Daily Game Plan

by Contributor
on December 10, 2024

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

TODAY’S ECONOMIC DATA:  8:30ET Nonfarm Productivity, Unit Labor Costs

US CPI, Canada rate decision on Wednesday; ECB rate decision, Thursday

Highlights and News:  

  • US small-business optimism surged in November to a three-year high
  • Xi: China is willing to maintain dialogue with US
  • China sends largest naval fleet in decades to region, threat level severe, Taiwan says
  • Israeli PM Netanyahu took the witness stand for the first time today in his long-running corruption trial
  • Israel Steps Up Airstrikes, Sends Troops Deeper Into Syria

 

Global stocks dipped taking cues from tech-led declines on Wall Street, countering stimulus-fueled gains in China. China’s exports slowed sharply and imports unexpectedly
shrank in November, in a worrying sign for the world’s No. 2 economy. Outbound shipments grew 6.7% last month, missing forecasts of an 8.5% increase and down from a 12.7% rise in October. Imports shrank 3.9%, their worst performance in nine months. The main
events of the week are still to come. US inflation data due on Wednesday is the most important piece of global economic data this week. Investors will also be watching detailed policies expected from China’s annual Central Economic Work Conference scheduled
to begin Wednesday. Traders are also expecting rate cuts in Europe and Canada later this week and are leaning towards a 50 basis point cut in Switzerland. Brazilian President Lula is in the ICU after brain surgery and reportedly in good health conditions.
 

 

EQUITIES:  

US equity futures fluctuated as investors remained cautious ahead of a crucial inflation report tomorrow that could influence the Fed at its monetary policy meeting this month. US small-business
confidence surged to the highest level in nearly 3-1/2 years in November amid post-election euphoria. The Small Business Optimism Index jumped 8.0 points to 101.7 last month, the highest level since June 2021. Oracle shares sank over 8% post-market after its
quarterly revenue fell short of expectations, hindered by fierce competition among database and cloud services providers.

Futures ahead of the bell: E-Mini S&P +0.05%, Nasdaq +0.2%, Russell 2000 -0.1%, DJI -0.2%.

In pre-market trading, Oracle (ORCL) declines 7% after the software company reported second-quarter results that are seen as underwhelming in the wake of robust stock performance. Alibaba
(BABA) slips 2% along with other US-listed Chinese stocks as traders took profits after a rally spurred by policymakers’ pledges to boost growth. C3.ai (AI), a data-analysis software company, gains 3% after reporting quarterly revenue that topped estimates
and raising its full-year sales forecast. Designer Brands (DBI) slides 19% after the parent company of footwear and accessories chain DSW cut its adjusted earnings per share guidance for the full year. Ferguson (FERG) drops 7% after the plumbing and HVAC supplies
company posted a quarterly profit that missed estimates. Fluence Energy (FLNC) falls 8% after the provider of energy storage systems said it intends to offer $300m aggregate principal of convertible senior notes in a private offering. MongoDB (MDB) declines
6% after the database software company announced the departure of its CFO and COO, Michael Gordon. Toll Brothers (TOL) declines 3% after the luxury builder’s profit-margin projection fell short of estimates. UniQure (QURE) soars 88% after the company reached
an agreement with the FDA on key elements of an accelerated approval pathway for AMT-130.

Growth gaining some momentum versus Value over the last two weeks

Consumer Discretionary sector has outpaced the broader market by roughly 19% since mid-August.

European gauges slipped as optimism over China stimulus faded. Europe’s Stoxx 600 is slightly lower after an eight-day streak of gains. Miners and luxury names retreated,
a day after the sectors were boosted by Beijing’s pledge for looser monetary policy. Among individual names, Delivery Hero SE sank over 10% as Talabat Holding, its Middle Eastern unit, turned negative in its trading debut. Ashtead Group shares dropped 13%
after the industrial-equipment rental firm proposed moving its primary listing to the US from London. The next test for this year-end rally will be the European Central Bank’s meeting on Thursday, its first since governments in Paris and Berlin both collapsed
over budget talks. Stoxx 600 -0.2%, DAX +0.05%, CAC -0.6%, FTSE 100 -0.5%. Luxury -1.1%, Personal Goods -0.8%, Basic Resources -0.8%. Autos +0.6%, Healthcare +0.5%.

Shares in Asia were mixed to lower.  The MSCI Asia Pacific Index ended slightly lower after being up as much as 0.8% earlier in the day. TSMC, Tencent and Hitachi dragged
down the regional gauge, while Sony, BHP Group and Tokyo Electron were among the biggest boosts. Chinese shares opened sharply higher, only to give back a large portion of the gains by the close. South Korean equities rose for the first time since last week’s
political turmoil as authorities vowed to stabilize sentiment.  Political uncertainties remain, with the opposition still pushing for President Yoon Suk Yeol’s ouster after he narrowly survived an impeachment vote.  Australia’s key benchmark pared losses after
a Reserve Bank interest-rate decision. Kospi +2.4%, CSI 300 +0.7%, Philippines +0.7%, Nikkei 225 +0.5%, Singapore +0.5%, Sensex flat. Vietnam -0.1%, ASX 200 -0.4%, Hang Seng Index -0.5%, Taiwan -0.6%, Hang Seng Tech -1.4%.

FIXED INCOME: 
 

Treasuries are under pressure in early US trading, led by bear-steepening in gilts. Treasury supply is also a factor, with first of this week’s three coupon auctions
ahead. US yields are 2bp-4bp higher on the day with 2s10s, 5s30s spreads steeper by 1bp and 2bp. Auction cycle begins with $58b 3-year new issue and includes $39b 10-year and $22b 30-year reopenings Wednesday and Thursday. 10-year yield around 4.24%.

 

 

 

METALS: 

Gold rose for a third day as traders shifted focus to key US inflation reports due this week that may shape expectations ahead of the Federal Reserve’s final interest-rate
decision of the year. Copper drifted lower ahead of the data. Bullion traded near $2,675 an ounce after rising 1% on Monday following China’s central bank adding the precious metal to its reserves for the first time in seven months. Geopolitical concerns also
fanned haven demand on fears of a power vacuum in Syria. Spot gold +0.5%, Silver is flat, Copper -0.6%.

 

 

 

ENERGY:   

 

Oil prices eased, as concerns over a looming supply glut overshadowed the political risks and China’s stimulus plan. Crude imports in China jumped to a three-month
high as refiners sought to use up their quota before year-end. Crude futures have been stuck in a tight range since mid-October but the fall of Bashar al-Assad’s Syrian regime has left a power vacuum that could lead to more turmoil as factions fight for control.
The market is watching for any spillover that could reverberate through the Middle East. WTI -0.25%, Brent -0.3%, US Nat Gas -2.8%, RBOB -0.05%

 

 

CURRENCIES: 

In currency markets, the Australian dollar slid as the central bank held rates steady but suggested rate cuts were finally approaching. Norwegian krone drew support
from an acceleration in core inflation, backing the central bank’s projections for no monetary policy easing until March. USDJPY reversed an earlier drop. The Bank of Japan should raise its benchmark interest rate and it faces the risk it has already fallen
behind the curve, according to a prominent economics professor who was an adviser to the prime minister. Bets the Bank of England will cut interest rates less aggressively than the European Central bank are supporting sterling. US$ Index +0.2%, GBPUSD +0.05%,
EURUSD -0.25%, USDJPY +0.35%, AUDUSD -0.6%, NZDUSD -0.7%, USDCHF +0.2%, USDCAD -0.1% 

 

 

 

Spot Bitcoin +0.8%, Spot Ethereum +0.3%.

 

 

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
    • American Air (AAL) Raised to Outperform at Bernstein; PT $24
    • Ball (BALL) Raised to Outperform at Mizuho Securities; PT $67
    • Cipher Mining (CIFR) Raised to Overweight at JPMorgan; PT $8
    • CleanSpark (CLSK) Raised to Overweight at JPMorgan; PT $17
    • CoreCivic (CXW) Raised to Outperform at Wedbush; PT $30
    • DocuSign (DOCU) Raised to Hold at CFRA
    • General Motors (GM) Raised to Equal-Weight at Morgan Stanley; PT $54
    • Granite Point Mortgage (GPMT) Raised to Market Perform at KBW; PT $3.25
    • Interpublic (IPG) Raised to Equal-Weight at Wells Fargo; PT $34
    • Jones Lang (JLL) Raised to Outperform at KBW; PT $325
    • MARA Holdings Inc (MARA) Raised to Neutral at JPMorgan; PT $23
    • Methanex (MX CN) Raised to Outperform at CIBC; PT C$83.40
    • Norwegian Cruise (NCLH) Raised to Buy at Goldman; PT $35
    • SL Green (SLG) Raised to Neutral at JPMorgan; PT $80
    • Taseko Mines (TKO CN) Raised to Outperform at National Bank; PT C$4.25
    • Travelers (TRV) Raised to Buy at HSBC; PT $290
    • UPS (UPS) Raised to Outperform at BMO; PT $150
    • Vimeo (VMEO) Raised to Overweight at Piper Sandler
  • Downgrades
    • Applied Opto (AAOI) Cut to Sell at B Riley; PT $14
    • BioAge Labs (BIOA) Cut to Underweight at Morgan Stanley; PT $5
    • Brightsphere Investment (BSIG) Cut to Sector Perform at RBC; PT $33
    • Carisma Therapeutics Inc (CARM) Cut to Neutral at BTIG
    • Centene (CNC) Cut to Underperform at Jefferies; PT $52
    • Chemtrade Logistics (CHE-U CN) Cut to Neutral at CIBC; PT C$13
    • Crown Castle (CCI) Cut to Underweight at Wells Fargo; PT $100
    • D.R. Horton (DHI) Cut to Market Perform at KBW; PT $183
    • EBay (EBAY) Cut to Underperform at Jefferies; PT $52
    • First American (FAF) Cut to Market Perform at KBW; PT $80
    • IAC Inc (IAC) Cut to Neutral at Piper Sandler
    • IREN Ltd (IREN) Cut to Neutral at JPMorgan; PT $15
    • Lundin Gold (LUG CN) Cut to Market Perform at BMO; PT C$35
    • Martin Marietta (MLM) Cut to Neutral at BNPP Exane; PT $650.50
    • MGIC (MTG) Cut to Market Perform at KBW; PT $29
    • Pactiv Evergreen (PTVE) Cut to Neutral at Citi; PT $18
    • Pinterest (PINS) Cut to Neutral at Piper Sandler; PT $36
    • Progressive (PGR) Cut to Hold at HSBC; PT $267
    • Rocket Cos. (RKT) Cut to Underperform at KBW; PT $11.50
    • Teck Resources (TECK/B CN) Cut to Sector Perform at National Bank
    • Toll Brothers (TOL) Cut to Market Perform at KBW; PT $164
  • Initiations
    • AbbVie (ABBV) Reinstated Neutral at BofA
    • Amgen (AMGN) Reinstated Underperform at BofA
    • AT&T (T) Rated New Outperform at Bernstein; PT $28
    • Aurora Innovation (AUR) Rated New Overweight at Cantor; PT $10
    • Biogen (BIIB) Reinstated Neutral at BofA
    • Bowlero (BOWL) Rated New Buy at Truist Secs; PT $16
    • Bristol Myers (BMY) Reinstated Neutral at BofA
    • DATA Communications Management (DCM CN) Rated New Buy at Paradigm Capital
    • Eli Lilly (LLY) Reinstated Buy at BofA
    • Gilead (GILD) Reinstated Buy at BofA
    • GreenTree Hospitality (GHG) ADRs Reinstated Neutral at Goldman
    • Hologic (HOLX) Rated New Hold at Jefferies; PT $85
    • James Hardie (JHX AU) ADRs Rated New Buy at Truist Secs; PT $45
    • Johnson & Johnson (JNJ) Reinstated Neutral at BofA
    • Merck & Co (MRK) Reinstated Buy at BofA
    • Moderna (MRNA) Reinstated Underperform at BofA
    • Nektar (NKTR) Rated New Buy at HC Wainwright; PT $6.50
    • NeoGenomics (NEO) Rated New Buy at Jefferies; PT $22
    • Oscar Health (OSCR) Rated New Underperform at Jefferies; PT $12
    • Pfizer (PFE) Reinstated Neutral at BofA
    • Prime Medicine (PRME) Rated New Market Outperform at JMP; PT $10
    • Probe Gold Inc (PRB CN) Rated New Buy at Desjardins; PT C$3.75
    • QuidelOrtho (QDEL) Rated New Hold at Jefferies; PT $43
    • Regeneron (REGN) Reinstated Underperform at BofA
    • Rezolve AI (RZLV) Rated New Buy at Roth Capital Partners; PT $4
    • Solid Biosciences (SLDB) Rated New Market Outperform at JMP; PT $15
    • Stifel Financial (SF) Rated New Neutral at JPMorgan; PT $120
    • T-Mobile (TMUS) Rated New Market Perform at Bernstein; PT $265
    • Troilus Gold (TLG CN) Reinstated Buy at Desjardins; PT C$1.15
    • United States Antimony Corp (UAMY) Reinstated Buy at HC Wainwright
    • US Gold (USAU) Rated New Speculative Buy at Paradigm Capital; PT $16.50
    • Verizon (VZ) Rated New Market Perform at Bernstein; PT $48

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

Categories:

Charts

Tags:

aucldxesngqqqsp500tyusdvixwtiX

Comments are closed