Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Empire Manufacturing; 9:45ET S&P Global US Manufacturing, Services, Composite PMIs

Highlights and News:  

• PBOC VOWS TO CUT RRR, INTEREST RATES AT APPROPRIATE TIME
• Bashar al-Assad Claims Russians Forced His Evacuation from Syria
• MICROSTRATEGY ACQUIRES 15,350 BITCOINS FOR $1.5B
• The Israeli military says sirens sounded across central Israel after a missile was fired from Yemen and was shot down

Global stocks nudged lower on soft economic numbers from China and Europe and as surging bond yields challenged equity valuations, at the start of a week packed with
central bank meetings and major economic data. The Federal Reserve will lead the pack on Wednesday with markets pricing a 96% probability it will cut rates by 25 basis points. Data out of China showed retail sales rose just 3.0% in November, compared with
a year earlier, well below market forecasts of 5%. France’s new Prime Minister Francois Bayrou met with far-right leader Marine Le Pen today, kicking off an effort to form a government that can push a budget through a divided Parliament. Germany’s services
sector unexpectedly returned to growth in December, though factory woes worsened. German Chancellor Olaf Scholz will submit to a parliamentary vote of confidence today, which he intends to lose, to trigger a snap election on Feb. 23.  

EQUITIES:  

US equity futures are higher, shrugging off downbeat performances in other key markets as traders prepared for a slate of interest-rate decisions this week. Nasdaq outperforms on optimism
about MicroStrategy’s inclusion in the Nasdaq 100. The S&P 500 will see more balanced EPS growth and better market breadth next year, Morgan Stanley strategists said. The Fed’s two-day meeting begins tomorrow with a 25bp rate cut expected. Goldman economists
expect the FOMC to signal a slower pace of easing and to skip cutting rates in January.

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.5%, Russell 2000 +0.15%, DJI +0.2%.

In pre-market trading, MicroStrategy (MSTR) advanced as much as 6%, fueled by its pending inclusion in the Nasdaq 100. Axon (AXON) rises 2% as the stock will be added
to Nasdaq 100 Index in annual reconstitution of the index. Super Micro Computer (SMCI) falls 15% after the announcement that the stock is to be removed from the Nasdaq 100 in the annual reconstitution of the index. Capri Holdings (CPRI) climbs 5% after Women’s
Wear Daily reported that the fashion company is working with a bank to find buyers for its Versace and Jimmy Choo brands. Edgewise Therapeutics (EWTX) gains 23% after the company said its Phase 2 trial of sevasemten in individuals with Becker muscular dystrophy
met its primary endpoint. Ford shares (F) falls 2% as Jefferies turns bearish on the automaker. Honeywell (HON) advances 3% after saying it’s considering strategic options, including the possible separation of its aerospace business. Red Cat (RCAT) rises 14%
after the drone tech company announced a strategic partnership with Palantir Technologies. Super Micro Computer (SMCI) falls 15% after the announcement that the stock is to be removed from the Nasdaq 100 in the annual reconstitution of the index. Teradyne,
NetApp and Keysight Technologies all rise after JPMorgan upgraded the three tech hardware firms amid growing demand for their products. Teradyne (TER) +3%, NetApp (NTAP) +3%, Keysight (KEYS) +3%.

Materials ETF on Longest Losing Streak in 24 Years

European gauges slipped in the wake of disappointing retail-sales data in China, while traders gauged the impact of the Moody’s Ratings downgrade of France on Friday.
A contraction in the euro-area’s private sector also dragged on European equities.  Auto stocks led losses, with Jeep and Dodge-maker Stellantis down over 4% as investors continue to assess the company’s new strategy following the sudden departure of its CEO.
The healthcare sector outperforms, lifted by Ozempic maker Novo Nordisk A/S, which announced it would invest $1.2 billion to build a new major factory in Denmark. France’s CAC 40 is underperforming its regional peers after fresh indicators showed that private-sector
business activity in the country shrank for a fourth month as the fall of the government over a budget dispute sapped confidence. Britain’s private-sector firms cut jobs at the fastest pace since the global financial crisis — outside the pandemic. Stoxx 600
-0.25%, DAX -0.3%, CAC -0.7%, FTSE 100 -0.25%. Autos -2.5%, Real Estate -1.5%, Food & Bev -1.1%, Construction -0.9%, Travel -0.9%. Healthcare +0.5%, Financial Services +0.3%, Telecom +0.2%.

Shares in Asia were lower, dragged by shares in mainland China after the country’s retail sales data came in below expectations. China’s industrial output growth quickened
slightly in November, while retail sales disappointed. China’s regulators pledged to boost efforts to stabilize the housing and equity markets, as well as conduct more effective fiscal policies. The MSCI Asia Pacific Index slid 0.3%, led lower by key members
Alibaba, Tencent and BHP Group. Shares in Australia slumped for a fifth straight day. TSMC, Alchip and MediaTek shares gained after their price targets were raised at Morgan Stanley. Indonesia -0.9%, Hang Seng Index -0.9%, Thailand -0.8%, ASX 200 -0.55%, CSI
300 -0.55%, Sensex -0.5%, Topix -0.3%, Kospi -0.2%, Nikkei 225 -0.03%. Singapore +0.3%, Vietnam +0.1%.

FIXED INCOME: 
 

Treasuries hold small gains, tracking bigger rallies in bunds and gilts after mixed European PMI readings and recovering some of last week’s steep loss. US yields
are richer by 1.5bp to 3bp across maturities with gains led by front-end and belly, steepening 5s30s spread by ~1bp. 10-year yield is down 2bps around 4.37%, having climbed 24 basis points last week. US session includes Empire manufacturing survey and US PMIs,
with November retail sales ahead Tuesday before Wednesday’s Fed rate decision. Treasury coupon auctions this week include $13 billion 20-year bond reopening Tuesday and $22 billion 5-year TIPS reopening Thursday.    

METALS: 

Gold edged higher ahead of the Federal Reserve’s final interest-rate decision of the year, with traders also weighing the policy outlook for 2025. Bullion’s gain
followed a 2.6% decline in the previous two sessions on the back of mixed US data last week — including accelerating wholesale inflation and higher-than-expected jobless claims. The Fed is expected to cut interest rates by 25 basis points at its meeting on
Wednesday, and swap traders are pricing in a total of three quarter-point cuts over the next 12 months. Spot gold +0.6%, Silver +0.5%, Copper -0.2%.

ENERGY:   

Oil slipped after a weekly advance as a slew of economic data from China reinforced concerns over weakening demand in the biggest importer. Crude has been caught
in a tight range since mid-October, with prices trapped between OPEC+ supply curbs and a dour outlook in China. Still, traders remained cautious ahead of the Federal Reserve’s policy meeting later this week. China’s crude oil imports soared in November, but
most of the increase in purchases likely went to boosting stockpiles.  WTI -0.8%, Brent -0.6%, US Nat Gas -3%, RBOB -0.5%.

CURRENCIES: 

In currency markets, the euro reversed earlier gains after data showed that the euro-area’s private sector shrank less than anticipated in December. Sterling rose
with data showing a beat in services PMI. The Aussie$ eased as China’s industrial production data came in line with economist forecasts while retail sales grew slower than estimated in November. China’s slowdown, weaker domestic growth and the need for additional
spending in some areas are delivering headwinds for Australia’s economy, Treasurer Jim Chalmers said on Sunday. The yen weakens toward the 154 level against the dollar as traders continue to speculate that the BOJ may stand pat at its meeting this week.  Roughly
a half dozen sell-side strategists are now forecasting the world’s reserve currency will peak as early as mid-2025 before starting to decline. US$ Index -0.03%, GBPUSD +0.35%, EURUSD -0.03%, USDJPY +0.2%, AUDUSD -0.05%, NZDUSD +0.2%, USDSEK +0.65%. 

Spot Bitcoin +0.7%, Spot Ethereum +0.8%. Bitcoin surged to a record high above $106,000 after Donald Trump suggested he plans to create a US bitcoin strategic reserve
similar to its strategic oil reserve.

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
• Ametek (AME) Raised to Buy at BofA
• Banco BBVA Argentina SA (BBAR AR) BBAR US Raised to Overweight at Morgan Stanley; PT $27
• Banco Macro (BMA AR) ADRs Raised to Overweight at Morgan Stanley; PT $125
• Bristol Myers (BMY) Raised to Buy at Jefferies; PT $70
• Broadcom (AVGO) Raised to Outperform at CICC; PT $220
• CBRE (CBRE) Raised to Overweight at JPMorgan; PT $163
• Comstock Resources (CRK) Raised to Neutral at Mizuho Securities
• Concentra Group Holdings Parent (CON) Raised to Buy at BofA
• Conoco (COP) Raised to Outperform at Mizuho Securities; PT $134
• Denali Therapeutics (DNLI) Raised to Buy at Stifel; PT $37
• EQT Corp (EQT) Raised to Outperform at Mizuho Securities; PT $57
• Equifax (EFX) Raised to Outperform at BNPP Exane; PT $305
• Grupo Financiero Galicia (GGAL AR) GGAL US Raised to Overweight at Morgan Stanley; PT $92
• Keysight (KEYS) Raised to Overweight at JPMorgan; PT $200
• LifeStance Health (LFST) Raised to Buy at Goldman; PT $10
• Lundin Mining (LUN CN) Raised to Buy at Veritas Investment Research Co
• Macy’s (M) Raised to Buy at Gordon Haskett; PT $20
• NetApp Inc (NTAP) Raised to Overweight at JPMorgan; PT $160
• Okta (OKTA) Raised to Overweight at JPMorgan; PT $100
• Peabody Energy (BTU) Raised to Outperform at BMO; PT $26
• Supervielle (SUPV AR) ADRs Raised to Overweight at Morgan Stanley; PT $19
• Teradyne (TER) Raised to Overweight at JPMorgan; PT $158
• Toromont Industries (TIH CN) Raised to Outperform at National Bank
• Trimble (TRMB) Raised to Outperform at Wolfe; PT $90
• US Physical Therapy (USPH) Raised to Buy at BofA
• Zymeworks (ZYME) Raised to Overweight at JPMorgan; PT $18
• Downgrades
• Adient (ADNT) Cut to Equal-Weight at Wells Fargo; PT $20
• Alector (ALEC) Cut to Hold at Stifel; PT $4
• Amer Sports (AS) Cut to Hold at HSBC; PT $30
• Biogen (BIIB) Cut to Hold at Stifel; PT $175
• Brown-Forman (BF/B) Cut to Hold at Truist Secs; PT $45
• Carisma Therapeutics Inc (CARM) Cut to Neutral at HC Wainwright
• CNX Resources (CNX) Cut to Underperform at Mizuho Securities; PT $38
• Eagle Materials (EXP) Cut to Hold at Jefferies; PT $310
• Editas (EDIT) Cut to Underweight at JPMorgan
• Essa Pharma (EPIX) Cut to Hold at Bloom Burton & Co; PT $2.25
• Ford (F) Cut to Underperform at Jefferies; PT $9
• Keros Therapeutics (KROS) Cut to Neutral at Guggenheim
• Logitech (LOGN SW) Cut to Neutral at BofA
• Martinrea (MRE CN) Cut to Market Perform at BMO; PT C$11
• Masco (MAS) Cut to Hold at Jefferies; PT $89
• Microchip (MCHP) Cut to Underperform at BofA; PT $65
• Netflix (NFLX) Cut to Hold at Loop Capital; PT $950
• Northern Oil & Gas Inc (NOG) Cut to Neutral at Mizuho Securities
• Par Pacific (PARR) Cut to Neutral at Mizuho Securities; PT $22
• PBF Energy (PBF) Cut to Underperform at Mizuho Securities; PT $31
• Robert Half Inc (RHI) Cut to Underperform at BNPP Exane; PT $64
• Summit Materials (SUM) Cut to Hold at Jefferies; PT $52.50
• Suncor (SU CN) Cut to Equal-Weight at Morgan Stanley; PT C$56
• Tenet (THC) Cut to Neutral at Goldman; PT $147
• Universal Health (UHS) Cut to Neutral at Goldman; PT $197
• Initiations
• Addus HomeCare (ADUS) Rated New Market Outperform at JMP; PT $150
• Benitec Biopharma (BNTC) Rated New Buy at HC Wainwright; PT $28
• Booking (BKNG) Rated New Outperform at CICC; PT $5,700
• Colliers International (CIGI CN) Rated New Neutral at JPMorgan
• General Motors (GM) Rated New Outperform at CICC; PT $65
• Grindr (GRND) Rated New Buy at Goldman; PT $20
• Groupe Dynamite (GRGD CN) Rated New Buy at Desjardins; PT C$25
• Rated New Sector Outperform at Scotiabank
• Rated New Outperform at National Bank; PT C$25
• Rated New Buy at TD Cowen; PT C$28
• Rated New Buy at Canaccord; PT C$32
• Rated New Neutral at Goldman; PT C$25
• Rated New Outperform at RBC; PT C$27
• Rated New Outperform at BMO; PT C$25
• Hovnanian (HOV) Rated New Neutral at Wedbush; PT $155
• Mereo Biopharma (MREO) ADRs Rated New Buy at Van Lanschot Kempen
• Putnam New York Tax Exempt Income Fund (PEIBX) ProMIS Neurosciences Rated New Buy at Guggenheim; PT $6
• US Physical Therapy (USPH) Rated New Market Outperform at JMP; PT $113
• Waldencast (WALD) Rated New Hold at TD Cowen; PT $4.30
• Zenas Biopharma (ZBIO) Rated New Buy at HC Wainwright; PT $30

Data sources: Bloomberg, Reuters, CQG

David Wienke