Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:45ET S&P Global US Manufacturing and Services PMIs; 10:00ET U. of Michigan Sentiment;
11:00ET Kansas City Fed Services Activity

Highlights and News:  

• German Private Sector Slides Deeper Into Contraction on Services
• Putin says Ukraine war is going global
• Republicans widen Senate majority after Democrat concedes Pennsylvania race
• Ukraine’s military said its drones struck four oil refineries, radar stations and other military installations in Russia

World stocks fluctuated after a slew of economic data, underpinned by very weak French, German and UK PMI figures. French composite PMI came in at 44.8 a lot weaker
than expectations of 48.3. German composite also softer at 47.3 versus consensus of 48.7. Both have seen the pace of contraction quicken, and Germany has seen business activity fall for the fifth month in a row. The gauge of business activity for the euro
area as a whole also shrank unexpectedly.  The composite Purchasing Managers’ Index slid to 48.1 from 50 in October, dipping back beneath the level that separates growth from contraction. Next week’s key events include interest rate decisions in South Korea
and New Zealand. Investors will also watch the Fed’s preferred inflation gauge, the PCE index, before the Thanksgiving holiday and “Black Friday” start of the US holiday shopping season. President Putin said that the Ukraine war was escalating towards a global
conflict after the United States and Britain allowed Ukraine to hit Russia with their weapons, and warned the West that Moscow could strike back.   

EQUITIES:  

US equity futures are mixed, as investors look to other regions for better value following this month’s rally. Nvidia slid in premarket trading as swings in the chipmaker’s shares continued
following an outlook that missed some of Wall Street highest expectations.  Investors’ focus will turn toward US business activity data this morning to gauge the strength of the economy and the Federal Reserve’s path for interest rates. Traders see just above
a 50-50 chance for a cut in December after almost fully pricing in a reduction at the beginning of the month. 

Futures ahead of the bell: E-Mini S&P -0.05%, Nasdaq -0.1%, Russell 2000 +0.4%, DJI +0.1%. 

In pre-market trading, Alphabet (GOOGL) slips less than 1% after the Information reported that OpenAI is considering developing a web browser. Elastic (ESTC) soars
27% after the software company raised its full-year forecast. Gap (GAP) jumps 15% after raising its full-year outlook as the apparel retailer attracts wealthier shoppers seeking value. Intuit (INTU) falls 4% after the maker of the TurboTax tax preparation
software provided a sales and profit outlook for the current quarter that fell short of analysts’ estimates. NetApp (NTAP) climbs 6% as the tech-hardware firm boosted guidance following an earnings beat. Ross Stores (ROST) gains 7% after the discount retailer
lifted annual projections for earnings per share.

ORCL relative to XLK: momentum is extended but still a lot of room for upside…

European gauges are rising, lifted by gains in defensive stocks and bets for more interest-rate cuts from the European Central Bank after euro-area business activity
unexpectedly shrank in November.  The Stoxx Europe 600 Index is nearing early session highs, with real estate, utilities and health care names outperforming. Banks sector largely underperforms with data showing a fall in business activity boosted the market-implied
odds of a half-point rate cut to nearly 60%. Spanish lenders are particularly weak, after the government raised the maximum rate of a windfall tax on the sector. Among individual movers, Thales SA fell 7% with the French aerospace and defense supplier under
investigation by UK and French prosecutors for suspected bribery and corruption. On the plus side, Games Workshop Group Plc surged to a record high, after a strong trading update. Stoxx 600 +0.8%, DAX +0.4%, CAC +0.2%, FTSE 100 +1%. Real Estate +2.8%, Healthcare
+2%, Retail +2%, Utilities +2%, Media +1.9%. Banks -2.3%.

Shares in Asia were mixed to higher, with gains in India and Taiwan countering weakness in China. The MSCI Asia Pacific Index climbed 0.3% as Australian stocks hit
a record high. Key gauges dropped in mainland China and Hong Kong, as Baidu’s sales decline triggered a selloff in major internet names. Disappointing corporate earnings weighed on sentiment in China.  Chinese cross-border e-commerce stocks rose after the
nation’s Ministry of Commerce issues measures targeting promoting stable growth in trade. Singapore third-quarter gross domestic product expanded 5.4% from a year ago, notably outpacing the revised 3.0% in the prior quarter. Sensex +2.5%, Taiwan +1.5%, ASX
200 +0.8%, Kospi +0.8%, Indonesia +0.8%, Nikkei 225 +0.7%, Singapore +0.2%. Philippines -1.2%, Hang Seng Index -1.9%, CSI 300 -3.1%.

FIXED INCOME: 
 

Treasuries advance across the curve, following a bigger bull-steepening move in German bonds after euro-area PMIs missed analysts’ estimates. Two-year German bonds
led gains, sending the yield down 13 basis points to 1.98%, the lowest since 2022. Traders also raised bets on the extent of rate cuts through next year, with about 150 basis points expected. US yields lower by 3bp-4bp across maturities, leaving curve spreads
within 1bp of Thursday’s close. 10-year around 4.39%. US session also includes PMI readings along with University of Michigan sentiment gauge.

METALS: 

Gold rose over 1% to hit a two-week peak, heading for the best weekly performance in more than a year, buoyed by safe-haven demand as Russia-Ukraine tensions intensified.
Bullion rose despite the US dollar hitting a 13-month high. Gold hit a new all-time high in euros and pounds. Spot gold +1.1%, Silver +1.4%, Copper -1%.

ENERGY:   

Oil prices eased but are still headed for the biggest weekly gain since early October on an escalation of hostilities between Russia and Ukraine. Ukraine’s military
said its drones struck four oil refineries, radar stations and other military installations in Russia. Oil pared some earlier gains as the dollar pulled higher. Global oil markets are on track for a “large” surplus of 1.3m b/d next year even if OPEC+ prolongs
supply curbs, JPMorgan analysts said in a report. Donald Trump’s return to US presidency “presents downside risks to oil prices from deregulation and increased US production,” but also upside in the form of pressure on exports from Iran and Venezuela. WTI
-0.5%, Brent -0.5%, US Nat Gas -2.3%, RBOB -0.8%.

CURRENCIES: 

In currency markets, the euro pares a drop after tumbling to the lowest level in about two years versus the dollar on growth concerns. Today’s data showed business
activity in the bloc’s two biggest economies contracted more than expected. The market-implied odds of a half-point rate cut next month jumped to more than 50%, from about 15% on Thursday. Traders are increasingly betting the currency could extend its slide
toward parity against the dollar — something that’s only happened twice since it was launched in 1999. The dollar rose and remained on course for an eighth straight week of gains as signs of escalation in the war in Ukraine fueled demand for haven assets. 
Sterling fell as UK PMI data showed private sector stagnating.  A closely-watched survey showed firms gave a “clear thumbs down” to UK Chancellor Rachel Reeves’ fiscal plans. US$ Index +0.5%, GBPUSD -0.65%, EURUSD -0.65%, USDJPY -0.02%, AUDUSD -0.2%, NZDUSD
-0.3%, USDCHF +0.4%, USDNOK +0.3%. 

Spot Bitcoin +0.5%, Spot Ethereum -0.1%. TRUMP’S ‘CRYPTO ADVISORY COUNCIL’ EXPECTED TO SETUP PROMISED BITCOIN RESERVE: REUTERS. Securities and Exchange Commission
Chair Gary Gensler decided to step down in January. His tenure was marked by a flurry of crypto enforcement actions, which the industry expects will peter out under Trump. 

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
• AbbVie (ABBV) Raised to Outperform at Leerink; PT $206
• ASGN (ASGN) Raised to Outperform at BMO; PT $100
• Bright Horizons (BFAM) Raised to Outperform at Baird; PT $140
• Coca-Cola Femsa (KOFUBL MM) ADRs Raised to Outperform at Grupo Santander
• Elastic (ESTC) Raised to Outperform at Baird; PT $135
• Flowserve (FLS) Raised to Outperform at RBC; PT $69
• KinderCare Learning (KLC) Raised to Outperform at Baird; PT $30
• Pebblebrook (PEB) Raised to Buy at Stifel; PT $15
• RBC Bearings (RBC) Raised to Overweight at KeyBanc; PT $375
• Sonic Automotive (SAH) Raised to Buy at Seaport Global Securities
• Waystar (WAY) Raised to Strong Buy at Raymond James
• XPeng (XPEV) ADRs Raised to Buy at China Renaissance; PT $16.70
• Downgrades
• Atkore (ATKR) Cut to Neutral at B Riley; PT $84
• Baidu (BIDU) ADRs Cut to Equal-Weight at Barclays; PT $83
• Community Health (CYH) Cut to Underperform at Raymond James
• DiamondRock Hospitality (DRH) Cut to Hold at Stifel; PT $10.25
• Enel Chile (ENELCHIL CI) ADRs Cut to Sector Perform at Scotiabank; PT $3.90
• European Wax (EWCZ) Cut to Neutral at Citi; PT $5.50
• Grab Holdings (GRAB) Cut to Underperform at BofA; PT $4.90
• HCA Healthcare (HCA) Cut to Market Perform at Raymond James
• Innovid (CTV) Cut to Hold at Needham
• Cut to Market Perform at JMP
• Palo Alto Networks (PANW) Cut to Reduce at HSBC; PT $291
• PDD (PDD) ADRs Cut to Hold at China Merchants; PT $111
• ADRs Cut to Hold at DBS Bank; PT $102
• Root (ROOT) Cut to Market Perform at JMP
• Sunrun (RUN) Cut to Neutral at Piper Sandler; PT $11
• Tenet (THC) Cut to Outperform at Raymond James
• Timken (TKR) Cut to Sector Weight at KeyBanc
• TransMedics (TMDX) Cut to Hold at Needham
• Initiations
• Aecom (ACM) Reinstated Buy at Goldman; PT $130
• Allegro MicroSystems (ALGM) Reinstated Overweight at Wells Fargo
• Amphastar (AMPH) Rated New Overweight at Wells Fargo; PT $55
• Analog Devices (ADI) Rated New Equal-Weight at Wells Fargo; PT $220
• ARM Holdings (ARM) ADRs Rated New Overweight at Wells Fargo; PT $155
• Aya Gold & Silver Inc (AYA CN) Rated New Outperform at CIBC; PT C$24
• Cadence Design (CDNS) Rated New Overweight at Wells Fargo; PT $350
• Carpenter Tech (CRS) Rated New Overweight at JPMorgan; PT $220
• Cloudflare (NET) Reinstated Buy at William O’Neil
• CPI Card (PMTS) Rated New Buy at DA Davidson; PT $36
• Crocs (CROX) Rated New Buy at Needham
• Datadog (DDOG) Reinstated Buy at William O’Neil
• Deckers Outdoor (DECK) Rated New Buy at Needham; PT $218
• Foot Locker (FL) Rated New Buy at Needham; PT $27
• Janux Therapeutics (JANX) Rated New Outperform at Leerink; PT $79
• Lululemon (LULU) Rated New Hold at Needham
• MaxLinear (MXL) Rated New Equal-Weight at Wells Fargo; PT $14
• Monolithic Power (MPWR) Reinstated Equal-Weight at Wells Fargo; PT $610
• NGEx Minerals (NGEX CN) Rated New Outperform at National Bank; PT C$17
• Nike (NKE) Rated New Buy at Needham; PT $84
• NXP Semi (NXPI) Reinstated Overweight at Wells Fargo; PT $250
• On Holding (ONON) Reinstated Buy at Needham; PT $64
• ON Semi (ON) Reinstated Overweight at Wells Fargo; PT $85
• Quinsam Opportunities I (VHI CN) Rated New Buy at TD Cowen; PT C$13
• Skechers USA (SKX) Rated New Hold at Needham
• Steven Madden (SHOO) Rated New Hold at Needham
• Synopsys (SNPS) Rated New Equal-Weight at Wells Fargo; PT $570
• TechnipFMC (FTI) Rated New Buy at William O’Neil
• Texas Instruments (TXN) Rated New Equal-Weight at Wells Fargo; PT $215
• UMB Financial (UMBF) Rated New Sector Perform at RBC; PT $130
• Under Armour (UAA) Rated New Hold at Needham
• Viking Therapeutics (VKTX) Rated New Buy at B Riley; PT $109
• Zegna Group (ZGN) Rated New Underweight at Morgan Stanley; PT $7.20

Data sources: Bloomberg, Reuters, CQG

David Wienke