Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Philadelphia Fed Non-Manufacturing Activity; 9:00ET FHFA House Price Index; 10:00ET
Conf. Board Consumer Confidence, New Home Sales,
Richmond Fed Manufact. Index; 10:30ET Dallas Fed Services Activity; 1:00ET $28 billion 2-year FRN Reopening and $70 billion 5-year note auction;  2:00ET FOMC Meeting Minutes

Highlights and News:  

• Trump vows to stick additional tariffs on China, Mexico and Canada
• CHINA CALLS US ENTITY LIST ‘ECONOMIC COERCION’
  
• Biden Proposes Medicare, Medicaid Coverage of Obesity Drugs
• Russia expels British diplomat – IFAX
• Russia strikes Ukraine’s critical infrastructure in war’s largest drone attack
  

World markets slipped after President-elect Donald Trump vowed additional tariffs on Mexico, Canada and China, shaking markets with his first specific threats to
the US’s top trading partners since his election. Trump cast the new import taxes as necessary to clamp down on migrants and illegal drugs flowing across borders. He vowed to hit Mexico and Canada with a 25% tariff on “ALL products,” saying he would sign an
executive order to that effect on his first day in office. Investors will be monitoring the Federal Reserve’s November meeting minutes today, as well as its preferred inflation gauge due tomorrow for further clues on the US central bank’s policy path. Meanwhile,
there are reports that Israel and Hezbollah moved closer to signing a cease-fire deal that may be concluded in coming days.    

EQUITIES:  

US equity futures are mixed, while investors assessed the implications Donald Trump’s tariffs on top trade partners could have on the local economy. Automakers such as Ford and General
Motors – that have highly integrated supply chains across Mexico, the US and Canada – are lower ahead of the bell. This week kicks off a run of strong seasonal patterns for US stocks. Since 1950, the S&P 500 has risen 80% of the time between the Tuesday before
Thanksgiving to the second trading day of the New Year, with an average gain of 2.6%. Weight-loss drugs would be covered by the US government under a Biden administration proposal, potentially extending access of the drugs to millions of Americans. Novo and
Lilly shares rose. On the data front, a consumer confidence survey is due mid-morning and this afternoon markets will assess minutes from the central bank’s latest meeting. The Fed’s Neel Kashkari, typically a hawk, said he is open to cutting interest rates
again next month.

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.2%, Russell 2000 -0.2%, DJI -0.3%. 

In pre-market trading, Rivian (RIVN) jumped ~9% after winning preliminary approval for a $6.6 billion federal loan to support the construction of its EV plant in Georgia.
Amgen Inc. (AMGN) slips 7% after its experimental obesity shot helped patients lose up to 20% of their body weight in a yearlong trial, disappointing investors who had hoped the highly anticipated trial would produce more weight loss. Best Buy Co. (BBY) falls
7% after cutting its full-year guidance on sluggish demand for electronics and other appliances. Blue Bird Corp. (BLBD) falls 6% as the school bus manufacturer’s fiscal 4Q beat and 2025 guidance wasn’t enough to extend a six-session runup in the share price.
Eli Lilly (LLY) climbs 4.5% after the Biden administration proposed a rule that would require the US government to cover weight-loss drugs through the Medicare and Medicaid systems. General Motors (GM) falls 4% and Ford (F) falls about 2% as President-elect
Trump vowed additional tariffs on China as well as US neighbors Canada and Mexico. Kohl’s (KSS) drops 17% after the company trimmed its full-year sales outlook. Semtech (SMTC) gains 17% as the semiconductor device company beat earnings estimates. Woodward
(WWD) climbs 11% after the aircraft parts manufacturer’s fourth-quarter revenue and earnings beat consensus. Zoom Video (ZM) drops 11% after the communications software company reported its third-quarter results that didn’t match lofty expectations.

SPY relative to the equal weight RSP; below the 200 day mvg avg for the first time since March ‘23

European gauges dropped, led by steep declines in automaker stocks, one of the potential losers from any Trump-imposed tariffs on the European Union. Stellantis NV,
which produces vehicles in Mexico, tumbled over 4%. Even though Europe didn’t get a specific mention, stocks in the region fell on fears that fresh tariffs are coming. In the pharmaceutical sector, shares in Roche fell after the group’s phase III lung-cancer
drug missed the primary overall survival endpoint in the final analysis. Indices in the region have since recouped some of the early losses. Stoxx 600 -0.2%, DAX -0.2%, CAC -0.2%, FTSE 100 -0.1%. Autos -1.6%, Retail -1.1%, Basic Resources -1%. Personal Goods
+0.8%, Healthcare +0.4%, Telecom +0.3%. 

Shares in Asia fell as traders mulled the potential impact of additional US tariffs on China as well as Mexico and Canada.  Today’s risk-off moves in Asia followed
Donald Trump’s remarks that he will impose additional 10% tariffs on Chinese goods due to the influx of illegal drugs. The MSCI Asia Pacific Index dropped 0.7%, with benchmarks in Japan and Taiwan leading declines. Tech hardware and financials were the biggest
drags among industry groups. Chinese benchmarks swung between gains and losses, outperforming most of its regional peers. There are expectations that Beijing may step up fiscal easing to support economic growth in the face of rising geopolitical tensions.
Taiwan -1.2%, Topix -1%, Indonesia -0.9%, ASX 200 -0.7%, Kospi -0.5%, Singapore -0.5%, CSI 300 -0.2%, Sensex -0.1%. Hang Seng Index +0.1%, Vietnam +0.6%.

FIXED INCOME: 
 

Treasuries are slightly cheaper across the curve, unwinding a small portion of Monday’s strong rally on Trump’s nomination of Scott Bessent for Treasury secretary
along with a well-received 2-year auction. Treasuries so far offer muted reaction to Trump’s latest threat of additional tariffs on Mexico, Canada and China. Today’s session includes consumer confidence data and FOMC minutes.  Treasury auction cycle continues
with $70b 5-year and concludes Wednesday with $44b 7-year. 10-year yield is just slightly higher at 4.28%; the curve steepened with 2s10s +2.5bps.

METALS: 

Gold is slightly higher after initially falling following Trump’s comments. Bullion traded near $2,630 an ounce after slumping 3.4% in the previous session amid a
potential easing of tensions in the Middle East. Israel’s security cabinet is expected to vote on a possible cease-fire deal with Hezbollah today, and passage is considered likely, an Israeli official said.  Spot gold +0.25%, Silver +0.8%, Copper +0.1%.

ENERGY:   

Oil rebounded slightly from the previous day’s slump while traders assessed President-elect Trump’s threat of new tariffs and progress on a cease-fire agreement between
Israel and Hezbollah. Trump’s announcement of the potential levies on Canada, Mexico and China initially sparked a rally in the dollar that weighed on commodities. Ahead of a meeting by OPEC+ this weekend, Iran’s representative to the producer group said the
cartel has little scope to reverse output cuts due to more supplies from elsewhere. WTI +0.5%, Brent +0.4%, US Nat Gas +1.1%, RBOB +0.8%.

CURRENCIES: 

In currency markets, the US dollar index staged a broad yet brief advance with the Mexican peso and the Canadian dollar among the worst performers. The Canadian dollar
fell to a four-year low on the Trump tariff news, while the Mexican peso traded close to its weakest since 2022. China’s yuan edged lower offshore. The euro dropped sharply by 0.7% on the tariffs news yet manages to recover to trade higher versus the dollar.
US$ Index -0.15%, GBPUSD +0.25%, EURUSD +0.2%, USDJPY -0.7%, AUDUSD -0.05%, NZDUSD +0.2%, USDCHF -0.2%, USDCAD +0.8%, USDMXN +1%.    

Spot Bitcoin -1%, Spot Ethereum -3.2%.

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
• Allegiant Travel (ALGT) Raised to Neutral at UBS
• Applied Industrial Tech (AIT) Raised to Buy at BofA; PT $315
• Bank of America (BAC) Raised to Buy at CFRA
• Capri Holdings (CPRI) Raised to Buy at Guggenheim
• Charter Communications (CHTR) Raised to Neutral at BNPP Exane; PT $360
• Chevron (CVX) Raised to Buy at Citi; PT $185
• Eastman Chemical (EMN) Raised to Overweight at Wells Fargo; PT $125
• First Interstate Banc (FIBK) Raised to Buy at DA Davidson; PT $42
• Old National (ONB) Raised to Strong Buy at Raymond James
• Russel Metals (RUS CN) Raised to Outperform at RBC; PT C$51
• Science Applications (SAIC) Raised to Overweight at Wells Fargo
• United Airlines (UAL) Raised to Buy at UBS; PT $139
• Zoom Video (ZM) Raised to Outperform at Evercore ISI; PT $115
• Downgrades
• American Air (AAL) Cut to Neutral at UBS; PT $16
• Brunswick (BC) Cut to Neutral at B Riley; PT $88
• Cassava Sciences (SAVA) Cut to Neutral at HC Wainwright
• CI Financial (CIX CN) Cut to Sell at TD Cowen
• Cut to Market Perform at KBW; PT C$31.50
• Everest Group Ltd (EG) Cut to Hold at Jefferies; PT $429
• GMS (GMS) Cut to Neutral at DA Davidson; PT $97
• Goldman Sachs (GS) Cut to Hold at HSBC
• Hubbell (HUBB) Cut to Hold at Deutsche Bank
• Morgan Stanley (MS) Cut to Hold at HSBC
• Poseida (PSTX) Cut to Neutral at BTIG
• Cut to Neutral at Cantor
• Southwest Air (LUV) Cut to Sell at UBS; PT $27
• Summit Materials (SUM) Cut to Peerperform at Wolfe
• Cut to Neutral at Longbow
• Cut to Neutral at Citi; PT $52.50
• Cut to Hold at Loop Capital; PT $52.50
• Target (TGT) Cut to Neutral at Daiwa; PT $130
• TerraVest Capital (TVK CN) Cut to Sector Perform at National Bank
• Initiations
• Atlassian (TEAM) Reinstated Buy at William O’Neil
• Aurora Innovation (AUR) Rated New Peerperform at Wolfe
• Avidity Biosciences (RNA) Rated New Outperform at RBC; PT $67
• Blackrock Silver Corp (BRC CN) Rated New Outperform at Raymond James
• Bright Minds Biosciences (DRUG CN) Rated New Outperform at Baird
• Cargo Therapeutics (CRGX) Rated New Outperform at William Blair
• Carnival (CCL) Rated New Market Perform at Bernstein; PT $26
• Dyne Therapeutics (DYN) Rated New Outperform at RBC; PT $45
• Ingram Micro (INGM) Rated New Hold at Melius; PT $26
• Kornit Digital (KRNT) Rated New Overweight at Cantor; PT $39
• Pentair (PNR) Rated New Outperform at Wolfe; PT $125
• Pinterest (PINS) Rated New Buy at TD Cowen; PT $38
• Rambus (RMBS) Rated New Outperform at Baird
• Redwire (RDW) Rated New Buy at HC Wainwright; PT $18
• Royal Caribbean (RCL) Rated New Outperform at Bernstein; PT $290
• Sonoco (SON) Rated New Buy at Truist Secs; PT $63
• Stack Capital Group (STCK CN) Rated New Outperform at Raymond James
• Thomson Reuters (TRI CN) Rated New Equal-Weight at Wells Fargo

Data sources: Bloomberg, Reuters, CQG

David Wienke