Daily Game Plan

by Contributor
on January 8, 2025

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

TODAY’S ECONOMIC DATA:  8:00ET Fed’s Waller speaks; 8:15ET ADP Employment Change, Initial Jobless Claims; 10:00ET
Wholesale Inventories, Wholesale Trade; 1:00ET 30-Year Bond Auction; 2:00ET FOMC Minutes; 3:00ET Consumer Credit

Fed’s Waller: “More cuts will be appropriate, expect inflation to move down. Don’t expect tariffs to have significant impact on inflation”

Highlights and News:  

  • TRUMP WEIGHS EMERGENCY DECLARATION FOR NEW TARIFF PROGRAM: CNN
  • Palestinian Authority Requests $680 Million In Security Assistance From US
  • Trump’s Mideast Envoy Hopes Hostage Deal With Hamas Is Close
  • Bank of England to relax rules for banks and insurers – FT
  • A wildfire in the Pacific Palisades area of Los Angeles has forced 30,000 people to evacuate

 

Global stocks were inching higher after a negative Asian session until CNN reported that President-elect Trump is considering a national economic emergency declaration
to allow for a new universal tariff program. Indices in Europe and US equity futures reversed gains, sliding sharply as the headline hit.  On the data front, German factory orders plunged 5.4% in November, much worse than 0.2% expected, just weeks before federal
elections. French consumer confidence unexpectedly fell in December to the lowest level in a year. Sweden’s core inflation rate slowed more than expected at the end of the year. Yields on China’s 10-year sovereign debt hit record lows despite Beijing’s recent
stimulus announcements, suggesting growing concern the nation will fail to avoid a deflationary spiral mirroring 1990s Japan.     

 

EQUITIES:   Only 52% of S&P 500 stocks are
trading above their 200 Day moving average

US equity futures reversed gains as CNN reported that Donald Trump is considering declaring a national economic emergency to provide legal ground for universal tariffs. Investors remain
cautious ahead of upcoming employment data and minutes from the Federal Reserve’s latest meeting. Traders will also be monitoring the US non-farm payrolls data due later this week, with any stronger-than-expected print likely to trigger further risk-off sentiment.
Fed Governor Christopher Waller said he believes inflation will continue to cool toward the central bank’s 2% target, offering support for additional interest-rate cuts this year. He added that he doesn’t expect tariffs to have significant impact on inflation. 

Futures ahead of the bell: E-Mini S&P -0.25%, Nasdaq -0.3%, Russell 2000 -0.9%, DJI -0.2%.

In pre-market trading, AAR (AIR) rises 3% after the provider of aviation services and parts posted fiscal 2Q sales that soared past estimates. Flutter (FLUT) slips
2% after the gambling firm cut its guidance. Health Catalyst (HCAT) climbs 5% as KeyBanc turned bullish, saying the stock’s valuation is deeply discounted. Jasper Therapeutics (JSPR) falls 41% after posting data from the Beacon study of briquilimab. Olo (OLO)
slips 5% after Piper Sandler downgraded the restaurant software firm. Palo Alto Networks (PANW) declines 2% after the security software received a pair of analyst downgrades. Quantum stocks tumbled after Nvidia CEO Jensen Huang said that “very useful” quantum
computers are likely decades away. Quantum Computing (QUBT) -20%, D-Wave Quantum (QBTS) -21%, Rigetti Computing (RGTI) -23%, IonQ (IONQ) -13%. Sana Biotechnology (SANA) soars 232% after the company reported positive data from a study of its treatment of type
1 diabetes.

Nasdaq futures have held above the 50dma since mid-September.

European gauges slipped after earlier gains, pressured by rising bond yields and apprehension over how Donald Trump’s policies will impact global trade. The Stoxx 600
is near lows on the day with retailers, utilities, energy stocks and real estate stocks among the worst performers. France’s CAC 40 Index, which is heavy in luxury names, dropped the most. Renewable energy stocks fell after Trump said that he would seek to
prevent the construction of wind farms during his second term.  Defense stocks were among the top gainers after Trump called on NATO members to spend the equivalent of 5% of their economic output on defense, more than double the current target. Stoxx 600 -0.5%,
DAX -0.25%, CAC -1%, FTSE 100 -0.4%. Real Estate -2.1%, Energy -2%, Retail -1.9%, Utilities -1.9%. Healthcare +0.6%, Financial Services +0.1%.

Shares in Asia were mostly lower as concerns over a delay in further Federal Reserve interest-rate cuts weighed on sentiment. Tech shares tracked their US peers lower
after Nvidia’s product presentation failed to lift near-term prospects. The MSCI Asia Pacific Index fell 0.7%, with TSMC and Tencent among the biggest drags. Tencent repurchased the most shares in nearly two decades after a selloff sparked by its inclusion
on a US blacklist. Samsung Electronics bucked the trend after Nvidia’s founder expressed confidence in the Korean company.  Chinese equities edged lower as investors remained cautious after the addition of several firms to the Pentagon’s blacklist. Hang Seng
Tech -1.1%, Taiwan -1%, Hang Seng Index -0.9%, Philippines -0.7%, Topix -0.6%, CSI 300 -0.2%, Sensex -0.05%. Vietnam +0.3%, ASX 200 +0.8%, Kospi +1.2%, Singapore +1.5%.

FIXED INCOME: 
 

Treasuries see downside pressure into early US session, reaching day’s lows amid bigger selloff in core European rates. UK gilts lead losses, with 10-year yields
reaching highest level since 2008. US yields are cheaper by 2bp-4bp across the curve with 10-year yield higher by 4bp near 4.722%. Amundi and Citi’s wealth division joined a growing chorus saying that 10-year Treasury yields may test 5% again — a level not
seen since October 2023 — as the economy hums along and investors brace for Trump’s inflationary policies. That would offer a buying opportunity, they said. US session includes a 30-year bond reopening poised to draw highest yield since 2007.

 

 

METALS: 

Gold steadied as traders balanced dwindling prospects for aggressive US rate cuts in 2025 against growing haven demand amid fears Donald Trump’s return to the White
House could trigger a global trade war. Spot gold +0.2%, Silver +0.2%, Copper -0.3%.

 

 

ENERGY:   

 

Oil gained as an industry report pointed to a seventh weekly draw in US stockpiles.  Inventories at the key hub in Cushing also slumped by 3.1 million barrels, the
API said. That would be the biggest drop since August 2023 if confirmed by the EIA today. WTI futures tested the 200 day moving average for the first time since early October, before paring some gains as a stronger dollar weighed. WTI +0.7%, Brent +0.5%, US
Nat Gas +4.3%, RBOB +0.1%. 

 

 

CURRENCIES: 

In currency markets, the dollar rose for a second day as traders assessed the latest strong US data and comments from President-elect Donald Trump. CNN report that
Trump is considering declaring a national economic emergency to push through his tariff plans. Sterling plummets by more than 1% versus the dollar as a surge in borrowing costs complicates the government’s funding plans. The Aussie$ fell after data showed
Australia’s key inflation gauge slipped in November to edge closer to the central bank’s target band, suggesting that policymakers may have room to consider easing sooner. China stepped up its support for the yuan as the currency weakened toward the edge of
its allowed trading range against the dollar.  The PBOC set a daily reference rate that was stronger than analyst estimates by the most since April, with the currency approaching a record low offshore this week.   US$ Index +0.6%, GBPUSD -1.2%, EURUSD -0.6%,
USDJPY +0.3%, AUDUSD -0.7%, NZDUSD -0.7%, USDCHF +0.25%.

 

 

 

Spot Bitcoin -1.5%, Spot Ethereum -0.4%.   

 

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
    • Accenture (ACN) Raised to Outperform at Wolfe; PT $425
    • Advanced Drainage (WMS) Raised to Buy at UBS
    • Allstate (ALL) Raised to Outperform at Evercore ISI; PT $226
    • Aon PLC (AON) Raised to Outperform at Evercore ISI; PT $420
    • Arthur J Gallagher (AJG) Raised to Overweight at Piper Sandler
    • Autodesk (ADSK) Raised to Overweight at Piper Sandler; PT $357
    • BJ’s Restaurants (BJRI) Raised to Hold at Gordon Haskett; PT $36
    • Canadian Pacific Kansas (CP CN) Raised to Outperform at Wolfe
    • Cardinal Health (CAH) Raised to Buy at TD Cowen; PT $144
    • Coca-Cola (KO) Raised to Buy at TD Cowen
    • Corpay (CPAY) Raised to Outperform at Wolfe; PT $420
    • Couche-Tard (ATD CN) Raised to Outperform at National Bank; PT C$89
    • Ferguson (FERG) Raised to Buy at BofA
    • Floor & Decor (FND) Raised to Equal-Weight at Barclays; PT $91
    • GE Healthcare (GEHC) Raised to Buy at Jefferies; PT $103
    • George Weston (WN CN) Raised to Sector Outperform at Scotiabank
    • Globe Life (GL) Raised to Outperform at Evercore ISI
    • HA Sustainable Infrastructure (HASI) Raised to Buy at Citi; PT $36
    • Health Catalyst (HCAT) Raised to Overweight at KeyBanc; PT $9
    • L3Harris (LHX) Raised to Outperform at Bernstein; PT $267
    • Martin Marietta (MLM) Raised to Outperform at Wolfe; PT $563
    • McCormick (MKC) Raised to Buy at TD Cowen
    • Mohawk Industries (MHK) Raised to Outperform at Wolfe; PT $150
    • Nasdaq Inc. (NDAQ) Raised to Buy at Deutsche Bank; PT $98
    • NetEase (NTES) ADRs Raised to Overweight at Morgan Stanley; PT $108
    • Northrop Grumman (NOC) Raised to Overweight at Wells Fargo; PT $595
    • Phreesia (PHR) Raised to Outperform at RBC; PT $32
    • PulteGroup (PHM) Raised to Buy at UBS; PT $148
    • Reliance (RS) Raised to Peerperform at Wolfe
    • RH (RH) Raised to Overweight at Barclays; PT $515
    • RPM International (RPM) Raised to Overweight at Wells Fargo; PT $140
      • Raised to Buy at CFRA; PT $140
    • Sana Biotech (SANA) Raised to Buy at TD Cowen
    • Shake Shack (SHAK) Raised to Buy at Gordon Haskett; PT $154
    • Symbotic (SYM) Raised to Buy at DA Davidson; PT $35
    • Tapestry (TPR) Raised to Overweight at Barclays; PT $87
    • Taylor Morrison (TMHC) Raised to Outperform at Wolfe; PT $76
    • Travelers (TRV) Raised to Buy at Goldman; PT $278
    • Twilio (TWLO) Raised to Outperform at Mizuho Securities; PT $140
    • UPS (UPS) Raised to Outperform at Wolfe
    • Vale (VALE3 BZ) ADRs Raised to Peerperform at Wolfe
    • Willis Towers (WTW) Raised to Outperform at Evercore ISI
    • Winnebago Industries (WGO) Raised to Overweight at KeyBanc; PT $58
    • Workday (WDAY) Raised to Buy at Deutsche Bank
  • Downgrades
    • Adobe (ADBE) Cut to Hold at Deutsche Bank
    • AIG (AIG) Cut to Neutral at Goldman
    • AMD (AMD) Cut to Reduce at HSBC; PT $110
    • Aris Water Solutions Inc (ARIS) Cut to Neutral at Citi; PT $26
    • Dayforce (DAY) Cut to Hold at Deutsche Bank
    • Ferguson (FERG) Cut to Neutral at UBS; PT $193
    • Fidelis Insurance (FIHL) Cut to Sell at Goldman
    • Inari Medical (NARI) Cut to Hold at Nephron Research; PT $80
      • Cut to Neutral at BTIG
    • J M Smucker (SJM) Cut to Hold at TD Cowen
    • Jeld-Wen (JELD) Cut to Neutral at UBS; PT $9
    • Kimberly-Clark (KMB) Cut to Hold at TD Cowen
    • Leidos (LDOS) Cut to Hold at TD Cowen; PT $165
    • Lennar (LEN) Cut to Peerperform at Wolfe
    • Loblaw (L CN) Cut to Sector Perform at Scotiabank; PT C$200
    • Merck & Co (MRK) Cut to Hold at Truist Secs; PT $110
    • Olo Inc (OLO) Cut to Neutral at Piper Sandler; PT $8
    • OptimizeRx (OPRX) Cut to Sector Perform at RBC; PT $6
    • Palo Alto Networks (PANW) Cut to Neutral at BTIG
      • Cut to Hold at Deutsche Bank
    • Paycor HCM (PYCR) Cut to Market Perform at BMO; PT $22.50
      • Cut to Hold at Stifel; PT $22.50
      • Cut to Hold at Needham
    • Payoneer Global (PAYO) Cut to Peerperform at Wolfe
    • Polaris (PII) Cut to Sector Weight at KeyBanc
    • Science Applications (SAIC) Cut to Hold at TD Cowen
    • SolarEdge (SEDG) Cut to Sell at Citi; PT $9
    • Stella-Jones (SJ CN) Cut to Reduce at Veritas Investment Research Co
    • Texas Roadhouse (TXRH) Cut to Hold at Gordon Haskett; PT $192
    • TransAlta (TA CN) Cut to Neutral at CIBC; PT C$23
    • WK Kellogg (KLG) Cut to Sell at TD Cowen
  • Initiations
    • Altimmune (ALT) Rated New Buy at Stifel; PT $18
    • Argo Blockchain (ARB LN) ADRs Rated New Underperform at KBW; PT 25 cents
    • Axon (AXON) Rated New Buy at TD Cowen; PT $700
    • Beacon Roofing (BECN) Reinstated Buy at Stifel; PT $115
    • Bitfarms/Canada (BITF CN) Rated New Outperform at KBW; PT C$5.02
    • Builders FirstSource (BLDR) Reinstated Buy at Stifel; PT $175
    • Cipher Mining (CIFR) Rated New Outperform at KBW; PT $10
    • Context Therapeutics (CNTX) Rated New Market Outperform at JMP; PT $4
    • Galaxy Digital (GLXY CN) Rated New Outperform at KBW; PT C$42
    • Gambling Group (GAMB) Rated New Buy at Benchmark; PT $16
    • Hive Digital Technologie (HIVE CN) Rated New Outperform at KBW; PT C$14.34
    • Hut 8 Corp (HUT CN) Rated New Outperform at KBW; PT C$43.03
    • Levi Strauss (LEVI) Rated New Overweight at Barclays; PT $24
    • Lithia & Driveway (LAD) Rated New Buy at Benchmark; PT $400
    • MasTec (MTZ) Rated New Buy at Guggenheim; PT $195
    • Nektar (NKTR) Rated New Buy at B Riley; PT $4
    • Norwood Financial (NWFL) Rated New Neutral at Piper Sandler; PT $28
    • Primoris Services (PRIM) Rated New Buy at Guggenheim; PT $102
    • Probe Gold Inc (PRB CN) Rated New Sector Outperform at Scotiabank
    • Quanta Services (PWR) Rated New Neutral at Guggenheim
    • Riot Platforms (RIOT) Rated New Outperform at KBW; PT $17
    • Solid Biosciences (SLDB) Rated New Buy at Truist Secs; PT $16
    • Structure Therapeutics (GPCR) ADRs Rated New Buy at Stifel; PT $50
    • Summit Therapeutics (SMMT) Rated New Buy at Truist Secs; PT $35
    • Terawulf (WULF) Rated New Market Perform at KBW; PT $7.50
    • West Pharma (WST) Rated New Buy at Citi; PT $400

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

Categories:

Charts

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