Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET GDP, Advance Goods Trade Balance, Wholesale Inventories, Retail Inventories, Durable
Goods Orders, Cap Goods Orders, Jobless Claims; 9:45ET MNI Chicago PMI; 10:00ET Personal Income and Spending, PCE Price Index, Pending Home Sales

Highlights and News:  

• Trump Names Hassett to Economic Post, Greer as Trade Chief
• ERDOGAN: TURKEY READY TO CONTRIBUTE TO A CEASE-FIRE IN GAZA
• Biden is asking Congress for another $24 billion to aid Ukraine
• US forces struck an Iranian-backed militia’s weapons storage facility in Syria
  
• US SHIFTS CHINA TRAVEL ADVISORY TO ‘EXERCISE INCREASED CAUTION’

World markets dipped ahead of a burst of pre-Thanksgiving holiday data in the US, including the Federal Reserve’s preferred inflation gauge and an update on economic
growth. In France, a measure of risk on the country’s bonds rose to levels last seen during the euro-area debt crisis as a political standoff over the budget threatens to bring down the government. Middle East tensions abated somewhat as a cease-fire between
Israel and Hezbollah started early today, while the conflict between Israel and Hamas continues to rage. JPMorgan upgraded Mexican equities to “overweight” from “neutral” on the back of strong US growth but cut Brazilian equities citing slower growth in China
amid emerging pressures from Trump’s tariff policy. Investors have plowed money into US stocks this year, with inflows on course for a record while European stocks are trading at a record 40% discount to the S&P 500. That divergence is making global stock
market performance ever more polarized, JPMorgan strategists said.    

EQUITIES:  

US equity futures are mixed, with small caps outperforming as traders digested Donald Trump’s latest cabinet appointments and looked ahead to a slew of data on the economy for clues on
the outlook for interest rates. Economists expect the US core PCE Price Index to increase 0.3%, in line with the previous month’s reading. Dell and HP shares slumped premarket after a results miss suggested a stall in the PC market recovery. CrowdStrike fell
on a disappointing earnings forecast.

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.25%, Russell 2000 +0.7%, DJI +0.02%. 

In pre-market trading, Dell Technologies (DELL) tumbles 12% as revenue generated by the company’s PC business declined 1% in the fiscal third quarter, falling short
of estimates. HP (HPQ) declines 8% after sales in its PC unit missed the average analyst estimate. Similar to its peer Dell, the firm flagged a delayed PC refresh cycle. Guess (GES) slides 11% after the clothing company cut its full year guidance. CrowdStrike
(CRWD) drops 3% after the cybersecurity firm’s issued a weaker-than-expected earnings forecast.  Ambarella (AMBA) climbs 21% after the semiconductor device company issued a stronger-than-anticipated revenue forecast for the current quarter. Autodesk (ADSK)
slides 7% after the software company posted third-quarter adjusted operating margin that fell short of expectations. Nutanix (NTNX) gains 5% after the infrastructure software company reported first-quarter results that beat expectations. Symbotic (SYM) sinks
22% after filing to delay its 10-K report. Urban Outfitters (URBN) jumps 12% after the clothing retailer reported stronger-than-expected quarterly sales growth. Workday (WDAY) drops 11% after the software company provided a forecast that is seen as disappointing.

European gauges are lower as concerns mounted around the French government’s ability to push through its budget plan. Prime Minister Michel Barnier warned on Tuesday
evening that the country faced a “storm” in financial markets if his budget was rejected. Traders trim their ECB interest rate cut bets after Governing Council member Isabel Schnabel warned against lowering borrowing costs too far. Officials can continue to
loosen monetary policy but should do so only gradually to avoid taking rates below the neutral threshold, Schnabel said. Financial stocks were hit the hardest, with French insurer Axa falling as much as 5.3%. The Stoxx 600 is down 0.3% with underperformance
in auto shares suggesting tariff risks from the US are also still providing a drag.  DAX -0.3%, CAC -0.9%, FTSE 100 +0.05%. insurance -1.1%, Banks -0.9%, Technology -0.8%, Retail -0.8%. Real Estate +0.9%, Financial Services +0.3%.

Shares in Asia were mixed to higher as Chinese shares rebounded after a recent rout. Stocks in China and Hong Kong bounced from recent lows on bets that Beijing will
roll out more supportive policies next month to counter risks of US tariffs and shore up the sluggish Chinese economy. The MSCI Asia Pacific Index rose 0.4%, lifted by Chinese tech giants such as Tencent and Meituan. Korean chipmaker stocks fell after one
of Trump’s picks to lead the Department of Government Efficiency called Chips Act subsidies to the industry “wasteful.” Japanese automakers extended declines as the yen strengthened and after US peers fell on Trump’s tariff threats. Hang Seng Tech +3.6%, Hang
Seng Index +2.3%, CSI 300 +1.7%, ASX 200 +0.55%, Sensex +0.3%, Kospi -0.7%, Topix -0.9%, Taiwan -1.5%, Philippines -1.5%.

FIXED INCOME: 
 

Treasuries advanced across the curve as traders positioned for the latest inflation reading, driving the 10-year yield to levels last seen immediately after the US
election. Attention will then turn to an auction of new seven-year debt. The Treasury will offer $44 billion of bonds later as it looks to build on solid demand at Tuesday’s offering of a five-year note. US yields are richer by 3bp-4bp across the curve with
front-end leading gains, sending 2s10s and 5s30s curve spreads to week’s widest levels; 10-year around 4.27%.

METALS: 

Gold is higher on dollar weakness, as investors waited for US economic data that could provide clues on the Federal Reserve’s rate path. Traders attention today will
be on a slew of pre-Thanksgiving holiday data, including a reading of the Federal Reserve’s preferred inflation gauge. Spot gold +0.7%, Silver +0.05%, Copper +0.7%.

ENERGY:   

Oil prices stabilized as markets assessed the potential impact of a ceasefire deal between Israel and Hezbollah, ahead of Sunday’s OPEC+ meeting. US inventory data
is also in focus after an industry group said crude stocks fell last week. US crude inventories fell by 5.9 million barrels last week, according to API. That would be the biggest drop since the end of August if confirmed by the EIA today. Trading may be thin
ahead of the Thanksgiving Day holiday on Thursday.  WTI +0.5%, Brent +0.45%, US Nat Gas -4.5%, RBOB +0.5%.

CURRENCIES: 

In currency markets, the dollar is lower ahead of key US inflation data. The yen tops the G-10 FX leader board, rising 1.1% against the dollar. The kiwi dollar is
not far behind even after the RBNZ cut rates by 50 bps but hinted at eventual slower easing ahead. The euro rose to its highest level of the day after the ECB’s Isabel Schnabel warned against cutting interest rates too far. The euro has been singled out as
one of the most vulnerable to Trump’s tariff agenda by strategists at Goldman Sachs, JPMorgan and Citigroup. Safe-haven Japanese yen extended its strong run, climbing to a three-week high. US$ Index -0.5%, GBPUSD +0.4%, EURUSD +0.4%, USDJPY -1.1%, AUDUSD ~flat,
NZDUSD +0.9%, USDCHF -0.3%, USDNOK -0.5%, USDCAD +0.05%, USDMXN +0.3%. 

Spot Bitcoin +1.5%, Spot Ethereum +3.7%.

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
• Aldebaran Resources (ALDE CN) Raised to Buy at Paradigm Capital; PT C$2.80
• Dick’s Sporting (DKS) Raised to Buy at UBS; PT $260
• Embecta (EMBC) Raised to Buy at BTIG; PT $26
• Martin Marietta (MLM) Raised to Overweight at JPMorgan; PT $640
• Nestle (NESN SW) ADRs Raised to Equal-Weight at Morgan Stanley; PT $85
• Nvidia (NVDA) Raised to Hold at Punto Casa de Bolsa; PT $140
• Paramount Global (PARA) Raised to Buy at CFRA
• Urban Outfitters (URBN) Raised to Buy at Citi; PT $59
• Downgrades
• Alexandria Real Estate (ARE) Cut to Neutral at JPMorgan; PT $121
• CrowdStrike (CRWD) Cut to Hold at HSBC; PT $347
• Eli Lilly (LLY) Cut to Hold at Erste Group
• Gran Tierra (GTE) Cut to Sector Perform at Peters & Co; PT $7.81
• Kohl’s (KSS) Cut to Neutral at Baird; PT $18
• Cut to Reduce at Gordon Haskett; PT $11
• PennantPark Investment (PNNT) Cut to Neutral at Ladenburg Thalmann
• Workday (WDAY) Cut to Neutral at Piper Sandler; PT $270
• Initiations
• Amphenol (APH) Rated New Buy at William O’Neil
• Bank of Hawaii (BOH) Rated New Overweight at Stephens; PT $90
• Booking (BKNG) Rated New Outperform at Baird
• Compass Diversified (CODI) Rated New Buy at TD Cowen; PT $34
• Engene Holdings (ENGN) Rated New Outperform at Raymond James; PT $23
• Expedia (EXPE) Rated New Outperform at Baird
• First Hawaiian (FHB) Rated New Equal-Weight at Stephens; PT $30
• Grail (GRAL) Rated New Equal-Weight at Morgan Stanley; PT $16
• Kinsale Capital (KNSL) Reinstated Buy at William O’Neil
• Lundin Mining (LUN CN) Reinstated Hold at Kepler Cheuvreux; PT C$15.40
• Plumas (PLBC) Rated New Overweight at Stephens; PT $60
• Rogers Sugar (RSI CN) Rated New Sector Perform at Scotiabank; PT C$6.25
• Taylor Morrison (TMHC) Reinstated Buy at William O’Neil

Data sources: Bloomberg, Reuters, CQG

David Wienke