Daily Game Plan

by Contributor
on October 10, 2024

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

TODAY’S ECONOMIC DATA:  8:30ET CPI*, Initial Jobless Claims; Hourly Earnings; 9:15ET Fed’s Cook speaks; 10:30ET
Fed’s Barkin speaks; 11:00ET Fed’s Williams speaks; 1:00ET 30-Year Auction

CPI data up next – Survey is 0.1% m-o-m & 2.3% y-o-y

HIGHLIGHTS and News:  

  • S&P 500 has now added over $13 TRILLION of market cap in the last year
  • Tesla’s Robotaxi and FSD Semi Announcement Expected Today
  • US small business Uncertainty Index (NFIB) at 103, highest on record, doubled in 2 yrs
  • At least 27 tornados have torn through Florida as Hurricane Milton barreled across the state
  • Hurricane Milton shredded the roof of Tropicana Field, home of the Tampa Bay Rays

 

Global stocks are mixed as two key events loom large for investors, including US inflation data this morning. The market’s attention will then turn to a finance ministry
briefing in China on Saturday that will provide details of the fiscal stimulus plan. An article in Bild published today, stated that for the first time, Ukraine’s President Zelensky is sending signals that he is ready for a ceasefire in the defensive war against
Russia. Zelensky is demanding in return “a security guarantee from the United States, along the lines of those given by the Americans to Japan, South Korea and the Philippines.” The Kremlin said it has received no signals from Ukraine that it is ready for
a ceasefire.

 

EQUITIES:  

US equity futures are marginally lower ahead of today’s CPI data, after the S&P 500 and Dow both closed at record highs on Wednesday. Investors await inflation data that could show whether
the Federal Reserve will opt for a slower pace of interest-rate cuts. Meanwhile, Delta Air Lines kicked off the third-quarter earnings season, with profit and sales forecasts falling short of expectations. Major banks are scheduled to report tomorrow. 

Futures ahead of the bell: E-Mini S&P %, Nasdaq %, Russell 2000 %, DJI %. 

In pre-market trading, 10X Genomics (TXG) plunges 26% after the company posted preliminary 3Q revenue that fell short of its expectations, citing hesitant capital spending
by customers. Delta Air Lines (DAL) falls 5% after management forecast profit and sales that are short of Wall Street’s estimates for the final months of the year. Domino’s Pizza Inc. (DPZ) slips about 1% after the company trimmed its 2024 projection for sales
growth and new locations as slower consumer spending hits the restaurant industry. GXO Logistics (GXO) rises 12% as Bloomberg reports the supply-chain services provider is exploring a sale, citing a person familiar with the matter. Drugmaker Pfizer (PFE) slipped
1% after two of its former executives decided not to be involved in an activist campaign against the firm.

European gauges edged lower ahead of US CPI data. ECB monetary policy minutes were just released, showing policy makers believe the economic outlook for the euro area
was more concerning. The minutes also showed the ECB is not fully certain that inflation problem is solved. The new government in France is to deliver its 2025 budget today, with plans for 60 billion euros ($65.68 billion) worth of tax hikes and spending cuts
to tackle a spiraling fiscal deficit. Shares in GSK jumped more than 5% after the British pharmaceutical company agreed to pay $2.3 billion in the United States to end lawsuits alleging that its Zantac heartburn drug caused cancer. Shares in Italy’s BPER Banca
SpA jumped after the lender gave new targets for earnings and dividends. Chip stocks including Soitec and BE Semiconductor Industries NV fell after analysts cut price targets ahead of the earnings season. Stoxx 600 -0.1%, DAX ~flat, CAC -0.1%, FTSE 100 -0.2%.
Real Estate -1.1%, Basic Resources -1%, Technology -0.9%. Insurance +1%, Banks +0.6%.

Shares in Asia were mostly higher, helped by a rebound in China amid hopes that the country’s finance ministry will announce fresh stimulus during a briefing Saturday.
Chinese shares got a lift early in the Asia session as China’s central bank kicked off its 500 billion yuan facility to spur capital markets, setting up a $71 billion swap facility to provide liquidity for institutional investors to buy stocks. China’s blue-chip
CSI300 index failed to hold early gains but managed to close up just over 1%, after the previous day’s 7% fall. The MSCI AC Asia Pacific Index ended higher by 1.1%, snapping a two-day decline. Hang Seng Index +3%, Shanghai Composite +1.3%, ASX 200 +0.4%, Vietnam
+0.3%, Nikkei 225 +0.25%, Kospi +0.2%, Sensex +0.2%. Philippines -0.2%, Singapore -0.3%, CSI 1000  -1.3%.

FIXED INCOME: 
 

Treasuries are marginally cheaper across the curve, following wider losses across core European rates with focus on US CPI data release. Also, week’s auctions conclude
with $22 billion 30-year reopening, following average results for 3- and 10-year note sales which both tailed. Three Fed officials are scheduled to speak. Fed President Mary Daly said on Wednesday that she expects officials to cut rates by one or two more
quarter-points this year. Boston Fed chief Susan Collins reiterated her view that the Fed should take a “careful, data-based approach.”  10 year yield is up 3 bps at 4.09%, its highest since late July. The curve is roughly flat.

 

 

METALS: 

Gold is slightly higher in choppy trading as traders waited for US inflation data that may define Federal Reserve policy easing in the coming months. Fed Bank President
Lorie Logan said Wednesday that monetary easing should be implemented at a slower pace following last month’s cut. Copper slipped as markets await a key China briefing Saturday. Spot gold +0.2%, Silver +0.2%, Copper -0.2%.

 

 

ENERGY:   

 

Oil prices rose after a two-day decline as traders watched for an Israeli response to Iran’s missile attack, while US crude stockpiles expanded the most since April.
Iran has warned it’s ready to launch thousands of missiles if needed. Hurricane Milton made landfall in Florida, where about a quarter of fuel stations sold out of gasoline, helping to support crude prices.  More than 3 million utility customers in the state
are without power, which could last for days.  Milton weakened to a Category 1 storm but has grown in size. WTI +1.1%, Brent +1%, US Nat Gas -2.4%, RBOB +1.2%.

 

 

 

CURRENCIES:   

In currency markets, the dollar is mixed versus its major peers, and in tight ranges during the London session, as traders waited for US inflation data. Sterling
is slightly lower while UK house prices posted first growth in almost two years. The yen lost some downside momentum after Deputy Governor Himino said the Bank of Japan will continue to raise its benchmark rate, unwinding easy policy settings, if the economy
performs in line with projections. US$ Index +0.01%, GBPUSD -0.05%, EURUSD -0.05%, USDJPY -0.2%, AUDUSD -0.05%, NZDUSD +0.2%, USDCHF -0.2%, USDCAD +0.3%. 

 

 

 

Spot Bitcoin +1.4%, Spot Ethereum +2.2%   

 

  • Upgrades
    • Acadia Realty (AKR) Raised to Buy at Compass Point; PT $27
    • AIG (AIG) Raised to Overweight at JPMorgan; PT $89
    • Bank of Marin (BMRC) Raised to Buy at DA Davidson; PT $24
    • Brinker (EAT) Raised to Neutral at BofA; PT $90
    • Calibre Mining (CXB CN) Raised to Outperform at National Bank; PT C$4
    • Canadian National (CNR CN) Raised to Outperform at RBC; PT C$179
    • Carrier Global (CARR) Raised to Neutral at JPMorgan; PT $83
    • CVS (CVS) Raised to Overweight at Barclays; PT $82
    • Exxon (XOM) Raised to Sector Outperform at Scotiabank; PT $145
    • Fortive (FTV) Raised to Overweight at JPMorgan; PT $92
    • Harmony (HAR SJ) ADRs Raised to Neutral at JPMorgan; PT $8.20
    • Iamgold (IMG CN) Raised to Outperform at National Bank; PT C$11
    • L3Harris (LHX) Raised to Outperform at Wolfe; PT $300
    • LendingClub (LC) Raised to Outperform at KBW; PT $15
    • Medtronic (MDT) Raised to Outperform at RBC; PT $105
    • Nike (NKE) Raised to Buy at Truist Secs; PT $97
    • Torex Gold Resources (TXG CN) Raised to Outperform at National Bank
    • TransUnion (TRU) Raised to Outperform at Wolfe; PT $130
    • Wheaton Precious Metals (WPM CN) Raised to Outperform at National Bank
  • Downgrades
    • American Tower (AMT) Cut to Equal-Weight at Wells Fargo; PT $230
    • Arcadium Lithium (ALTM) Cut to Hold at HSBC; PT $5.85
      • Cut to Market Perform at Raymond James
    • Azul (AZUL4 BZ) ADRs Cut to Neutral at Seaport Global Securities
    • BP (BP/ LN) ADRs Cut to Sector Perform at Scotiabank; PT $36
    • Centrus Energy (LEU) Cut to Neutral at Roth Capital Partners; PT $62
    • Cirrus Logic (CRUS) Cut to Equal-Weight at Barclays
    • First Advantage (FA) Cut to Peerperform at Wolfe
    • Hexcel (HXL) Cut to Hold at Vertical Research; PT $65
    • Honeywell (HON) Cut to Neutral at JPMorgan; PT $235
    • Hubbell (HUBB) Cut to Neutral at JPMorgan; PT $454
    • Huntington Ingalls (HII) Cut to Hold at Vertical Research; PT $275
      • Cut to Peerperform at Wolfe
    • I-80 Gold (IAU CN) Cut to Sector Perform at National Bank; PT C$2.25
    • Lululemon (LULU) Cut to Hold at CFRA
    • Organon (OGN) Cut to Sell at CFRA
    • PayPal (PYPL) Cut to Market Perform at Bernstein; PT $80
    • PepsiCo (PEP) Cut to Hold at TD Cowen; PT $183
    • Quebecor (QBR/B CN) Cut to Sector Perform at Scotiabank; PT C$38
    • Saratoga Investment (SAR) Cut to Neutral at Ladenburg Thalmann
    • Skyworks (SWKS) Cut to Underweight at Barclays
  • Initiations
    • Acadia Pharma (ACAD) Reinstated Market Perform at Raymond James
    • Agios (AGIO) Re-Initiated Outperform at Raymond James; PT $51
    • Align Technology (ALGN) Rated New Hold at Needham
    • Amer Sports (AS) Rated New Buy at William O’Neil
    • Argenx (ARGX BB) ADRs Reinstated Strong Buy at Raymond James; PT $605
    • Banc of California (BANC) Rated New Neutral at Citi
    • Biogen (BIIB) Reinstated Market Perform at Raymond James
    • BioMarin (BMRN) Reinstated Outperform at Raymond James; PT $79
    • Birkenstock (BIRK) Rated New Buy at BTIG; PT $60
    • Builders FirstSource (BLDR) Rated New Buy at Goldman; PT $225
    • Capital Clean Energy Car (CCEC) Rated New Buy at Fearnley; PT $22
    • Denali Therapeutics (DNLI) Reinstated Market Perform at Raymond James
    • Galaxy Digital (GLXY CN) Rated New Buy at HC Wainwright; PT C$24
    • Harmony Biosciences (HRMY) Reinstated Outperform at Raymond James
    • Immunovant (IMVT) Reinstated Outperform at Raymond James; PT $36
    • MARA Holdings Inc (MARA) Rated New Overweight at Cantor; PT $21
    • Milestone Scientific (MLSS) Rated New Speculative Buy at Benchmark
    • Monday.com (MNDY) Rated New Overweight at Capital One; PT $325
    • Neurocrine Bio (NBIX) Reinstated Outperform at Raymond James; PT $155
    • OnKure Therapeutics Inc (OKUR) Rated New Outperform at Oppenheimer
    • P&G (PG) Rated New Neutral at DA Davidson; PT $159
    • PTC Therapeutics (PTCT) Reinstated Market Perform at Raymond James
    • Regenxbio (RGNX) Reinstated Outperform at Raymond James; PT $18
    • Sage Therapeutics (SAGE) Reinstated Market Perform at Raymond James
    • Sarepta (SRPT) Reinstated Outperform at Raymond James; PT $150
    • SiteOne Landscape (SITE) Rated New Neutral at Goldman; PT $158
    • SouthState Corp (SSB) Rated New Neutral at Citi
    • Sunnova Energy (NOVA) Rated New Buy at Jefferies; PT $15
    • Synovus (SNV) Rated New Buy at Citi
    • TXNM Energy Inc (TXNM) Rated New Sector Perform at Scotiabank; PT $46
    • UMB Financial (UMBF) Rated New Buy at Citi
    • uniQure (QURE) Reinstated Outperform at Raymond James; PT $20
    • Veracyte (VCYT) Rated New Buy at Guggenheim; PT $40
    • Vertex Pharmaceuticals (VRTX) US Reinstated Market Perform at Raymond James
    • Xenon Pharmaceuticals (XENE) Reinstated Outperform at Raymond James

 

 

 

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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