Daily Game Plan

by Contributor
on November 5, 2024

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

TODAY’S ECONOMIC DATA:  8:30ET Trade Balance; 9:45ET S&P Global US Services PMI; 10:00ET ISM Services Index; 1:00ET
10-Year Auction

Highlights and News:  

  • Boeing workers voted to accept a new labor contract
  • China’s services activity grew at fastest pace in three months
  • Harris campaign indicated election results may not come for days
  • North Korea fired multiple short-range ballistic missiles off its east coast

 

World stocks gained ahead of a high-stakes US presidential election. Close attention also remains on which party dominates Congress. Beyond the election, the Fed
and some of its world peers are expected to lower borrowing costs later this week. Meanwhile, sentiment in China was helped by a proposal to lift local governments’ debt ceiling to swap out their hidden debt. Also boosting the mood was a private survey that
showed China’s service activity expanded at the fastest pace since July. The National People’s Congress is meeting this week, with widespread market anticipation for the approval of additional fiscal stimulus measures. Australia’s central bank kept rates unchanged
at a 13-year high of 4.35%, as expected, and indicated they will be restrictive for the next meeting.      

 

EQUITIES:  

US equity futures make small gains overnight as investors prepared for the US presidential election results and a probable interest rate cut from the Federal Reserve later this week.
The Harris campaign indicated election results may not come for days.  US stocks on average rally into and after an election, until the inauguration in January when that trend fades. Investors could rotate back into European stocks and out of US peers if Harris
wins, pressuring US equities, according to RBC Capital Markets strategists.  In corporate news, Boeing workers voted to accept a new labor contract and end a strike that’s crippled jetliner production for 53 days. 

Futures ahead of the bell: E-Mini S&P +0.1%, Nasdaq +0.3%, Russell 2000 ~flat, DJI +0.05%. E-Mini S&P is holding above the July high…

In pre-market trading, Palantir (PLTR) climbs 14% after the data-analysis software company reported quarterly revenue that beat estimates and raised its forecast. Archer-Daniels-Midland
(ADM) drops 6% after saying it will amend previous financial statements after finding additional accounting issues, prompting the company to cancel its quarterly earnings call with analysts 14 hours before its start. Astera Labs (ALAB) surges 24% after the
company posted strong 3Q results. Boeing (BA) rises 1% as workers voted to accept a new labor contract and end a strike. Celanese (CE) slides 18% as the chemical company’s 4Q profit guidance disappoints following “severely constrained demand” in the 3Q. Dollar
Tree (DLTR) advances 4% after the company appointed COO Michael Creedon as interim CEO. Hims & Hers (HIMS) climbs 7% after the telehealth platform reported quarterly revenue. Lattice Semi (LSCC) tumbles 14% after the chipmaker provided a weak 4Q revenue forecast.
Marqeta (MQ) plunges 38% after the payments platform’s weak guidance spurred price target cuts. NXP Semi (NXPI) falls 6% after giving a disappointing forecast for fourth-quarter sales and earnings. QuinStreet (QNST) rises 30% after the company boosted its
revenue guidance for the full year. Wynn Resorts (WYNN) slips 2% after the casino operator reported quarterly results.

European gauges traded steady with miners and insurance companies outperforming, while autos and healthcare lag. Among individual names, Vestas Wind Systems A/S dropped
after saying it expects full-year earnings at the lower end of its guided range. Carrefour SA advanced as the French grocer is studying ways to boost its valuation. Associated British Foods Plc gained as annual profit jumped and the British conglomerate launched
another share buyback program.  Stoxx 600 ~flat, DAX +0.1%, CAC +0.1%, FTSE 100 ~flat. Basic Resources +0.6%, Insurance +0.5%, Media +0.5%. Autos -1.3%, Healthcare -0.6%. 

Shares in Asia climbed, buoyed by a jump in Chinese equities amid expectations for more stimulus and encouraging economic data. The MSCI Asia Pacific Index rose 0.6%,
with TSMC, Tencent and Alibaba among the biggest contributors to gains. Chinese gauges were the best performers in the region, with the onshore CSI 300 Index seeing its best day in more than two weeks. The Caixin/S&P Global services purchasing managers’ index
climbed to 52.0 in October, up from 50.3 in September. Stocks rebounded in Japan as markets reopened after a holiday. South Korea’s benchmark underperformed, even after the country’s consumer inflation in October rose 1.3% from a year ago, slightly cooler
than expected. Shares in Australia were also lower after the RBA held rates steady for the eighth meeting in a row. Hang Seng Tech +3.6%, CSI 300 +2.5%, Hang Seng Index +2.1%, Philippines +1.7%, Thailand +1.3%, Nikkei 225 +1.1%, Sensex +0.9%, Taiwan +0.6%.
Kospi -0.5%, ASX 200 -0.4%. 

FIXED INCOME: 
 

Treasuries are slightly weaker amid bigger declines for European bonds after UK 10-year bond sale drew weakest demand in almost a year. US yields are 2bp-4bp cheaper
across a slightly steeper curve; 10-year around 4.32% is ~3.2bp higher. Today’s $42 billion 10-year new-issue auction follows soft demand for Monday’s 3-year note sale. Traders are pricing in 98% odds of a quarter-point cut on Thursday, according to CME Group’s
FedWatch Tool. 

 

 

METALS: 

Gold traded in a narrow range as investors stayed away from taking big positions ahead of the US presidential election and the Federal Reserve policy meeting later
this week. While prices have been relatively stable so far today, previous US elections have seen sharp swings. With polls suggesting a photo-finish result, the risk of a disputed outcome means that the vote count could drag on for days or even weeks. Copper
rose for a third day on positive Chinese economic data. Spot gold ~flat, Silver +0.6%, Copper +0.7%.

 

 

ENERGY:   

 

Oil prices traded in a narrow range ahead of what is expected to be an exceptionally close US presidential election, after rising more than 2% in the previous session.
The election, along with the Federal Reserve’s policy meeting and China’s National People’s Congress, has led to cautious trading. Tropical Storm Rafael formed in the Caribbean, sparking evacuations from offshore oil and natural gas platforms in the Gulf of
Mexico. OPEC oil output rebounded in October as Libya resumed output, a Reuters survey found. WTI +0.6%, Brent +0.5%, US Nat Gas +0.7%, RBOB +1%.

 

 

CURRENCIES:   

In currency markets, the dollar trades lower versus all Group-of-10 peers except the yen. Democratic Party for the People leader Yuichiro Tamaki said Bank of Japan
monetary policy should stay on hold a while longer. Japan will be in particular focus as votes are counted in the US, given the heavy focus on the dollar-yen currency pair. The yen shed some of its gains after surging as much as 1% in the previous session.
The Aussie$ outperforms after the RBA kept its key interest rate unchanged. US$ Index -0.1%, GBPUSD +0.2%, EURUSD +0.2%, USDJPY +0.1%, AUDUSD +0.6%, NZDUSD +0.4%, USDCHF -0.15%.

 

 

 

Spot Bitcoin +2.5%, Spot Ethereum +2.8%.

 

 

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
    • Alkermes (ALKS) Raised to Buy at Stifel; PT $36
    • Argenx (ARGX BB) ADRs Raised to Sector Outperform at Scotiabank; PT $715
    • Century Casinos (CNTY) Raised to Market Outperform at JMP; PT $5
    • Chevron (CVX) Raised to Buy at DZ Bank; PT $170
    • Disc Medicine Inc (IRON) Raised to Overweight at Morgan Stanley; PT $85
    • EBay (EBAY) Raised to Outperform at Bernstein; PT $70
    • HomeStreet (HMST) Raised to Outperform at Wedbush; PT $12
    • InterRent REIT (IIP-U CN) Raised to Buy at Canaccord; PT C$13
    • MasTec (MTZ) Raised to Buy at Truist Secs; PT $173
  • Downgrades
    • Affiliated Managers (AMG) Cut to Hold at TD Cowen; PT $177
    • Air Transport (ATSG) Cut to Hold at Loop Capital; PT $22.50
    • BCE (BCE CN) Cut to Hold at Edward Jones
      • Cut to Hold at Canaccord; PT C$41
    • Celanese (CE) Cut to Equal-Weight at Wells Fargo; PT $115
    • Cognex (CGNX) Cut to Hold at Truist Secs; PT $43
    • Dollar Tree (DLTR) Cut to Market Perform at Telsey; PT $75
    • Ideaya Biosciences (IDYA) Cut to Market Perform at Leerink; PT $27
    • Marqeta (MQ) Cut to Equal-Weight at Wells Fargo; PT $5
      • Cut to Market Perform at William Blair
      • Cut to Sector Weight at KeyBanc
    • Neumora Therapeutics (NMRA) Cut to Neutral at JPMorgan; PT $15
    • Retail Opportunity (ROIC) Cut to Sector Weight at KeyBanc
    • Sana Biotech (SANA) Cut to Market Perform at JMP
    • Schneider Electric (SU FP) ADRs Cut to Hold at Berenberg; PT $55.40
    • Tactile Systems (TCMD) Cut to Neutral at BTIG
      • Cut to Market Perform at Oppenheimer
    • Verrica Pharma (VRCA) Cut to Sector Perform at RBC; PT $2
  • Initiations
    • Alarm.com (ALRM) Rated New Buy at Jefferies; PT $65
    • Bicara Therapeutics (BCAX) Rated New Buy at Rodman & Renshaw; PT $48
    • CAMP4 Therapeutics (CAMP) Rated New Outperform at William Blair
      • Rated New Outperform at Leerink; PT $17
      • Rated New Overweight at Piper Sandler; PT $18
      • Rated New Overweight at JPMorgan; PT $23
    • Ceribell (CBLL) Rated New Outperform at William Blair
      • Rated New Buy at TD Cowen; PT $31
      • Rated New Buy at Canaccord; PT $30
      • Rated New Overweight at JPMorgan; PT $32
    • CMS Energy (CMS) Rated New Buy at Jefferies; PT $76
    • Coinbase (COIN) Rated New Buy at CMB International; PT $250
    • Eaton Corp (ETN) Rated New Outperform at Bernstein; PT $382
    • First Solar (FSLR) Rated New Neutral at Seaport Global Securities
    • Geron (GERN) Rated New Buy at HC Wainwright; PT $8
    • Goeasy (GSY CN) Rated New Buy at Jefferies; PT C$228
    • Hubbell (HUBB) Rated New Outperform at Bernstein; PT $535
    • Krispy Kreme (DNUT) Resumed Equal-Weight at Morgan Stanley; PT $14
    • MoonLake Immunotherapeutics (MLTX) Reinstated Outperform at Wedbush
    • MSA Safety (MSA) Rated New Buy at B Riley; PT $200
    • Novonix (NVX AU) ADRs Rated New Buy at Jefferies; PT $2.60
    • Protagonist Therapeutics (PTGX) Rated New Outperform at Wedbush; PT $58
    • Rezolute (RZLT) Rated New Outperform at Wedbush; PT $12
    • Sable Offshore (SOC) Rated New Buy at Johnson Rice; PT $30
    • Upstream Bio (UPB) Rated New Buy at TD Cowen
      • Rated New Outperform at William Blair
      • Rated New Overweight at Piper Sandler; PT $75
      • Rated New Overweight at JPMorgan; PT $38
    • Zenas Biopharma (ZBIO) Rated New Buy at Rodman & Renshaw; PT $34

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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