Daily Game Plan

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

DATA/HEADLINES   8:30ET Advance Goods Trade Balance, Wholesale Inventories, Personal Income and Spending, PCE Deflator*;
9:45ET MNI Chicago PMI; 10:00ET U. of Mich. Sentiment; 11:00ET Kansas City Fed Services Activity; 12:45ET Fed’s Williams speaks

TODAY’S HIGHLIGHTS:  

• Ukraine stepped up missile and drone attacks on Crimea

World shares are broadly higher but still set to end September with their worst quarterly performance in a year. The global bond selloff eased, after the previous
day’s selloff, after dovish-leaning comments from Federal Reserve policymakers and signs that European inflation is finally slowing. The BOJ announced an unscheduled bond-purchase operation after yields on long and super-long debt climbed to decade highs.
The operation is small and probably not strong enough to bring a big reduction in yields. Japan’s consumer prices excluding fresh food rose by a lower-than-expected 2.5%.  Euro-area core inflation eased to 4.5% in September, its slowest pace in a year and
much less than expected. Headline inflation moderated to 4.3% from 5.2%, an almost two-year low that was also below expectations.  The UK economy was 2% bigger than previously thought in the second quarter, and German retail sales printed weaker at -1.2% versus
a consensus of 0.5%.  

EQUITIES: 

US equity futures are higher on the last trading day of the quarter as investors await today’s core PCE inflation data and the Fed’s preferred “supercore” gauge. Wall Street closed higher
on Thursday after comments from Fed policymakers, including Richmond Fed chief Thomas Barkin, who said the US would likely skirt a severe downturn. Meanwhile, Chicago Fed’s Austan Goolsbee said policymakers were at risk of overshooting on interest rates. The
quick retreat in US equities from the summer highs over the past couple of months has pushed stock valuations in the S&P 500 down, largely trading at a discount to its pre-pandemic norm, according to Bloomberg analysis. With a US shutdown looking increasingly
inevitable, discussion is shifting to how long it might last. House Republicans released the text of a stopgap bill that would fund the government for a month.    

Futures ahead of the data: E-Mini S&P +0.5%, Nasdaq +0.6%, Russell 2000 +0.5%, Dow +0.5%.

In pre-market trading, Nike rose ~8% after profit beat and its inventory glut eased. JPMorgan expects results to support shares across the sector today. Under Armour (UAA) and Dick’s
Sporting Goods (DKS) are among apparel and footwear stocks that are trading higher ahead of the bell.  OPKO Health (OPK US) gains 8% after its ModeX Therapeutics won a contract from the US to develop antibodies to battle viral infectious disease threats. Blue
Apron (APRN) gains over 130% after announced that it has entered into a definitive merger agreement to be acquired by Wonder Group for $13 per share. Brinker International  (EAT) rises 4% on light volume after Stifel raised his recommendation to buy from hold.

European gauges are firmly higher, boosted by data showing a slowdown in inflation and British figures showing the economy is stronger than previously thought. Euro zone consumer prices
rose by 4.3% in September, the slowest pace since October 2021, from 5.2% one month earlier. Core fell to 4.5% from 5.3%, the biggest drop since August 2020. Gains were led by luxury stocks after Bank of America strategists raised their view on the sector
to overweight. Among individual stocks, Germany’s Commerzbank AG rose more than 10% after announcing plans to return €3 billion ($3.2 billion) to shareholders. Stoxx 600 +1%, DAX +0.9%, CAC +1%, FTSE 100 +0.6%. REITs +2.3%, Technology +1.8%, Food & Bev +1.5%.
Energy is flat.            

Asian equities gained, led by a rally in Hong Kong on hopes that China’s Golden Week holiday will spur a consumption revival and boost sentiment. Activity around Chinese shopping malls
remained at relatively high levels in September, according to SpaceKnow. China’s internet regulator plans to relax its strict rules on data flows abroad, in the country’s latest move to ease foreign business concerns. Mainland China markets are closed for
holiday through October 8.  The MSCI Asia Pacific Index climbed 0.7%. Hang Seng Tech Index +3.8%, Hang Seng Index +2.5%, Sensex +0.5%, ASX 200 +0.3%, Vietnam +0.15%. Korea and Taiwan were closed for holidays. 

FIXED INCOME: 
 

Global bond yields eased, with 10-year US Treasuries down more than 3 basis points and Japanese 10-year yields sliding from decade-highs after an unscheduled bond-buying
operation by the central bank. French bonds were among the biggest gainers after data showed price growth unexpectedly slowing, a day after Germany reported inflation at the lowest in two years. US Treasury yields are lower by 3bps across the curve in sympathy
with European core yields moving lower.  The moves signal relief after a quarter that’s put 30-year borrowing costs on track for their steepest increase since 2009. US 10-year Treasury yield falls to 4.54%. Front-end lags rest of the curve slightly, flattening
2s10s spread by around 1bp on the day, sitting back around 50bp inverted.

METALS: 
   

Gold ticked up as the US dollar retreated from a 10-month high, although bullion was set for a second monthly drop driven by expectations that interest rates will stay higher for longer.
The Fed’s Thomas Barkin said policymakers have time to decide if they need to do more to tame inflation and he expects further tightening in the labor market to come from the effects of previous rate hikes on the economy.  Traders will scan the US personal
consumption data this morning, as they keep a close watch on the looming US government shutdown, with markets in top bullion consumer China close for the Golden week holidays. Spot gold +0.2%, silver +1.9%.            

ENERGY:  

Oil prices were on course for a fourth-straight month of gains, supported by tightening supplies, dwindling inventories and expected strong demand from China. Oil
product supply is also getting tighter amid Russia’s ban on gasoline and diesel exports.  Russia said this morning that it plans near zero diesel exports next month. US natural gas prices are lower after rising for a fifth consecutive session to finish at
their highest since August 9 on Thursday, after the weekly report from the EIA came in only slightly bearish compared to forecasts. The Biden administration is planning the smallest-ever sale of offshore oil-drilling rights in the Gulf of Mexico over the next
five years, sources said. Industry advocates had pushed for a robust sale schedule to ensure steady production.  WTI +1%, Brent +0.8%, US Nat Gas -0.6%, RBOB +0.4%.    

CURRENCIES:   

In currency markets, The dollar headed for its worst two-day run since mid-July as quarter-end flows put consensus positioning to the test ahead of key data releases
out of the US.  The kiwi and Norwegian krone are the best performers among the G-10 currencies. The Australian dollar rises on quarter-end exporter buying, taking kiwi higher in part due to cross flows.  Sterling is higher but still heads for its worst month
in a year. US$ Index -0.4%, GBPUSD +0.4%, EURUSD +0.2%, USDJPY -0.05%, AUDUSD +0.9%, USDNOK -0.9%, NZDUSD +1.1%.           

Bitcoin %, Ethereum %. Ether futures ETFs could be trading as early as Tuesday as SEC looks to speed things up in order to get it done before looming shutdown. The
SEC further delayed its review of applications from BlackRock, Invesco and others seeking to list the first Bitcoin ETF in the US.  

TECHNICAL LEVELS: 

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
• (BALL) Ball Raised to Buy at Jefferies; PT $64
• (BMBL) Bumble Raised to Buy at Loop Capital; PT $18
• (BTE CN) Baytex Energy Raised to Outperform at BMO; PT C$7.50
• (EAT) Brinker Raised to Buy at Stifel; PT $45
• (EDIT) Editas Raised to Buy at Stifel; PT $17
• (QSR CN) Restaurant Brands Raised to Buy at Loop Capital; PT C$108.94
• (SR) Spire Raised to Buy at Mizuho Securities; PT $66
• (SSU) Signa Sports United Raised to Neutral at Citi
• (TRMB) Trimble Raised to Outperform at Raymond James; PT $65
• (TXRH) Texas Roadhouse Raised to Buy at Northcoast; PT $118
• (VTRU) Vitru Raised to Outperform at Grupo Santander; PT $22
• Downgrades
• (BMI) Badger Meter Cut to Sell at Northcoast; PT $120
• (BRK/A) Berkshire Hathaway Cut to Hold at Edward Jones
• (NINE) Nine Energy Service Cut to Underperform at ATB Capital; PT $3.50
• (RMD) ResMed Cut to Peerperform at Wolfe
• (SUN) Sunoco Cut to Neutral at Mizuho Securities; PT $53
• (USAC) USAC US Cut to Underperform at Mizuho Securities; PT $22
• (WFC) Wells Fargo Cut to Hold at CFRA; PT $45
• Initiations
• (ABBV) AbbVie Rated New Outperform at Raymond James; PT $177
• (ADBE) Adobe Rated New Hold at HSBC; PT $519
• (ADSK) Autodesk Rated New Hold at HSBC; PT $214
• (AKAM) Akamai Rated New Hold at HSBC; PT $106
• (ALNY) Alnylam Rated New Outperform at Raymond James; PT $208
• (BC) Brunswick Rated New Equal-Weight at Morgan Stanley; PT $84
• (CUBI) Customers Bancorp Rated New Strong Buy at Raymond James; PT $60
• (ELEV) Elevation Oncology Rated New Buy at HC Wainwright; PT $1.50
• (FCNCA) First Citizens Rated New Neutral at Citi; PT $1,520
• (FDX) FedEx Rated New Buy at HSBC; PT $330
• (FICO) Fair Isaac Rated New Reduce at HSBC; PT $729
• (FNA) Paragon 28 Rated New Outperform at William Blair
• (FTNT) Fortinet Rated New Buy at HSBC; PT $75
• (FUSN) Fusion Pharmaceuticals Rated New Outperform at Oppenheimer
• (HBAN) Huntington Bancshares Rated New Buy at Citi; PT $12
• (IMR CN) iMetal Resources Rated New Buy at Fundamental Research
• (INGR) Ingredion Rated New Outperform at Oppenheimer; PT $120
• (INTU) Intuit Rated New Hold at HSBC; PT $520
• (IONS) Ionis Pharma Rated New Strong Buy at Raymond James; PT $63
• (JAZZ) Jazz Pharma Rated New Market Perform at Raymond James
• (LNTH) Lantheus Rated New Outperform at William Blair
• (LUN CN) Lundin Mining Rated New Buy at Jefferies; PT C$13
• (MOV) Movado Rated New Buy at Benchmark; PT $41
• (MTN) Vail Resorts Rated New Equal-Weight at Morgan Stanley; PT $272
• (NHI) National Health Investors Rated New Hold at Berenberg; PT $54
• (NICE IT) Nice Ltd ADRs Rated New Neutral at DA Davidson; PT $190
• (NYCB) New York Community Bancorp Rated New Neutral at Citi; PT $12
• (PANW) Palo Alto Networks Rated New Hold at HSBC; PT $242
• (PII) Polaris Reinstated Equal-Weight at Morgan Stanley; PT $120
• (TSCO) Tractor Supply Reinstated Outperform at Wolfe; PT $239
• (UPS) UPS Rated New Hold at HSBC; PT $170
• (VIVT3 BZ) Vivo ADRs Reinstated Outperform at Itau BBA; PT $11
• (VLTO-W) Veralto Rated New Neutral at Baird; PT $82
• (WOOF) Petco Rated New Peerperform at Wolfe
• (ZION) Zions Rated New Buy at Citi; PT $42

Data sources: Bloomberg, Reuters, CQG