Daily Game Plan

by Contributor
on November 18, 2024

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

TODAY’S ECONOMIC DATA:  8:30ET NY Fed Services Business Activity; 10:00ET NAHB Housing Market Index, Fed’s Goolsbee
speaks; 4:00ET Total Net TIC Flows

Highlights and News:  

  • Spirit Airlines begins bankruptcy proceedings
  • The US authorized Ukraine’s use of long-range missiles to strike Russian territory
  • US pump prices are set to dip below $3 a gallon, a three-year low

 

World stocks inch lower as investors entered the week on a cautious note with inflation risk and political uncertainty weighing on global markets. Investors are waiting
to see if Chinese authorities are inclined to issue more stimulus measures while President-elect Donald Trump’s threat of tariffs looms over the region’s sentiment.  Meanwhile, Chinese leader Xi Jinping told President Biden at a meeting in Peru that he’s ready
to work with Trump to improve the relationship between the world’s biggest economies.       

 

EQUITIES:  

US equity futures are mixed as traders awaited major earning reports this week. Nasdaq is slightly higher after falling every day last week; the first time since August 2019. Tesla shares
jumped in premarket trading on reports that Trump’s transition team is working on ways to relax regulation on self-driving vehicles. Concerns about the path of interest rates continue to weigh on investors’ minds, particularly after Federal Reserve Chair Jerome
Powell said last week that the central bank is not “in a hurry” to cut rates given the economy’s strong growth and a solid labor market. The next major catalyst for the market this week will be Nvidia earnings, which will be released on Wednesday. Earnings
from several major retailers, including Walmart, Target and Ross, are also on deck this week.

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

In pre-market trading, Nvidia (NVDA) shares were down 3% after The Information reported that the company’s next-generation Blackwell chips are facing problems with
overheating when connected together in servers. Tesla (TSLA) traded up more than 8% on reports Trump’s transition team have told advisers they plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities.
Neurogene (NGNE) tumbles 20% after saying it has paused the use of the higher 3E15 vg dose of NGN-401 for the treatment of Rett syndrome. Avis Budget Group (CAR) falls 3% after Northcoast Research downgraded the car-rental company to neutral from buy. Liberty
Energy (LBRT) climbs 6% after President-elect Donald Trump nominated Chris Wright, who runs the Colorado-based oil and natural gas fracking services company, to lead the Energy Department. Newmont (NEM) rises 2% after agreeing to sell Musselwhite for up to
$850 million. Shift4 Payments (FOUR) rises 6% after S&P Dow Jones Indices said the company will replace R1 RCM in the S&P MidCap 400 prior to the opening on Nov. 20. Super Micro Computer (SMCI) climbs 9% as the server maker approaches a deadline to either
file a delayed 10-K annual report or submit a plan to file the form to Nasdaq in order to remain listed on the exchange. Hewlett Packard Enterprise Co. (HPE) is up 2.3%, after Raymond James upgraded the computer hardware and storage company to strong buy from
outperform. Moderna (MRNA) rises 2.4% after the biotech is upgraded to buy from hold at HSBC.

European gauges are mostly lower amid worries around Donald Trump’s policies and after stocks in China failed to hold onto intraday gains. Eurozone and UK inflation
readings due on Tuesday and Wednesday will help investors gauge the outlook for Bank of England and European Central Bank policy. after ending last week with its fourth straight week in the red — the longest losing streak for the index since May 2022. Real
estate and retail stocks declined the most, while food & beverages outperform.  Morgan Stanley strategists today downgraded their stance on European stocks to neutral. Among single stocks, Bavarian Nordic A/S, one of a few companies with an approved mpox vaccine,
rose after an analyst upgrade, while Swedish manufacturer Nibe Industrier AB fell after getting a downgrade. Stoxx 600 -0.35%, DAX -0.3%, CAC -0.2%, FTSE 100 is flat. Food & Bev +0.2%, Media +0.1%. Real Estate -1.3%, Retail -1.1%, Technology -0.9%.

Shares in Asia were mixed as initial advances in China disappeared as traders weigh the outlook for more stimulus measures. The MSCI Asia Pacific Index slipped 0.1%,
Japanese stocks fell to a two week low, while Korean equities rose the most in about two months.  Chinese state-owned companies received a boost early after the country’s securities regulator issued a supportive guideline, urging them to come up with clear
and executable plans to boost their valuation. Chinese property stocks rise as the government plans to expand the scope of shantytown renovations to about 300 cities. Australian uranium mining stocks advance after Russia said it will temporarily limit enriched
supplies of the nuclear fuel to the US. Kospi +2.15%, Philippines +1.3%, Hang Seng Index +0.8%, Thailand +0.7%, ASX 200 +0.2%. Vietnam -0.1%, Sensex -0.3%, Indonesia -0.4%, CSI 300 -0.5%, Taiwan -0.9%, Nikkei 225 -1.1%.

FIXED INCOME: 
 

Treasuries are near lows of the day in early US session, following similar losses in bunds ahead of several speeches by ECB policymakers this week. US curve steepens
as long-end leads losses, pushing 2s10s and 5s30s spreads beyond Friday’s highs. US session has little economic data and no scripted Fed speeches slated.  Yields cheaper by 2bp-5bp across the steeper curve, with 2s10s and 5s30s spreads both ~2.5bp wider on
the day; 10-year around 4.485% is ~5bp higher.

 

 

METALS: 

Gold jumped over 1% following a six day losing streak, while investors await comments from the Federal Reserve officials for clarity on the interest rate trajectory.
Last week gold had its biggest weekly decline in over three years as expectations of less-aggressive interest rate cuts by the Fed boosted the dollar. Goldman Sachs analysts said gold will reach a record $3,000 an ounce by December 2025 due to central-bank
buying and US interest rate cuts. Spot gold +1.2%, Silver +1.8%, Copper +0.2%.

 

 

 

ENERGY:   

 

Oil prices edged up after fighting between Russia and Ukraine intensified over the weekend, although concerns about fuel demand in China and forecasts of a global
oil surplus weighed on markets. Russia unleashed its largest air strike on Ukraine in almost three months on Sunday, causing severe damage to the country’s power system. In a significant reversal of Washington’s policy in the conflict, President Biden’s administration
has allowed Ukraine to use US-made weapons to strike deep into Russia, two US officials said on Sunday. WTI +0.5%, Brent +0.6%, US Nat Gas +1.7%, RBOB +0.7%.

 

 

 

CURRENCIES: 

In currency markets, the Japanese yen weakened after Bank of Japan Governor Kazuo Ueda avoided giving a clear hint that he will raise interest rates at a December
meeting. The dollar traded mixed versus its Group-of-10 peers and in tight ranges while flows were rather muted. Data calendar is rather thin this week, with PMI releases Friday standing out. US$ Index +0.02%, GBPUSD +0.05%, EURUSD +0.1%, USDJPY +0.6%, AUDUSD
-0.1%, NZDUSD -0.6%, USDCHF -0.02%, USDNOK +0.2%. 

 

 

 

Spot Bitcoin +1.3%, Spot Ethereum -0.2%. Bitcoin fell almost 3% over Saturday and Sunday before rising back to $92,000 on Monday morning. Trump has made various pro-crypto
pledges, but there are open questions about the timetable for implementation and whether all are feasible — such as setting up a US Bitcoin stockpile.

 

 

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
    • Air Products (APD) Raised to Buy at UBS; PT $375
    • Amylyx Pharmaceuticals (AMLX) Raised to Outperform at Baird; PT $11
    • Autolus Therapeutics (AUTL) ADRs Raised to Buy at Goldman; PT $7.60
    • Bright Horizons (BFAM) Raised to Outperform at BMO; PT $125
    • CVS (CVS) Raised to Overweight at Wells Fargo
    • Franco-Nevada (FNV CN) Raised to Buy at Canaccord; PT C$190
    • Futu Holdings (FUTU) ADRs Raised to Overweight at Morgan Stanley
    • HP Enterprise (HPE) Raised to Strong Buy at Raymond James; PT $29
    • MBIA (MBI) Raised to Outperform at KBW; PT $9
    • Moderna (MRNA) Raised to Buy at HSBC; PT $58
    • Monolithic Power (MPWR) Raised to Buy at Loop Capital; PT $660
    • Robinhood (HOOD) Raised to Buy at Needham; PT $40
    • Roku (ROKU) Raised to Outperform at Baird; PT $90
    • SmartCentres REIT (SRU-U CN) Raised to Buy at TD Cowen; PT C$28
    • United Fire (UFCS) Raised to Neutral at Piper Sandler; PT $26
  • Downgrades
    • AN2 Therapeutics (ANTX) Cut to Hold at TD Cowen
    • Avis Budget (CAR) Cut to Neutral at Northcoast
    • Biogen (BIIB) Cut to Hold at Needham
    • Charles River (CRL) Cut to Underperform at CLSA; PT $164
    • EOG Resources (EOG) Cut to Neutral at Piper Sandler; PT $149
    • Eyenovia (EYEN) Cut to Neutral at HC Wainwright; PT $2
    • FB Financial (FBK) Cut to Market Perform at Hovde Group; PT $60
    • Matson (MATX) Cut to Peerperform at Wolfe
    • Mattr Corp (MATR CN) Cut to Sector Perform at ATB Capital; PT C$18
    • National Bank Holdings (NBHC) Cut to Market Perform at Hovde Group
    • Pinnacle Financial (PNFP) Cut to Market Perform at Hovde Group; PT $135
    • Pinnacle West Capital (PNW) Cut to Equal-Weight at Barclays; PT $91
    • Redfin (RDFN) Cut to Sell at Goldman; PT $6.50
    • South Bow (SOBO CN) Cut to Sector Perform at Peters & Co; PT C$36
    • Spero Therapeutics (SPRO) Cut to Hold at TD Cowen
  • Initiations
    • Akero Therapeutics (AKRO) Rated New Buy at Citi; PT $65
    • Astera Labs (ALAB) Rated New Buy at Citi; PT $120
    • Capricor Therapeutics (CAPR) Rated New Buy at JonesTrading; PT $40
    • CrowdStrike (CRWD) Rated New Market Perform at CICC; PT $295
    • Engene Holdings (ENGN) Rated New Market Outperform at JMP; PT $18
    • Erasca (ERAS) Rated New Buy at Jefferies; PT $6
    • GATX (GATX) Rated New Buy at Goldman; PT $185
    • Home Depot (HD) Rated New Buy at Sealand Securities
    • Ingram Micro (INGM) Rated New Outperform at Raymond James; PT $28
      • Rated New Inline at Evercore ISI; PT $27
      • Rated New Outperform at RBC; PT $26
      • Rated New Buy at Loop Capital; PT $30
      • Rated New Neutral at BNPP Exane; PT $25
      • Rated New Buy at Deutsche Bank; PT $26
      • Rated New Buy at Redburn; PT $30
      • Rated New Equal-Weight at Morgan Stanley; PT $24
      • Rated New Buy at Goldman; PT $33
      • Rated New Buy at Stifel; PT $28
      • Rated New Buy at Jefferies; PT $28
    • Kanzhun (BZ) ADRs Reinstated Outperform at CLSA; PT $18
    • Korro Bio, Inc. (KRRO) Rated New Buy at JonesTrading; PT $130
    • Netflix (NFLX) Rated New Buy at Mirae Asset Securities; PT $1,184
    • Penguin Solutions Inc (PENG) Rated New Market Outperform at JMP; PT $23
    • TechnipFMC (FTI) Reinstated Outperform at RBC; PT $37
    • Trinity Industries (TRN) Rated New Neutral at Goldman; PT $39
    • VYNE Therapeutics Inc (VYNE) Rated New Buy at BTIG; PT $8
    • Y-mAbs (YMAB) Rated New Outperform at Oppenheimer; PT $23

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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