted a government shutdown and quickly passed a short-term federal funding bill to keep operating through Dec. 20, which Joe Biden is expected to sign.

Futures ahead of the bell: E-Mini S&P +0.75%, Nasdaq +1.5%, Russell 2000 +1%, DJI +0.4% 

In pre-market trading, Micron Technology (MU) gains 16% after giving surprisingly strong sales and profit forecasts, helped by demand for artificial intelligence gear.
Meta Platforms (META) gains 1.9% with analysts positive on the Facebook parent’s outlook in the wake of its Connect conference, which was seen as showing progress in its AI initiatives. Accenture (ACN) climbs 3% after the IT services company reported its fourth-quarter
results. New York Community Bancorp (NYCB) rises 3% as Barclays raised its rating to overweight. Sonos (SONO) slips 6% as Morgan Stanley double downgraded the stock to underweight, saying that the speaker company’s app redesign will impact the top and bottom
line. Southwest Airlines (LUV) gains 3% after authorizing a new $2.5 billion stock buyback program and providing detailed plans to revamp customer-facing policies. Starbucks (SBUX) rises 2% following an upgrade to outperform from Bernstein, which says market
optimism since the appointment of a new chief executive officer is fully warranted.

Tesla would likely see upside momentum relative to the consumer discretionary sector ETF with a breakout above the descending trend line in TSLA vs XLY.

European gauges pushed past a recent closing high as fresh investor optimism over Chinese stimulus spurred a rebound in sectors exposed to the world’s second-biggest economy.  The Stoxx
Europe 600 Index is holding early solid gains and is on track to end the session at its highest close on record. Luxury goods firms, mining stocks and automakers, along with technology, led gains. Energy stocks also slid, tracking a drop in crude oil. While
the developments in China supported overall sentiment, some company updates spurred sizable downward moves among individual stocks. Hennes & Mauritz AB slumped as much as 8.6% after the fast-fashion retailer said it’s unlikely to hit its operating margin target
for the year. Ubisoft Entertainment SA dropped as much as 20% after cutting its targets as it delayed its next Assassin’s Creed video game. Stoxx 600 +1%, DAX +1.2%, CAC +1.6%, FTSE 100 +0.2%. Luxury +5.7%, Basic Resources +4.2%, Technology +3.5%, Personal
Goods +3.5%. Energy -3.5%.

Shares in Asia surged amid renewed enthusiasm in the tech sector and further policy support from China. The MSCI Asia Pacific Index rose 2.1%, with chipmakers the top contributors following
Micron Technology’s surprisingly strong forecast. Chinese shares are headed for their biggest weekly gain in almost a decade after China’s top leaders delivered a forceful pledge to increase fiscal support and stabilize the property sector to revive growth.
The CSI 300 Index was at the top of the leaderboard, led by consumer stocks after China said it will give one-off cash handouts to people in extreme poverty before a weeklong holiday, while financial stocks were supported by news of a possible capital injection
into state banks. An index of mainland Chinese property stocks rose 15%. The recent rally puts the benchmark on course to halt an unprecedented three-year losing streak. Hang Seng Tech +7.3%, CSI 300 +4.2%, Hang Seng Index +4.2%, Kospi +2.9%, Nikkei 225 +2.8%,
Philippines +1.3%, ASX 200 +0.95%, Sensex +0.8%. Singapore was flat and Thailand slipped 0.4%.

FIXED INCOME: 
 

Treasuries are slightly richer across the curve with 10-year yield lower by around 2bp vs Wednesday’s close at 3.765%. Focal points of US session include jobless
claims and 2Q GDP revision, $44 billion 7-year note auction and packed slate of Fed speakers, several at regulators’ annual US Treasury Market Conference. Today’s 7-year note sale follows 2- and 5-year note auctions this week that stopped on the screws and
drew solid demand.

METALS: 

Gold rose to record highs as investors considered the Federal Reserve’s rate-cut path ahead of a speech by Chair Jerome Powell and upcoming inflation-linked data.
Indian gold demand looks set for a strong few months as a cut to the import tax and a buoyant festival and wedding season drive purchases. Imports more than tripled to 140 tons in August from July. Spot gold +1%, silver +2.7%, copper 2.3%.

ENERGY:   

Oil prices fell for a second day as Saudi Arabia was reported to be committed to increasing output in December, while factions in Libya reached a deal that could
open the way to the return of some crude production. While oil traders had largely shrugged off China’s earlier monetary stimulus measures, President Xi Jinping on Thursday called for the government to provide more fiscal spending, underscoring the growing
anxiety in Beijing over the nation’s slowing growth. Florida braced for the arrival of Hurricane Helene today, forecast to be a powerful Category 4 storm when it smashes into the state’s panhandle.  Officials issued dire warnings, pleading with residents in
coastal areas along the hurricane’s path to evacuate. “This is not a survivable event for those in coastal or low- lying areas,” said the sheriff of Wakulla County, where Helene is forecast to make landfall. It is forecast to make landfall in Florida’s panhandle
this evening, packing sustained wind speeds of up to 156 miles per hour. NOAA warned of life-threatening flooding inland.  WTI -3%, Brent -2.8%, US Nat Gas +1%, RBOB -2%

CURRENCIES:   

In currency markets, the dollar weakened against its Group-of-10 peers as investors awaited remarks from Fed Chair Jay Powell. Meanwhile, the Australian dollar rose
alongside the yuan following news of potential $142 billion capital injections into China’s largest banks to bolster their economy. The New Zealand dollar drew additional support from the latest news out of China. The SNB cut rates by 25 bps at a third straight
meeting and warned of more easing to come if needed to contain the strength of the franc. US$ Index -0.05%, GBPUSD +0.4%, EURUSD +0.2%, USDJPY -0.4%, AUDUSD +0.9%, NZDUSD +0.7%, USDCHF -0.3%.

Spot Bitcoin +1.5%, Spot Ethereum %.   PayPal Says Enabling Its U.S. Merchants To Buy, Hold And Sell Cryptocurrency Directly From Their PayPal Business Account; At
Launch, This Functionality For Business Accounts Will Not Be Available In New York State.

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
• Bilibili (BILI) ADRs Raised to Buy at Goldman; PT $22.60
• Celldex (CLDX) Raised to Overweight at Wells Fargo; PT $44
• New York Community Bancorp (NYCB) Raised to Overweight at Barclays
• Pediatrix Medical (MD) Raised to Buy at Jefferies; PT $14
• Starbucks (SBUX) Raised to Outperform at Bernstein; PT $115
• Downgrades
• Ameriprise (AMP) Cut to Neutral at Goldman; PT $476
• Frontline PLC (FRO) Cut to Sell at SEB Equities; PT $18.92
• GE Healthcare (GEHC) Cut to Sell at UBS; PT $74
• Global Payments (GPN) Cut to Hold at CFRA
• Hershey (HSY) Cut to Underperform at Jefferies
• Nordstrom (JWN) Cut to Sector Weight at KeyBanc
• Northern Trust (NTRS) Cut to Sell at Goldman; PT $82
• Park Hotels (PK) Cut to Peerperform at Wolfe
• Patria Investments (PAX) Cut to Neutral at Banco BTG Pactual; PT $13
• Regency Centers (REG) Cut to Hold at Deutsche Bank
• ReNew Energy (RNW) Cut to Equal-Weight at Morgan Stanley; PT $7.31
• RLJ Lodging (RLJ) Cut to Peerperform at Wolfe
• Sonos (SONO) Cut to Underweight at Morgan Stanley; PT $11
• Travel + Leisure Co (TNL) Travel + Leisure Co Cut to Underweight at Barclays; PT $40
• Zedcor Inc (ZDC CN) Cut to Hold at Paradigm Capital; PT C$2.20
• Initiations
• Advanced Energy (AEIS) Rated New Hold at Baptista Research; PT $115.80
• Alaska Air (ALK) Rated New Buy at Baptista Research; PT $52
• Badger Meter (BMI) Rated New Underperform at Baptista Research
• Cboe (CBOE) Rated New Hold at TD Cowen; PT $205
• ChampionX (CHX) Rated New Buy at Baptista Research; PT $42.60
• CME Group (CME) Rated New Hold at TD Cowen; PT $221
• Crane Co. (CR) Rated New Hold at Baptista Research; PT $169
• Denison Mines (DML CN) Rated New Outperform at CIBC; PT C$3.25
• Descartes Systems (DSG CN) Rated New Outperform at National Bank; PT $125
• EnerSys (ENS) Rated New Outperform at Baptista Research; PT $118.80
• First Solar (FSLR) Rated New Buy at Truist Secs; PT $300
• Franklin Electric (FELE) Rated New Hold at Baptista Research; PT $111
• GE Vernova (GEV) Rated New Market Perform at Oppenheimer
• Rated New Buy at Truist Secs; PT $300
• Ichor (ICHR) Reinstated Buy at DA Davidson; PT $50
• InfuSystem Holdings (INFU) Rated New Buy at B Riley; PT $13
• Intercontinental Exchange (ICE) Rated New Buy at TD Cowen; PT $182
• Ivanhoe Electric/US (IE) Rated New Buy at Eight Capital; PT $18
• Magnolia Oil & Gas (MGY) Rated New Hold at Baptista Research
• Matson (MATX) Rated New Hold at Baptista Research; PT $149.50
• Mirion Technologies (MIR) Rated New Buy at B Riley; PT $14
• Nasdaq Inc. (NDAQ) Reinstated Hold at TD Cowen; PT $83
• Schneider National (SNDR) Rated New Hold at Baptista Research; PT $30
• Solventum (SOLV) Rated New Peerperform at Wolfe
• Spok Holdings (SPOK) Rated New Neutral at B Riley; PT $15
• Tactile Systems (TCMD) Rated New Buy at B Riley; PT $23
• Talen Energy Corp (TLN) Rated New Outperform at RBC; PT $233
• Tradeweb (TW) Rated New Buy at TD Cowen; PT $139
• Western Union (WU) Rated New Hold at Baptista Research; PT $12.90
• Winpak (WPK CN) Rated New Outperform at National Bank; PT C$55

Data sources: Bloomberg, Reuters, CQG

David Wienke