Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Personal Spending,
PCE, Core PCE, Advance Goods Trade Balance, Wholesale Inventories; 9:30ET Fed’s Collins speaks; 10::00ET U. of Mich. Sentiment; 11:00ET Kansas City Fed Services Activity; 1:15ET Fed’s Bowman speaks

HIGHLIGHTS and News:  

• China NFRA: to step up policies, measures to support economy
• China to boost economies of ethnic minorities’ regions
• Trump to meet Zelenskiy today at 9:45ET
• Journalist Ken Klippenstein published documents allegedly obtained via Iranian hackers

Global shares were mostly higher, boosted in Asia by China’s moves to rev up its economy. China’s central bank cut its reserve requirement for banks by 50 basis points
as of today as part of measures announced this week to help the property industry and support financial markets. In the latest sign of the angst hindering growth in the world’s second-largest economy, the government reported that industrial profits fell nearly
18% year-on-year in August. More fiscal measures are expected to be announced before China’s week-long holidays starting on October 1. China’s sweeping stimulus measures could drive a broad rotation into stocks outside the US, as well as emerging markets and
commodities, according to BofA strategists. Inflation in France and Spain slowed more than forecast in September, prompting traders to boost bets on the ECB lowering interest rates again next month. Israeli Prime Minister Benjamin Netanyahu pledged to hold
talks on a US-proposed cease-fire in Lebanon that could ease fears of a regional war.          

EQUITIES:  

US equity futures fluctuated before key PCE data, after the S&P 500 hit its 42nd closing record high this year. Investors are waiting for the core personal consumption expenditures price
index – the Fed’s preferred measure of inflation, for clues on the trajectory of interest-rates. An expected uptick in the savings rate and the slowdown in spending will probably show the Fed’s 50-bp cut was prudent. China’s daily stimulus announcements, coupled
with mounting bets for more interest-rate cuts from the Fed and the European Central Bank have stoked risk appetite across markets this week.  

Futures ahead of the data: E-Mini S&P ~flat, Nasdaq ~flat, Russell 2000 +0.4%, DJI +0.05% 

In pre-market trading, Bristol Myers Squibb (BMY) rises 4% after gaining US approval for the first new type of schizophrenia drug in seven decades. Cassava Sciences
(SAVA) falls 12% as the drugmaker and two of its former executives agreed to pay more than $40 million to settle SEC charges that they made misleading statements about the results of an Alzheimer’s drug trial. Dollar General (DG) drops 2% after Citi downgraded
the discount retailer to sell, saying Walmart’s market-share gains will continue to pressure the company. Establishment Labs (ESTA) climbs 28% after the medical technology company reported US approval for its Motiva breast implants. Udemy shares (UDMY) drops
4% as Morgan Stanley cut its rating to underweight. Wynn Resorts (WYNN) rises 2% as Morgan Stanley raises its rating to overweight, citing an underappreciated opportunity in the UAE.

Micron Technology, the largest US maker of computer memory chips, gained the most in nearly 13 years yesterday after giving surprisingly strong sales and profit forecasts,
helped by demand for artificial intelligence gear.

DELL relative to SPY: hwls key long term Fibonacci support and now above the key 200dma in the pair.

Semiconductors have been outperforming again as SMH vs SPY climbs back above the 200dma in the pair.

Materials outperformed yesterday. Materials ETF relative to the S&P 500; has not been above the 200dma* since March 2023. 

European gauges move higher, boosted by China’s slew of stimulus measures and growing conviction that US and euro-area interest rates will fall further in the coming months. The Stoxx
600 edges higher, as inflation figures in both Spain and France plunged more than expected below 2%, fueling expectations of more decisive rate cuts by the ECB.  The implied odds of a quarter-point reduction in October now stand at ~78% – up from around 20%
last week. The CAC 40 holds small gain after France’s preliminary inflation rate fell sharply in September as the consumer price index rose 1.5% year-on-year in August, down from 2.2% in the previous month, according to official data. Luxury companies such
as Richemont SA, Hermes International SCA and Kering SA extended gains on expectation that Chinese growth-boosting measures will benefit European exporters. Europe’s biggest luxury name LVMH got added impetus from an announcement it would invest in designer
outdoor label Moncler SpA, in a deal that will give it a seat on the Italian company’s board. Moncler jumped as much as 15%. Stoxx 600 +0.3%, DAX +0.9%, CAC +0.2%, FTSE 100 +0.5%. Chemicals +2.4%, Autos +1.9%, Luxury +1.5%, Food & Bev +1%. Healthcare -0.2%,
Banks -0.2%.

Shares in Asia were mixed but mostly higher, capping their best week in nearly two years. The MSCI Asia Pacific Index rose 1.4%, for a weekly gain of 5.7%.  Alibaba, JD and Meituan surged
in one of their best trading days in years. China’s CSI 300 Index rallied 4.5%, making the week’s 16% gain the most since 2008, as the PBOC unleashed one of the country’s most daring policy campaigns in decades. Nikkei 225 index gained more than 2% as ruling
party lawmakers chose former Defense Minister Shigeru Ishiba to become Japan’s next prime minister. Ishiba, who will take over from Prime Minister Fumio Kishida next week, has proposed an Asian version of the NATO military alliance and a more equal Japan-U.S.
security alliance. Hang Seng Tech +5.8%, Hang Seng Index +3.6%, Shanghai Composite +2.9%, Nikkei 225 +2.3%, Topix +0.7%, ASX 200 +0.1%. Vietnam -0.05%, Taiwan -0.2%, Singapore -0.25%, Sensex -0.3%, Philippines -0.4%, Kospi -0.8%.

FIXED INCOME: 
 

Treasury yields rose slightly during the APAC session and then fell as Spain and France inflation data came in weaker than expected. Treasuries hold small gains across
the curve with 10-year yield around 3.79% is less than 1bp lower on the day. US session features August personal income and spending data and related PCE price indexes along with a couple of Fed speakers.

METALS: 

Gold edge lower ahead of the US inflation data. Commodities have had a good week on the back of Chinese stimulus. Gold hit another record and silver scaled a 12-year
top on optimism the Fed will maintain an aggressive pace of interest-rate cuts this year. Spot gold -0.1%, Silver +0.05%, Copper -0.4%.

ENERGY:   

Oil steadied after a sharp two-day drop, with prices still on course for a substantial weekly decline on prospects of more supply from OPEC members Saudi Arabia and
Libya. Hurricane Helene barreled into the western coast of Florida with dangerous winds, knocking out power for more than a million customers and threatening to unleash deadly flooding across several states. The Category 4 hurricane has now weakened to a tropical
storm. Helene’s massive size means it’s expected to bring torrential rain and flooding to cities hundreds of miles away, with the storm causing widespread disruptions to ground and air travel. WTI +0.25%, Brent +0.2%, US Nat Gas -0.8%, RBOB +0.05%.

CURRENCIES:   

In currency markets, the yen is the strongest of the G-10 currencies, rising more than 1% against the dollar after Japan’s ruling party picked Shigeru Ishiba as its
next leader. Ishiba is seen as supportive of the Bank of Japan’s plan to gradually hike rates. The euro fell after data showed French consumer prices rose less than anticipated in September and Spain’s European Union-harmonized 12-month inflation fell to 1.7%
– the lowest reading since June 2023. The Swiss franc is edging toward a decade high as the central bank cuts rates more gradually than peers and refrains from currency intervention, according to JPMorgan and BNY.  US$ Index -0.01%, GBPUSD -0.2%, EURUSD -0.1%,
USDJPY -1.1%, AUDUSD -0.1%, NZDUSD -0.1%, USDCHF -0.2%.

Spot Bitcoin +1%, Spot Ethereum +0.6%.   

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
• Biomea Fusion (BMEA) Raised to Buy at Truist Secs; PT $54
• Raised to Buy at Rodman & Renshaw; PT $18
• Snap (SNAP) Raised to Buy at President Capital Management; PT $13
• Wynn Resorts (WYNN) Raised to Overweight at Morgan Stanley; PT $104
• Downgrades
• Agios (AGIO) Cut to Market Perform at Leerink; PT $56
• Ardmore Shipping (ASC) Cut to Hold at Fearnley; PT $19
• Bumble (BMBL) Cut to Sector Weight at KeyBanc
• Celldex (CLDX) Cut to Peerperform at Wolfe
• Dollar General (DG) Cut to Sell at Citi; PT $73
• HP Inc (HPQ) Cut to Neutral at BofA; PT $37
• Payfare (PAY CN) Cut to Hold at Canaccord; PT C$7.50
• Cut to Neutral at B Riley; PT C$4
• Scorpio Tankers (STNG) Cut to Hold at Fearnley; PT $80
• Smartsheet (SMAR) Cut to Neutral at Citi; PT $56.50
• Summit Therapeutics (SMMT) Cut to Neutral at Citi
• Udemy (UDMY) Cut to Underweight at Morgan Stanley; PT $7.50
• Vipshop (VIPS) ADRs Cut to Neutral at CCB Intl; PT $15.50
• Initiations
• Achieve Life Sciences (ACHV) Rated New Strong Buy at Raymond James
• ACV Auctions (ACVA) Reinstated Market Perform at Raymond James
• Airbnb (ABNB) Reinstated Market Perform at Raymond James
• Amgen (AMGN) Rated New Overweight at Cantor; PT $405
• Archrock (AROC) Rated New Buy at Citi; PT $24
• Autodesk (ADSK) Rated New Neutral at DA Davidson; PT $260
• Cboe (CBOE) Rated New Sector Perform at RBC; PT $220
• Chesapeake Energy (CHK) Rated New Buy at Roth Capital Partners; PT $92
• CME Group (CME) Rated New Sector Perform at RBC; PT $235
• Dell Technologies (DELL) Resumed Buy at Deutsche Bank; PT $144
• Flutter (FLUT) Reinstated Buy at William O’Neil
• Inmune Bio (INMB) Rated New Outperform at Raymond James; PT $18
• Intercontinental Exchange (ICE) Rated New Outperform at RBC; PT $200
• Kodiak Gas Services (KGS) Rated New Buy at Citi; PT $35
• LENZ Therapeutics Inc (LENZ) Rated New Outperform at Raymond James
• Loop Industries (LOOP) Rated New Corporate at Bryan Garnier; PT $4
• MercadoLibre (MELI) Rated New Outperform at Raymond James; PT $2,350
• Nasdaq Inc. (NDAQ) Rated New Outperform at RBC; PT $88
• Nubank (NU) Rated New Neutral at Safra; PT $13.80
• Onto Innovation Inc (ONTO) Reinstated Buy at William O’Neil
• Telus International CDA (TIXT CN) Rated New Hold at Desjardins; PT C$5.20
• USA Compression Partners (USAC) Rated New Neutral at Citi; PT $23
• VersaBank (VBNK CN) Rated New Buy at Roth Capital Partners; PT C$24.28
• VF Corp (VFC) Rated New Hold at Jefferies; PT $20
• Wajax (WJX CN) Rated New Sector Perform at National Bank; PT C$26
• Wave Life Sciences (WVE) Reinstated Overweight at JPMorgan; PT $13

Data sources: Bloomberg, Reuters, CQG

David Wienke