Daily Game Plan

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

DATA/HEADLINES   8:15ET ADP Employment Change; 9:45ET S&P Global US Services PMI, Composite PMI; 10:00ET Factory
Orders, Durable Goods Orders, Cap Goods, ISM Services Index; 10:25ET Fed’s Bowman speaks; 10:30ET Fed’s Goolsbee speaks (and at 3 p.m.)

ADP Report:
Added 89k Jobs in Sept. (exp. 150k); September Showed Slowest Pace of Job Growth Since January 2021; September Annual Pay Up 5.9%

TODAY’S HIGHLIGHTS:  

• Millennium is in talks to invest billions of dollars with rival Schonfeld as part of a partnership deal
• UK GOVERNMENT: WE WILL END CIGARETTE SALES TO THOSE BORN ON OR AFTER  JANUARY 1, 2009

The global financial rout takes a pause as bond yields found firmer footing and the dollar weakened from a 10-month high. An unrelenting selloff in world government
bond markets pushed US 30-year Treasury yields to 5% for the first time since 2007 and Germany’s 10-year borrowing costs to 3%, moves that could quicken a global economic slowdown. With the rout spreading, Australian and Canadian 10-year bond yields have surged
over 50 bps each so far this week, and British 30-year government bond yields hit a fresh 25-year high above 5% on Wednesday. High interest rates and borrowing that ballooned in recent years have left a range of developing economies mired in debt crises. Helping
them claw out of this will be a key agenda item at the annual IMF and World Bank meetings which kicks off next week.

EQUITIES: 

US equity futures fluctuated before the ADP print gives a lift. S&P 500 futures are up 0.2% after dropping to a four-month low on Tuesday. Ford offered striking workers a more than 20%
wage increase and said it would halve the time it takes new employees to reach top pay. More than 75,000 workers are preparing for the largest health care strike in US history today after talks between Kaiser Permanente and a coalition of unions so far failed
to produce a resolution. The three-day walkout may interrupt services for almost 13 million people.  Looking ahead, traders will watch for the impact of the House’s ouster of Kevin McCarthy as Speaker and monthly US payrolls due Friday. McCarthy’s removal
as House speaker adds to market turmoil, with political uncertainty increasing the risk of a US ratings downgrade, strategists said. The next speaker will probably be “under even more pressure” than McCarthy was on funding issues, Goldman said. The House is
expected to hold elections October 11.

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.4%, Russell 2000 +0.1%, Dow +0.1%.

In pre-market trading, Apple (AAPL) falls 0.9% as it was downgraded at KeyBanc. Brooge Energy (BROG) rose as much as 27% after the company confirmed receipt of an acquisition offer from
Gulf Navigation Holdings. Netflix (NFLX +0.4%); analysts are unsurprised by a report that the streaming-video company plans to raise the price of its ad-free subscriber tier. Sunrun Inc. (RUN) and Sunnova Energy International Inc. (NOVA) fall over 3% as both
were downgraded to hold from buy at Truist Securities. 

European gauges reversed early losses to trade slightly higher as Germany’s benchmark government bond interest rate mildly cooled from Tuesday spikes. Retail sales in the euro zone fell
much more than expected in August, official data showed, pointing to weaker consumer demand. HCOB’s final Composite PMI nudged up to 47.2 in September from August’s 46.7, but remains in contraction, as output declined in both services and manufacturing. German
service sector activity edged up in September but in France the industry shrank at the fastest rate in almost three years. In individual stock moves today, airline SAS AB fell as much as 96% after the bankrupt Scandinavian carrier announced plans to be taken
private. Tesco Plc rallied more than 3% after Britain’s biggest grocer increased its profit forecast.  Stoxx 600 +0.3%, DAX +0.2%, CAC +0.4%, FTSE 100 -0.1%. Utilities outperform, +1.3%, Media +1.2%, Food & Bev +1%, REITs +0.6%. Energy and Retail lag, down
1.1%.  

Asian stocks tumbled, with several local benchmarks nearing correction territory, as strong US jobs data intensified concerns over higher-for-longer interest rates. The MSCI Asia Pacific
Index fell 1.6%, taking its decline from the July high to more than 10%. Tech and consumer discretionary stocks were among the biggest drags as a global bond selloff drove Treasury yields to the highest levels in more than a decade. South Korea’s Kospi was
among the region’s worst performers, falling more than 2%, as traders returned from a holiday. Japan’s Topix was the worst performer, while New Zealand stocks erased losses after the central bank kept interest rates unchanged. Thailand’s SET eked out a gain
of 0.25%.Topix -2.5%, Kospi -2.4%, Singapore -1.4%, Taiwan -1.1%, Hang Seng -0.8%, ASX 200 -0.8%, Sensex -0.4%.

FIXED INCOME: 
 

The yield on the benchmark 10-year note reached 4.88% today before the selloff paused, after jumping over 30 basis points this week.  30-year yields touched 5% for
the first time since the global financial crisis. Analysts said the move higher in inflation-adjusted real yields was especially tough for corporate borrowers. US 10-YEAR TREASURY YIELDS FALL TO SESSION LOW OF 4.733% AFTER ADP JOBS DATA.  

METALS: 
   

Gold steadied around its lowest level in almost seven months, helped somewhat by a slightly lower dollar. Traders are looking ahead to a monthly jobs report due Friday. Later today, investors
will look to a slew of purchasing managers indexes to gauge the health of the US economy. Spot gold is up 0.4% after the ADP data. Spot silver jumped 1% after the print.   

ENERGY:  

Oil fell as pledges by Saudi Arabia and Russia to continue crude output cuts were offset by demand fears stemming from macroeconomic headwinds. Brent crude has jumped
towards $100 a barrel, the highest since 2022, as tighter supply due partly to OPEC+ output cuts and rising demand outweigh concern about stubborn inflation and weaker economic growth. OPEC+ is unlikely to tweak its current oil output policy when a panel meets
today, three sources said, as Saudi Arabia and Russia said they would keep voluntary supply cuts in place to support the market.  Earlier today, Saudi Arabia said it would continue with a voluntary cut of 1 million barrels per day until the end of 2023, while
Russia said it will keep a 300,000 bpd voluntary export curb until the end of December. WTI -1.75%, Brent -1.7%, US Nat Gas +1.1%, RBOB -1.8%.          

CURRENCIES:   

The selloff in global bond markets continues to set the tone in major currencies. The dollar slipped for the first time this week, after closing at its highest level
since late November.  New Zealand’s central bank held rates steady as policymakers were more confident that past hikes were working to bring down inflation, sending the kiwi skidding as markets pared bets of any further tightening. The RBNZ kept the cash rate
at a 15-year high at 5.5% and said policy needs to remain restrictive to bring inflation down.  Japanese authorities refrained from disclosing whether they had stepped into the market to prop up the yen and stressed their resolve to act against excess volatility.
The yen strengthened sharply on Tuesday, leading traders to believe Tokyo had intervened. US$ Index -0.2%, GBPUSD +0.4%, EURUSD +0.3%, NZDUSD -0.1%, USDCHF -0.4%, AUDUSD +0.3%, USDJPY ~ flat.

Bitcoin +0.7%, Ethereum -0.6%.    

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
• (HUBG) Hub Group Raised to Outperform at Wolfe; PT $98
• (KEY) KeyCorp Raised to Peerperform at Wolfe
• (LTH) Life Time Group Raised to Equal-Weight at Wells Fargo; PT $17
• (LYB) LyondellBasell Raised to Buy at Citi
• (MATX) Matson Raised to Outperform at Wolfe; PT $113
• (OLPX) Olaplex Raised to Equal-Weight at Barclays; PT $2
• (PCG) PG&E Raised to Buy at CFRA; PT $18
• Downgrades
• (AAPL) Apple Cut to Sector Weight at KeyBanc
• (ASB) Associated Banc Cut to Equal-Weight at Wells Fargo
• (BANC) Banc of California Cut to Equal-Weight at Wells Fargo; PT $13.50
• (BGS) B&G Foods Cut to Underweight at Piper Sandler; PT $8
• (FHN) First Horizon Cut to Equal-Weight at Wells Fargo
• (FIBK) First Interstate Banc Cut to Equal-Weight at Wells Fargo
• (NMRK) Newmark Cut to Market Perform at Raymond James
• (ON) ON Semi Cut to Neutral at BNPP Exane; PT $95
• (PNT) Point Biopharma Cut to Neutral at Guggenheim; PT $12.50
• (PNT) Cut to Hold at JonesTrading
• (PNT) Cut to Hold at Jefferies; PT $12.50
• (PPL) PPL Cut to Neutral at UBS; PT $25
• (R) Ryder Cut to Peerperform at Wolfe
• (TSE) Trinseo Cut to Hold at Jefferies; PT $9
• Initiations
• (ASCU CN) Arizona Sonoran Copper Rated New Buy at Eight Capital; PT C$3.90
• (AU) Anglogold Ashanti Reinstated Sector Perform at RBC; PT $17
• (BRAG CN) Bragg Gaming Group Inc Rated New Buy at Paradigm Capital
• (DTM) DT Midstream Rated New Buy at Stifel; PT $60

Data sources: Bloomberg, Reuters, CQG