Daily Game Plan

by Contributor
on January 3, 2025

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

TODAY’S ECONOMIC DATA:  10:00 a.m.: US December ISM Manufacturing,11:00 a.m.: Fed’s Barkin speaks, 12:00 p.m.: House
Speaker vote

Highlights and News:  

  • Texas man who backed Islamic State acted alone in New Orleans attack, FBI says
  • Donald Trump named his picks for leadership at the Treasury. Ken Kies will be assistant secretary for tax policy,
    while Samantha Schwab and Cora Alvi will be deputy chiefs of staff
  • South Korean presidential guards prevent arrest of impeached Yoon after tense stand-off

 

Global stocks were mostly higher on Friday, as U.S. stock futures edged up as markets aimed to break a five-day losing streak, while the dollar, oil, and gold prices
declined amid mixed economic signals.  President Joe Biden blocked the $14.1 billion sale of U.S. Steel to Nippon Steel, a decision that has raised concerns about U.S.-Japan relations. The Washington Post reported that senior officials had urged Biden to reconsider,
warning that the move could harm diplomatic ties. Elsewhere, investors withdrew a net $333 million from BlackRock’s iShares Bitcoin Trust ETF, marking the largest outflow since its inception. Additionally, China’s onshore yuan weakened past the 7.3 mark against
the dollar, indicating potential further depreciation as authorities adjust their currency management strategies.

 

 

EQUITIES:  

US stock futures rose, indicating a potential end to a five-day losing streak for Wall Street stocks, while Nasdaq 100 and Dow Jones Industrial Average futures also saw slight increases
of 0.2% and 0.1%, respectively. Notable premarket movers included Block (SQ), which gained 2% after a bullish upgrade from Raymond James, and Nu Skin Enterprises (NUS), whose shares surged 12% following the sale of its Mavely marketing platform for $250 million.
Conversely, Stellantis (STLA) fell 1.6% due to some of its electric vehicle models losing US tax credits under new regulations, and US Steel (X) plummeted 7% after reports that President Biden plans to block its sale to Nippon Steel.

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.4%, Russell 2000 +0.3%, DJI +0.2%.

European equities are mixed with energy stocks capping declines. European natural gas prices poised for a weekly 5% gain as markets grapple with depleting stockpiles
and tighter supplies. Data from the British Retail Consortium showed the number of people visiting shops last year fell by 2.2%, the biggest drop since 2021. Shares in Italy are also lower, weighed down by a 3.7% drop by Stellantis after reporting vehicle
production fell by 37% last year. Shares of US and European drinks makers declined after the US Surgeon General said labels on alcohol products like beer and wine should carry warnings of their links to cancer. Anheuser-Busch InBev NV, the maker of Budweiser
beer, fell 2.6% in Brussels. Shares in Nordic markets are mostly higher. Stoxx 600 -0.29%, CAC -0.93%, FTSE 100 -0.06%

Asian stocks rebounded to erase Thursday’s losses, boosted by gains in the region’s technology companies. Trading in Japan was closed for a bank holiday. The MSCI Asia
Pacific excluding Japan index rose as much as 0.8%, the most since Dec. 23, with TSMC, Xiaomi and SK Hynix contributing the most. South Korean shares led the gains in the region after five days of selling. Ecopro leads a rally among Korean EV battery-related
shares after some Hyundai Motor and Kia car models became eligible for US tax credits. Benchmarks also gained in Hong Kong, Taiwan and Australia, while India’s fell. Stocks in mainland China were mixed, seeing weakness in the country’s small-caps stocks after
the CSI 2000 index marked its worst day in over a week. China’s CSI 300 slumped 1.2%, while the Hang Seng Index rose 0.7% aided by Chinese state economic planner’s announcement that the nation will issue more ultra-long special treasury bonds in 2025 to support
trade-in programs and major projects. Hang Seng +0.7%, China’s CSI 300 -1.18%, ASX +0.6%, Kospi +1.79%

FIXED INCOME: 
 

Treasuries slightly increase across the curve, benefiting from a rally in gilts that led European rates, with yields improving by 1 to 2 basis points. Key events
for the US market include the release of December ISM manufacturing data at 10 a.m. and a speech by Fed’s Barkin at 11 a.m. The upcoming coupon auctions, starting Monday, may pose a challenge as they are scheduled earlier than usual due to the National Day
of Mourning for former President Jimmy Carter. As of now, the 10-year Treasury yield hovers around 4.545%, trailing behind gilts by 1.5 basis points, while the corporate bond issuance remains quiet ahead of expected activity next week.

 

 

METALS: 

Gold prices declined as traders awaited key US economic data that could influence interest rate forecasts for the year ahead, with bullion falling 0.1% to $2,654
an ounce, erasing earlier gains. Gold -0.2%, Silver +0.8%. 

 

 

 

ENERGY:   

 

Oil prices inched higher on Friday and are still on track for solid weekly gains, driven by optimism surrounding China’s plans to stimulate its economy as the world’s
largest crude importer. WTI crude for February delivery fell 7 cents to $73.06 a barrel, marking a projected weekly increase of 3.5%, while March Brent crude dipped 12 cents to $75.81, with a 2.7% weekly gain. The positive sentiment was bolstered by comments
from Chinese President Xi Jinping and Beijing’s announcement to enhance the issuance of ultralong-term special Treasury bonds aimed at promoting significant equipment upgrades and consumer goods trade-ins. Despite geopolitical uncertainties, traders remain
hopeful that government stimulus measures will boost oil demand in the coming months .WTI +0.2%, Brent +0.05%

 

 

CURRENCIES: 

In currency markets, the US dollar index weakened for the first time in eight sessions ahead of the ISM manufacturing data, with the Dollar Index slipping as New
Zealand and Australia’s currencies gained against the greenback. USDJPY fell 0.2% to 157.25, staying below trendline resistance. Other currency movements included AUD/USD and NZD/USD both rising by 0.2%.  US$ Index -0.3%, GBPUSD +0.2%, EURUSD +0.3%, USDJPY
-0.2%, AUDUSD +0.2%, NZDUSD +0.2%

 

 

 

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
    • Block (SQ) Raised to Outperform at Raymond James
    • Boyd Gaming (BYD) Raised to Buy at Jefferies; PT $92
    • C.H. Robinson (CHRW) Raised to Positive at Susquehanna; PT $130
    • Carlyle Group (CG) Raised to Outperform at Wolfe; PT $60
    • Chewy (CHWY) Raised to Outperform at Wolfe; PT $42
    • Delek US Holdings (DK) Raised to Peerperform at Wolfe
    • Devon (DVN) Raised to Outperform at Wolfe; PT $45
    • Diamondback (FANG) Raised to Outperform at Wolfe; PT $190
    • EOG Resources (EOG) Raised to Outperform at Wolfe; PT $143
    • FNF (FNF) Raised to Buy at Deutsche Bank
    • Gulfport Energy (GPOR) Raised to Outperform at Wolfe; PT $207
    • Hub Group (HUBG) Raised to Positive at Susquehanna; PT $55
    • Ingersoll Rand (IR) Raised to Hold at CFRA
    • JB Hunt (JBHT) Raised to Positive at Susquehanna; PT $200
    • JPMorgan (JPM) Raised to Outperform at Wolfe; PT $269
    • Knight-Swift (KNX) Raised to Positive at Susquehanna; PT $67
    • Las Vegas Sands (LVS) Raised to Buy at Jefferies; PT $69
    • Matador Resources (MTDR) Raised to Outperform at Wolfe; PT $72
    • Phillips 66 (PSX) Raised to Outperform at Wolfe; PT $143
    • PulteGroup (PHM) Raised to Outperform at Wedbush; PT $135
    • Range Resources (RRC) Raised to Outperform at Wolfe; PT $42
    • Robert Half Inc (RHI) Raised to Equal-Weight at Barclays
    • Shell (SHEL LN) ADRs Raised to Outperform at Wolfe
    • Steel Dynamics (STLD) Raised to Outperform at BNPP Exane
    • Surrozen (SRZN) Raised to Buy at Guggenheim; PT $45
    • Vital Energy Inc (VTLE) Raised to Peerperform at Wolfe
    • Werner Enterprises (WERN) Raised to Neutral at Susquehanna; PT $38
    • Workiva (WK) Raised to Outperform at Raymond James; PT $135
  • Downgrades
    • Acadia Pharma (ACAD) Cut to Neutral at Guggenheim; PT $20
    • BNY Mellon (BK) Cut to Peerperform at Wolfe
    • Bumble (BMBL) Cut to Peerperform at Wolfe
    • Commercial Metals (CMC) Cut to Neutral at BNPP Exane
    • Immunovant (IMVT) Cut to Peerperform at Wolfe
    • Imperial Oil (IMO CN) Cut to Peerperform at Wolfe
    • Intapp (INTA) Cut to Market Perform at Raymond James
    • Lazard Inc (LAZ) Cut to Peerperform at Wolfe
    • Portland General (POR) Cut to Neutral at UBS
    • Quisitive Technology Sol (QUIS CN) Cut to Sector Perform at Scotiabank
    • Red Rock Resorts (RRR) Cut to Hold at Jefferies; PT $51
    • RingCentral (RNG) Cut to Outperform at Raymond James
    • Softchoice (SFTC CN) Cut to Sector Perform at Scotiabank; PT C$24.50
    • TWFG (TWFG) Cut to Neutral at JPMorgan; PT $33
    • Vertex Inc (VERX) Cut to Market Perform at Raymond James
  • Initiations
    • Elevation Oncology (ELEV) Rated New Outperform at William Blair

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

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