Daily Game Plan

by Contributor
on October 14, 2024

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

TODAY’S ECONOMIC DATA:  ET 9:00 a.m Fed’s Kashkari speaks , 3:00 p.m Fed’s Waller speaks

HIGHLIGHTS and News:  

  • SOFI: SoFi Technologies enters $2B loan agreement with Fortress Investment(+5% pre-market).
  • SpaceX successfully lands booster rocket back at launch site

 

Global stocks were broadly higher, with U.S. equity futures inching up as traders awaited the latest quarterly results from several major corporations and banking
giants later this week. The majority of Asian markets were in the green, while European stocks were mixed. Chinese stocks rebounded from their worst week since late July after Beijing pledged further fiscal support for the economy, and Goldman Sachs upgraded
its growth forecasts. Bank of America, Goldman Sachs, and Johnson & Johnson are set to report their latest results on Tuesday before the market opens, while Morgan Stanley and United Airlines will release their results on Wednesday.

 

EQUITIES:  

 

U.S equity futures were poised to extend its gains on Monday after reaching a new all-time high, as investors prepared for the latest round of corporate earnings
and began to focus on the upcoming U.S. election. Boeing shares fell 1.8% as the company announced plans to cut its global workforce by about 10% and disclosed $5 billion in charges across its commercial and defense sectors. Meanwhile, cryptocurrency-linked
companies rallied in premarket trading due to rising Bitcoin prices, while U.S.-listed casino stocks declined following the election of a new Macau leader who cautioned against the gambling industry’s influence. Caterpillar shares dropped 2.6% after being
downgraded by Morgan Stanley, and SentinelOne saw a 4.2% rise after Piper Sandler upgraded its rating. Overall, significant movers included MicroStrategy (+5.0%), Sirius XM (+6.0%), and Tevogen Bio (+105.5%), while AppLovin (-4.1%) and Top Wealth Group Holding
(-21.0%) had notable declines.

Futures ahead of the bell: E-Mini S&P +0.17%, Nasdaq +0.3%, Russell 2000 -0.15%, DJI -0.16%

European stocks were mixed, unable to build on last week’s gains amid concerns that emerging cracks in the region’s economies will be reflected in the upcoming earnings
season. The Stoxx Europe 600 Index remained largely unchanged, with technology stocks leading gains while travel and leisure shares lagged, particularly Entain Plc, which fell 13% following reports of a potential £3 billion tax increase on the sector by UK
Chancellor Rachel Reeves. France’s CAC 40 slipped after Fitch revised its outlook for the country to negative. Although data indicates a gentle cooling in the euro-area economy rather than a sharp downturn, worries persist regarding French finances and Germany’s
sluggish economy, which is reportedly in a mild recession. The European Central Bank is expected to cut interest rates later this week as investors assess the impact of China’s recent stimulus measures. Some analysts suggest that seasonal weaknesses typically
seen in September may be delayed, making October potentially more volatile for markets, especially with major companies like LVMH and ASML set to report earnings this week. DAX +0.2%, FTSE +0.02%, Stoxx 600 -0.01%, CAC 40 -0.3%.

Asian stocks edged higher as Chinese equities rebounded following Beijing’s commitment to support the economy, reversing early losses with the MSCI Asia Pacific excluding
Japan index rising by 0.4%. Despite a volatile session, mainland Chinese stocks closed higher after experiencing their worst week since late July, as investors awaited more details on fiscal measures. Although no specific figures were provided, traders are
optimistic about the finance minister’s pledge to bolster the struggling property sector and hints at increased government borrowing. Meanwhile, defense-related stocks surged in China amid military drills around Taiwan, while shares of Chinese property developers
rose following government promises of support. However, consumption-related shares dropped as recent supportive measures failed to indicate urgency from authorities to boost consumption. Japan and Thailand remained closed for holidays. China’s CSI 300 +1.9%;
Hang Seng -0.75%; Kospi +1.02%; ASX 200 +0.47%

FIXED INCOME: 
 

Treasury futures edged lower on Monday, reflecting weakness in European rates, particularly long-end gilts, where UK 30-year yields dropped by 3 basis points. As
the economic calendar was sparse for the session, traders are looking ahead to key data releases this week, including retail sales and industrial production, while Fed speakers are anticipated to provide insights into future monetary policy direction.

 

METALS: 

Gold prices eased on Monday, influenced by a stronger U.S. dollar, as investors awaited new signals regarding Federal Reserve interest rate cuts. Meanwhile, in China,
authorities announced plans to significantly increase debt to stimulate the economy, although specifics on the stimulus package remain unclear. Gold -0.1%, Silver -1%

 

 

ENERGY:   

 

Oil prices fell following a disappointing briefing from China’s Finance Ministry, which lacked new incentives to boost consumption in the world’s largest oil importer,
while concerns over potential Israeli military actions against Iran loomed large. Brent crude dropped nearly 2% before stabilizing around $78 per barrel, and West Texas Intermediate fell below $75. Despite China’s promises of support for its struggling property
sector, traders were left wanting more concrete fiscal stimulus. Meanwhile, the market remains on high alert as Israel considers its response to Iran’s October 1 missile attack, with reports suggesting potential targeting of military and energy infrastructure.
WTI -1.9%, Brent -1.8%, Nat Gas -2.3%.

 

 

CURRENCIES:   

In currency markets, the dollar rose and remained near recent highs on Monday as investors assessed China’s somewhat disappointing weekend stimulus announcements,
while the euro extended its decline ahead of an upcoming central bank meeting. The euro is marking its 11th drop in 12 sessions due to expectations of a widely anticipated 25 basis point interest rate cut from the European Central Bank at its October 17 meeting,
amid signs of deteriorating euro zone activity. Lloyds Bank strategist noted that the current policy is too restrictive and highlighted the challenge for ECB President Lagarde in communicating this shift without alarming hawkish members. Currency movements
were muted as Japanese markets were closed for Sports Day, and U.S. Treasuries were also inactive due to Columbus Day.US$ Index +0.3%, GBPUSD -0.1%, EURUSD -0.2%, USDJPY +0.4%, AUDUSD -0.5%, NZDUSD -0.5%, USDCHF +0.2%.

 

 

Spot Bitcoin +3.3%, Spot Ethereum +3.6%   

 

 

 

 

  • Upgrades
    • Affirm Holdings (AFRM)
      Raised to Neutral at Wedbush; PT $45
    • AptarGroup (ATR)
      Raised to Buy at Jefferies; PT $215
    • Easterly Government (DEA)
      Raised to Buy at Jefferies; PT $15
    • Elastic (ESTC)
      Raised to Outperform at William Blair
    • Equinor (EQNR
      NO) ADRs Raised to Equal-Weight at Morgan Stanley; PT $25.80
    • Equity Bancshares (EQBK)
      Raised to Overweight at Stephens; PT $46
    • Flutter (FLUT)
      Raised to Overweight at Wells Fargo; PT $295
    • Ibotta (IBTA)
      Raised to Buy at Goldman; PT $87
    • SentinelOne (S)
      Raised to Overweight at Piper Sandler; PT $32
    • TC Energy (TRP
      CN) Raised to Overweight at JPMorgan; PT C$69
    • Upstart (UPST)
      Raised to Neutral at Wedbush
  • Downgrades
    • Amer Sports (AS)
      Cut to Equal-Weight at Wells Fargo; PT $19
    • Amgen (AMGN)
      Cut to Hold at Truist Secs; PT $333
    • AppLovin (APP)
      Cut to Neutral at Goldman; PT $150
    • Arcadium Lithium (ALTM)
      Cut to Hold at TD Cowen; PT $5.85
    • ArcBest (ARCB)
      Cut to Hold at TD Cowen
    • AutoZone (AZO)
      Cut to Sell at Goldman; PT $2,917
    • Bridge Investment Group (BRDG)
      Cut to Hold at TD Cowen
    • Canada Goose (GOOS
      CN) Cut to Underweight at Wells Fargo; PT C$12
    • Caterpillar (CAT)
      Cut to Underweight at Morgan Stanley; PT $332
    • Duolingo (DUOL)
      Cut to Market Perform at JMP
    • Expeditors (EXPD)
      Cut to Sell at TD Cowen; PT $106
    • First Busey (BUSE)
      Cut to Equal-Weight at Stephens; PT $27
    • Frontier (FYBR)
      Cut to Neutral at Citi; PT $38.50
    • KeyCorp (KEY)
      Cut to Neutral at Baird; PT $17
    • Kura Oncology (KURA)
      Cut to Hold at Stifel; PT $19
    • Marten Transport (MRTN)
      Cut to Market Perform at Raymond James
    • Tesla (TSLA)
      Cut to Neutral at President Capital Management; PT $245
    • Triumph Group (TGI)
      Cut to Underweight at JPMorgan; PT $12
    • VF Corp (VFC)
      Cut to Underweight at Wells Fargo; PT $15
    • Yelp (YELP)
      Cut to Neutral at Goldman; PT $38
  • Initiations

 

 

 

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

 

 

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