Daily Game Plan

by Contributor
on October 1, 2024

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

TODAY’S ECONOMIC DATA:  9:45ET S&P Global US Manufacturing PMI; 10:00ET Construction Spending, JOLTS Job Openings,
ISM Manufacturing, Prices Paid ISM Employment;10:30ET Dallas Fed Services Activity; 11:00ET Fed’s Bostic and Cook speak; 6:15ET Fed’s Bostic, Barkin and Collins speak

HIGHLIGHTS and News:  

  • Hurricane Helene killed at least 133 people and hundreds more were still unaccounted for
  • IDF asks some towns in south Lebanon to leave ‘immediately’
  • Pete Rose, baseball’s all-time leader in hits, has died at age 83
  • North Korea: no more personal diplomacy with the US, including Trump
  • Jimmy Carter’s 100th birthday is today, the first time a US president has lived a full century

 

World equities edge higher as global factory activity weakened in September as soft demand and economic uncertainty pointed to a tough outlook. Sentiment remains
upbeat on expectations of further monetary policy easing by global central banks. With China’s bouncing markets closed after the government’s stimulus blitz last week, attention overseas switched to Europe.  Weighed down by plunging energy prices, a China-related
factory slump and growing concerns about the region’s ailing auto sector, euro zone inflation fell to 1.8% last month. French, German and Spanish inflation were even lower with annual Italian consumer inflation as low as 0.8%. Meanwhile, Israel launched a
ground operation in Lebanon, escalating its battle against Hezbollah.           

 

EQUITIES:  
SMCI Trading split adjusted today (10-for-1 stock split)

US equity futures are mixed a day after Fed chair Jerome Powell cooled speculation of a second 50 basis point cut at the central bank’s next meeting, suggesting that two more quarter-point
rate cuts by year’s end was a base case. A slew of Fed speakers are due today. Clouding the economic data picture ahead is a major labor strike. US dockworkers walked out of every major port on the East and Gulf coasts, a strike that JPMorgan estimates may
cost the economy up to $4.5 billion a day. Wall Street kicks off the final quarter of a stellar 2024 from yet another record close.   

Futures ahead of the bell: E-Mini S&P -0.05%, Nasdaq +0.05%, Russell 2000 -0.1%, DJI -0.25% 

In pre-market trading, Boeing falls 3% as the company is said to weigh raising at least $10B selling new stock. Apple shares fall as Barclays says its checks show that the tech giant
has cut iPhone orders at a key Taiwanese supplier for the December quarter indicating weak demand. Atlassian (TEAM) rises 2% as Raymond James turns bullish, citing growth potential for the cloud business despite a period of undershooting expectations. CVS
Health (CVS) gains 2% as the company is conducting a strategic review of options including a possible breakup. IGM Biosciences (IGMS) sinks 23% after its chief executive, scientific and medical officers stepped down amid a pivot to focus exclusively on autoimmunity.
Pennant Group (PNTG) declines 2% after the health-care company launched a 3.5 million share offering to repay debt. ZIM Integrated Shipping (ZIM) drops 5% after dockworkers walked out of every major port on the US East and Gulf coasts.

European gauges edged higher after new euro-area inflation data backed bets that the ECB will move ahead more quickly with its rate-cut policy. Manufacturing activity
across the euro zone slowed at its fastest pace this year, while recorded its most pronounced worsening of conditions for 12 months. Euro zone inflation dipped below 2% for the first time since mid-2021, reinforcing an already solid case for an ECB rate cut
this month. Core inflation dipped to 2.7% from 2.8% and services growth slowed a touch to 4.0% from 4.1%. Real Estate and technology lead gains while banks underperform. French stocks could be active today, with Prime Minister Michel Barnier set to face parliament
to deliver a make-or-break speech outlining how he plans to regain control of public finances. Stoxx 600 +0.35%, DAX +0.5%, CAC -0.05%, FTSE 100 +0.5%. REITs +1.75%, Technology +0.9%. Banks -1.2%, Household Goods -0.3%.

Shares in Asia were mostly higher in thin trading, with a number of major markets closed for a holiday. The MSCI Asia Pacific Index was up about 0.2%. Japan’s Nikkei
225 rose nearly 2% recouping some of Monday’s 4.8% plunge. Japanese defense companies jumped as investors expect they will benefit from more government spending under Shigeru Ishiba. Thailand’s electronic component sector advanced after Google said it plans
to invest $1 billion to build data centers in Thailand. Growth in India’s manufacturing industry cooled to an eight-month low in September as new orders grew at the weakest pace since December. Hong Kong and Korea were closed today while Chinese markets are
closed for the rest of the week. Topix +1.7%, Indonesia +1.5%, Philippines +1.5%, Thailand +1.1%, Taiwan +0.75%, Vietnam +0.3%. Sensex -0.05%, Singapore -0.1%, ASX 200 -0.75%.  

EEM vs SPY: slipped back to the key 200dma in the pair.

FIXED INCOME: 
 

Euro zone inflation data helped the bond market rally as it came in below the ECB’s target, boosting the case for speedier rate cuts there. US Treasury yields fell,
led by the long end; yield curves flatten by 2-3bps; 10-year yield around 3.745%, lower by 3.5bps. US session highlights include ISM manufacturing data and JOLTS job openings, along with several Fed speakers.  BlackRock CEO Larry Fink said the market is pricing
“crazy” levels of Fed rate cuts given the US economy continues to grow.     

 

 

METALS: 

Gold rose with escalating Middle East tensions. If the hostilities drag in Tehran and lead to a wider war in the Middle East, gold stands to benefit from increased
safe haven demand. Gold has risen 13% over July-September, its best quarterly performance in over four years. Yesterday was only the 7th time since 1990 that copper was up as much as 4% intraday but finished down over 1%. Spot gold +0.7%, Silver +0.7%, Copper
+0.4%.

 

 

 

ENERGY:   

 

Oil prices eased given the prospect of additional supply amid lackluster global demand growth, offsetting worries that an escalating Middle East conflict could disrupt
exports in the key producing region. Israel said intense fighting erupted with Hezbollah in south Lebanon today, at the start of a ground incursion following devastating airstrikes against Hezbollah’s leadership. WTI -0.8%, Brent -0.7%, US Nat Gas -2.4%, RBOB
-1.1%

 

 

 

CURRENCIES:   

In currency markets, the dollar firmed after comments by Fed Chair Jerome Powell scuttled bets on a second big rate reduction. The yen steadied close to the middle
of its range against the dollar over the past month, after a volatile two days as traders sized up Japan’s incoming prime minister and his cabinet. Bank of Japan policymakers discussed the need to go slow in raising interest rates as jittery markets clouded
the outlook, reducing the chance of a near-term rate hike. The euro fell to its lowest in a week after dovish comments from European Central Bank Governing Council member Olli Rehn. Sterling fell after BOE policymaker Megan Greene said more interest rate cuts
are likely as prices are “moving in the right direction.”  US$ Index +0.35%, GBPUSD -0.4%, EURUSD -0.45%, USDJPY +0.1%, AUDUSD -0.05%, NZDUSD -0.5%, USDCHF +0.2%.

 

 

Spot Bitcoin ~flat, 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
    • Atlassian (TEAM) Raised to Outperform at Raymond James; PT $200
    • Becton Dickinson (BDX) Raised to Buy at Citi; PT $275
    • Bio-Rad (BIO) Raised to Buy at Citi; PT $400
    • Clorox (CLX) Raised to Buy at Jefferies; PT $187
    • Datadog (DDOG) Raised to Buy at DA Davidson; PT $140
    • Ford (F) Raised to Buy at Goldman; PT $13
    • Newmont Corp (NEM) Raised to Buy at Veritas Investment Research Co
    • Range Resources (RRC) Raised to Overweight at Wells Fargo; PT $39
    • Roku (ROKU) Raised to Neutral at MoffettNathanson LLC; PT $80
    • TTEC (TTEC) Raised to Neutral at Guggenheim
  • Downgrades
    • Alliant Energy (LNT) Cut to Sell at CFRA; PT $59
    • Antero Resources (AR) Cut to Underweight at Wells Fargo; PT $25
    • CDW (CDW) Cut to Neutral at Citi; PT $245
    • Charles River (CRL) Cut to Sell at Citi; PT $175
    • Disney (DIS) Cut to Market Perform at Raymond James
    • EchoStar (SATS) Cut to Market Perform at Raymond James
    • Fastly (FSLY) Cut to Market Perform at Raymond James
    • First Interstate Banc (FIBK) Cut to Underweight at Wells Fargo; PT $28
    • Fluence Energy (FLNC) Cut to Neutral at Citi; PT $24
    • General Dynamics (GD) Cut to Equal-Weight at Wells Fargo; PT $317
    • Gritstone (GRTS) Cut to Market Perform at JMP
    • Hologic (HOLX) Cut to Neutral at Citi; PT $85
    • HP Inc (HPQ) Cut to Neutral at Citi; PT $37
    • IGM Biosciences (IGMS) Cut to Hold at Truist Secs; PT $12
      • Cut to Underweight at JPMorgan; PT $9
    • Interpublic (IPG) Cut to Neutral at JPMorgan; PT $33
    • Magnolia Oil & Gas (MGY) Cut to Underweight at Wells Fargo; PT $22
    • PagSeguro (PAGS) Cut to Market Perform at Itau BBA; PT $12
    • Pinnacle Financial (PNFP) Cut to Equal-Weight at Wells Fargo; PT $100
    • Popular (BPOP) Cut to Equal-Weight at Wells Fargo; PT $105
    • Synovus (SNV) Cut to Equal-Weight at Wells Fargo; PT $46
  • Initiations
    • Alphabet (GOOGL) Rated New Buy at Pivotal; PT $215
    • Danaher (DHR) Rated New Overweight at Stephens; PT $315
    • Epsilon Energy Ltd (EPSN) Rated New Buy at Roth Capital Partners; PT $7
    • Euronet (EEFT) Rated New Outperform at Oppenheimer; PT $121
    • Incyte (INCY) Rated New Outperform at Wolfe; PT $84
    • International Money (IMXI) Rated New Market Perform at Oppenheimer
    • Labcorp (LH) Rated New Neutral at Piper Sandler; PT $235
    • Latam Airlines (LTM CI) ADRs Rated New Overweight at Morgan Stanley
    • LCI Industries (LCII) Rated New Market Perform at Raymond James
    • Meta Platforms (META) Rated New Buy at Pivotal; PT $780
    • Metalla Royalty & Streaming (MTA CN) Rated New Buy at Canaccord
    • Moneylion (ML) Rated New Market Perform at Oppenheimer
    • Neumora Therapeutics (NMRA) Rated New Buy at HC Wainwright; PT $30
    • Pagaya (PGY) Rated New Outperform at Oppenheimer; PT $12
    • Patrick Industries (PATK) Rated New Outperform at Raymond James
    • Perspective Therapeutics (CATX) Rated New Outperform at Wedbush; PT $25
    • SharkNinja (SN) Rated New Outperform at Oppenheimer; PT $120
    • Shift4 Payments (FOUR) Rated New Outperform at Oppenheimer; PT $109
    • SM Energy (SM) Rated New Buy at Baptista Research; PT $54.90
    • Terex (TEX) Rated New Hold at Baptista Research; PT $59.40
    • Thermo Fisher (TMO) Rated New Overweight at Stephens; PT $680
    • Veren (VRN CN) Rated New Buy at Baptista Research
    • Western Copper (WRN CN) Rated New Outperform at National Bank; PT C$3.50
    • Xenon Pharmaceuticals (XENE) Rated New Buy at HC Wainwright; PT $53

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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