Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET *CPI*, Hourly Earnings; 9:45et BOC Rate Decision; 1:00ET $39 billion 10-year
notes reopening; 2:00ET Federal Budget Balance

US NOV. CONSUMER PRICES RISE 0.3% M/M; EST. +0.3%; US NOV. CORE CPI RISES 3.3% Y/Y; EST. +3.3%;  US NOV. CONSUMER PRICES RISE 2.7% Y/Y; EST. +2.7%.

Highlights and News:  

• APPLE LAUNCHES ITS CHATGPT INTEGRATION WITH SIRI
• China is considering allowing the yuan to weaken as they brace for higher tariffs
• Israel says its air strikes destroyed most of Syria’s strategic weapons stockpiles
• Adidas HQ was raided by German authorities as part of a years-long tax investigation
• GM is shutting down its robotaxi unit Cruise, citing costs and reputational risk
  
• Bipartisan Legislation To Be Introduced to Force Health Insurers to Give Up Pharmacy Businesses
  

Global stocks are roughly flat as investors cautiously awaited US inflation data that is expected to put the Federal Reserve on course to cut rates again. The Bank
of Canada is seen cutting rates today while the European Central Bank and Swiss National Bank are expected to follow suit Thursday. Meanwhile, China’s two-day Central Economic Work Conference that starts today is expected to map out policies for next year.
Bank of Japan officials see a small cost to waiting before raising interest rates while still being open to a hike next week depending on data and market developments, sources said. German chancellor Olaf Scholz plans to formally request a Dec. 16 confidence
vote that’ll trigger a snap election in Germany in late February.

EQUITIES:  

US equity futures are steady as traders braced for key US inflation data. Core consumer price index is seen rising 0.3% in November, a fourth straight month of firm increases.  The CPI
release and another report on producer prices due Thursday will be the last look at inflation data Federal Reserve officials will have ahead of their policy meeting next week. Macy’s shares slumped premarket after cutting its profit outlook due to an employee’s
hidden millions in expenses. GameStop rose after posting a surprise profit. The Wall Street Journal is reporting this morning that lawmakers are seeking health insurers to sell off pharmacies.

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

In pre-market trading, Macy’s (M) falls 8% after trimming its profit outlook after concluding its investigation into an employee plot to hide millions of dollars in
expenses. Mondelēz International (MDLZ) shares are trading over 4% higher after the company announced a new $9 billion share repurchase authorization.  Acelyrin (SLRN) tumbles 16% after the biotech company said its Phase 2b/3 trial of izokibep to treat a form
of eye inflammation failed to meet targets. Dave & Buster’s (PLAY) drops 14% after the entertainment and dining chain reported weaker-than-expected 3Q results and said CEO Chris Morris is resigning. General Motors (GM) gains 1% after the automaker said it
will stop funding the robotaxi development of its Cruise unit. Joby Aviation (JOBY) declines 7% after the air-taxi startup entered into an equity distribution agreement. Patterson Cos. (PDCO) soars 33% as Patient Square Capital agreed to buy the dental and
animal health firm for $31.35 a share in cash. Stitch Fix (SFIX) climbs 21% after the online personal-styling service raised its year revenue outlook. Walgreens Boots Alliance (WBA) slips 1% as analysts question the probability of Sycamore Partners acquiring
the pharmacy chain.

European gauges opened lower before recouping losses before a key US inflation print. Retail shares largely underperform after Spain’s Inditex, the owner of Zara, reported
slower sales growth at the outset of the crucial holiday shopping season. Zalando SE slumped after the German retailer agreed to buy rival About You Holding SE, offering a premium of about 67% to Tuesday’s closing price. German sportswear maker Adidas AG also
slipped after authorities raided its headquarters as part of a tax investigation. Media stocks lead the gains with Publicis Groupe SA and RTL Group SA shares rising after JPMorgan upgraded both stocks to overweight.  Stoxx 600 +0.15%, DAX +0.05%, CAC +0.3%,
FTSE 100 +0.3%. Media +1.1%, Industrials +0.6%, Food & Bev +0.5%. Retail -2.5%, Energy -0.5%.

Shares in Asia were mixed to lower, weighed by a slump in Taiwan and Hong Kong shares as traders tempered expectations for further stimulus from a key policy meeting.
The MSCI Asia Pacific Index slipped 0.2%, with TSMC, Meituan and Tencent among the biggest drags on the gauge. The regional benchmark has moved in a tight range of less than 0.5% for the past five sessions. Tech stocks were among the biggest drags in Asia,
even after TSMC’s latest sales report showed sustained growth from AI. A bright spot in the region was South Korea, where stocks extended gains to a second day following a selloff sparked by political turmoil. Shares of Shanghai-based companies rose after
the city issued a plan to support mergers and acquisitions in some key industries including securities, biomedicine and integrated circuits. Kospi +1%, Topix +0.3%, Shanghai Composite +0.3%, Indonesia +0.15%, Sensex and Nikkei 225 were flat. Hang Seng Tech
-1.3%, Philippines -1.2%, Taiwan -1%, Hang Seng Index -0.8%, Singapore -0.5%, ASX 200 -0.5%, Vietnam -0.25%, CSI 300 -0.2%.

FIXED INCOME: 
 

Treasury yields ticked higher across the curve ahead of inflation data and the 10-year auction this afternoon. November CPI report at 8:30ET time has potential to
alter the outlook for Fed rate cuts. US yields are higher by 1bp to 2bp across maturities with curve slightly flatter. 10-year around 4.245% is higher by ~1.5bp. Treasury auction cycle continues with 10-year reopening, second of this week’s three coupon sales;
Tuesday’s 3-year note tailed slightly. WI 10-year yield at 4.24% is ~11bp richer than November new-issue auction, which stopped through by 0.3bp. Cycle concludes with $22b 30-year reopening Thursday.

METALS: 

Gold held a three-day advance while silver fell as traders prepared for US inflation data that will help determine whether the Federal Reserve cuts or holds rates
next week at its final meeting of the year. Gold is expected to rally to a record in 2025 even if the US dollar appreciates, with central banks including China’s potentially adding to holdings, according to Goldman Sachs. Spot gold +0.15%, Silver -0.7%, Copper
-0.1%.

ENERGY:   

Crude oil rose after a Bloomberg News report that the Biden administration is considering new sanctions on Russia’s oil trade. The administration is weighing new,
harsher sanctions against Russia’s lucrative oil trade, seeking to tighten the squeeze on the Kremlin’s war machine just weeks before Trump returns to the White House. Details were still being worked out, but President Biden’s team was considering restrictions
that might target some Russian oil exports. Crude stockpiles at Cushing fell by 1.5 million barrels last week, the API reported. That would cut total holdings at the hub to the lowest in more than a year if confirmed by EIA today.  OPEC cut oil demand growth
forecasts for this year and next for a fifth straight month, making its deepest reduction to the 2024 outlook so far after agreeing to extend its supply curbs.  WTI +1.3%, Brent +1.2%, US Nat Gas +3.1%, RBOB +1.2%.

CURRENCIES: 

In currency markets, China’s yuan fell after Reuters reported that China was considering allowing a weaker currency next year to weather any higher tariffs under
a second Donald Trump presidency. Korea’s won and the China-sensitive Australian and New Zealand dollars also slipped. The Canadian dollar is flat after touching a 4-1/2 year low on Tuesday as traders saw an 89% chance of a super-sized 50 basis point rate
cut by the Bank of Canada today. India’s rupee weakened to its all-time low, pressured by heightened dollar bids in the non-deliverable forwards market, while likely intervention by the Reserve Bank of India helped limit losses, traders said. The yen weakened
even after BOJ officials were said to see little cost to waiting before raising interest rates, while still being open to a hike next week. The US dollar edged higher ahead of key inflation data this morning. US$ Index +0.15%, GBPUSD -0.3%, EURUSD -0.25%,
USDJPY +0.5%, AUDUSD -0.4%, NZDUSD -0.4%, USDCHF +0.1%, USDCAD ~flat. 

Spot Bitcoin +1.4%, Spot Ethereum +2.3%.

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
• Amcor (AMCR) Raised to Buy at BofA; PT $12.50
• Axis Capital (AXS) Raised to Equal-Weight at Wells Fargo; PT $89
• Bank of Marin (BMRC) Raised to Overweight at Stephens; PT $30
• Blackstone Mortgage (BXMT) Raised to Outperform at Wolfe; PT $20
• Cathay General (CATY) Raised to Overweight at Stephens; PT $60
• Fox Factory (FOXF) Raised to Buy at Stifel; PT $40
• Fulton Financial (FULT) Raised to Overweight at Stephens; PT $25
• Glaukos (GKOS) Raised to Buy at Citi; PT $162
• H&R REIT (HR-U CN) Raised to Outperform at RBC; PT C$11.50
• Hancock Whitney (HWC) Raised to Overweight at Stephens; PT $68
• ICU Medical (ICUI) Raised to Buy at Jefferies; PT $200
• Merit Medical (MMSI) Raised to Overweight at Wells Fargo
• Mettler-Toledo (MTD) Raised to Neutral at Citi; PT $1,300
• Mueller Industries (MLI) Raised to Buy at Northcoast; PT $105
• Penumbra (PEN) Raised to Overweight at Wells Fargo
• Peoples Financial (PFIS) Raised to Overweight at Stephens; PT $65
• QuidelOrtho (QDEL) Raised to Buy at Citi; PT $50
• SouthState Corp (SSB) Raised to Overweight at Stephens; PT $130
• Sportsman’s Warehouse (SPWH) Raised to Buy at B Riley; PT $4
• Wolverine World Wide (WWW) Raised to Buy at Stifel; PT $29
• Downgrades
• Ardagh Metal Packaging (AMBP) Cut to Underperform at BofA
• Baldwin Insurance Group (BWIN) Cut to Underweight at Wells Fargo
• Bausch + Lomb (BLCO CN) Bausch + Lomb Cut to Neutral at Citi
• C3.ai (AI) Cut to Underweight at JPMorgan; PT $28
• Cemex (CEMEXCPO MM) ADRs Cut to Underperform at RBC
• CervoMed Inc (CRVO) Cut to Underweight at Morgan Stanley
• Cut to Neutral at Chardan Capital Markets
• Cogent Biosciences Inc (COGT) Cut to Hold at Needham
• Curtiss-Wright (CW) Cut to Hold at Stifel; PT $370
• Dave & Buster’s (PLAY) Cut to Hold at Gordon Haskett; PT $34
• Cut to Market Perform at William Blair
• Cut to Hold at Truist Secs; PT $36
• Duolingo (DUOL) Cut to Neutral at BofA; PT $375
• E2open (ETWO) Cut to Sell at Goldman; PT $2.90
• East West Bancorp (EWBC) Cut to Equal-Weight at Stephens; PT $114
• Editas (EDIT) Cut to Equal-Weight at Wells Fargo; PT $4
• Esab (ESAB) Cut to Hold at Stifel; PT $130
• Fastenal (FAST) Cut to Hold at Stifel; PT $86
• Fortrea (FTRE) Cut to Neutral at Citi; PT $23
• FS KKR Capital (FSK) Cut to Neutral at B Riley; PT $21.50
• General Dynamics (GD) Cut to Peerperform at Wolfe
• Illumina (ILMN) Cut to Neutral at Citi; PT $165
• Ingersoll Rand (IR) Cut to Hold at Stifel; PT $107
• Lava Therapeutics (LVTX) Cut to Market Perform at JMP
• Magna Intl (MG CN) Cut to Sell at Goldman; PT C$58
• Moneylion (ML) Cut to Hold at Needham
• Monroe Capital (MRCC) Cut to Sell at B Riley; PT $7.25
• Oaktree Specialty (OCSL) Cut to Sell at B Riley; PT $15
• PagerDuty Inc (PD) Cut to Underweight at JPMorgan; PT $21
• Preferred Bank (PFBC) Cut to Equal-Weight at Stephens; PT $100
• Principal Financial (PFG) Cut to Underweight at Wells Fargo; PT $75
• Pulmonx (LUNG) Cut to Neutral at Citi; PT $7.50
• Q32 Bio Inc (QTTB) Cut to Market Perform at Leerink; PT $9
• Cut to Outperform at Raymond James; PT $22
• Cut to Equal-Weight at Wells Fargo; PT $16
• RxSight (RXST) Cut to Equal-Weight at Wells Fargo
• SiriusXM (SIRI) Cut to Neutral at Seaport Global Securities
• SmartFinancial (SMBK) Cut to Equal-Weight at Stephens; PT $29
• Sprinklr (CXM) Cut to Neutral at JPMorgan; PT $11
• Spruce Bio (SPRB) Cut to Market Perform at JMP
• Stellar Bancorp Inc (STEL) Cut to Equal-Weight at Stephens; PT $34
• Sylvamo (SLVM) Cut to Underperform at BofA
• Travelers (TRV) Cut to Underweight at Wells Fargo; PT $217
• Initiations
• Agilon Health (AGL) Rated New Market Perform at Bernstein; PT $2.50
• ANI Pharma (ANIP) Rated New Outperform at Leerink; PT $80
• Aurora Cannabis (ACB CN) Rated New Buy at TD Cowen; PT C$9
• AvidXchange (AVDX) Reinstated Buy at BTIG; PT $14
• BioNTech (BNTX) ADRs Rated New Overweight at Wells Fargo; PT $170
• Bloom Energy (BE) Rated New Neutral at Roth Capital Partners; PT $25
• Boston Scientific (BSX) Rated New Outperform at CICC; PT $116
• First Advantage (FA) Rated New Outperform at BMO; PT $24
• ITT Inc (ITT) Rated New Peerperform at Wolfe
• JetBlue (JBLU) Resumed Equal-Weight at Morgan Stanley; PT $8
• Monolithic Power (MPWR) Rated New Buy at Citi; PT $700
• Ollie’s Bargain (OLLI) Reinstated Buy at William O’Neil
• Onestream (OS) Rated New Buy at Goldman; PT $37
• Powell Industries (POWL) Reinstated Buy at Roth Capital Partners
• PPL (PPL) Rated New Outperform at BMO; PT $36
• Primoris Services (PRIM) Reinstated Overweight at KeyBanc; PT $96
• Reddit (RDDT) Rated New Overweight at Wells Fargo; PT $206
• Robex Resources (RBX CN) Rated New Speculative Buy at Canaccord
• SimilarWeb (SMWB) Rated New Buy at Goldman; PT $16
• SolarBank (SUNN CN) Rated New Buy at HC Wainwright; PT C$8.51
• Southwest Air (LUV) Resumed Overweight at Morgan Stanley; PT $42
• Spyre Therapeutics Inc (SYRE) Rated New Hold at JonesTrading
• Summit Therapeutics (SMMT) Rated New Overweight at Wells Fargo; PT $30
• Sweetgreen (SG) Rated New Sector Weight at KeyBanc
• Zeta (ZETA) Rated New Neutral at Goldman; PT $30

Data sources: Bloomberg, Reuters, CQG

David Wienke