Daily Game Plan

by Contributor
on January 10, 2025

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

TODAY’S ECONOMIC DATA:  8:30ET *Employment Report; 10:00ET U. of Mich. Sentiment, SCOTUS hears arguments on proposed
TikTok US ban; 10:05ET Fed’s Goolsbee speaks on CNBC

The whisper number for December non-farm payrolls is at 180,000 while economists see a gain of 165,000

Highlights and News:  

  • The California fires have burned more than 10,000 structures, 180k+ evacuated
  • Trump Says Meeting With Putin Is Being Arranged
  • A New York Court has removed Judge Arthur Engoron from President Trump’s civil fraud case

 

Global stocks faced pressure as they awaited a US jobs report that could either intensify or mitigate the ongoing sell-off in the global bond market. Reports that
Bank of Japan officials are likely to discuss raising their inflation outlook at a policy meeting this month supports the case for an interest-rate hike. China said it has sufficient fiscal firepower to respond to external challenges, vowing to better execute
pro-growth measures ahead of Trump’s return to the White House. Citigroup strategists expect a 10% rally in the MSCI All-Country World Index this year, with returns “more evenly spread” between regions.      

 

EQUITIES:  

US equity futures fluctuated ahead of US payrolls data. The closely watched nonfarm payrolls report is expected to show a slowdown in hiring in an otherwise healthy labor market. Median
estimates for the figures forecast that 165,000 jobs were added to the economy in December. The unemployment rate is forecast to hold steady at 4.2%. Delta Air climbed premarket after earnings beat. The airline said it expects strong demand to continue this
year. Nvidia criticized the Biden administration’s looming chip export curbs, saying they’re an attempt to undercut Donald Trump’s presidency by imposing last-minute rules. Tesla launched its refreshed Model Y SUV in China ahead of a release in the US.   

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

In pre-market trading, Allstate (ALL) falls 5%, down with insurance stocks, as analyst estimates of potential damages tied to the LA wild fires soar. Travelers (TRV)
-4%, AIG (AIG) -3%. Constellation Energy (CEG) climbs 6% after agreeing to acquire closely held Calpine Corp. for $16.4 billion to add scores of power generation assets across the US as the nation’s electricity demand is forecast to surge. Delta Air Lines
(DAL) rises 6% after beating Wall Street’s profit estimates for the final months of 2024. Walgreens Boots Alliance (WBA) rises 17% after posting quarterly results that surpassed Wall Street’s expectations, easing pressure on the pharmacy chain as it mulls
strategic options, including a sale. IGM Biosciences (IGMS) slumps 67% after the biotech halted the development of its Imvotamab and IGM-2644 treatments for autoimmune diseases. Joby Aviation (JOBY) slips 6% and Archer Aviation (ACHR) falls 3% as JPMorgan
cut its rating on the pair. Microvast (MVST) rises 34% after announcing a milestone in the development of its true all-solid-state battery.

European gauges are mixed. The Stoxx 600 is recouping early losses, with utilities and insurance stocks dropping the most while energy and auto stocks outperform. The
DAX is near highs on the day while the FTSE 100 lingers near the day’s lows. FTSE 250 is set for the worst weekly decline since August 2023, as concerns about the fiscal deficit and higher inflation have hit the country’s markets this week. Among individual
stocks, Ubisoft Entertainment SA dropped, after the French video-game company announced another delay in its popular Assassin’s Creed franchise. The outlook for domestic stocks in the UK is more clouded now, according to Barclays strategists. Stoxx 600 -0.1%,
DAX +0.35%, CAC +0.2%, FTSE 100 -0.4%. Autos +1.8%, Energy +1.1%, Basic Resources +0.4%, Technology +0.2%. Utilities -1.3%, Insurance -1%, Retail -0.9%. 

Shares in Asia were broadly lower as cautious sentiment took hold with traders mulling the prospect of slower interest rate cuts by the Federal Reserve. The MSCI Asia
Pacific Index dropped 0.9%, with Fast Retailing among the biggest drags after results from the Japanese fashion retailer raised concern over a slowdown in its China business. Benchmarks in China and Singapore led declines in the region. The MSCI China Index
fell more than 1%, extending its decline from an October high to around 20%. South Korean nuclear energy-related stocks gain after the nation sealed an agreement with the US on nuclear energy cooperation. Singapore -1.6%, CSI 300 -1.3%, Vietnam -1.2%, Nikkei
225 -1%, Hang Seng Index -0.9%, ASX 200 -0.4%, Sensex -0.3%, Taiwan -0.3%, Kospi -0.2%. Indonesia +0.3%. 

FIXED INCOME: 
 

Treasury yields rose further amid a dialing back of bets on the Fed’s monetary easing this year. Several Federal Reserve officials confirmed Thursday that the US
central bank will likely hold interest rates at current levels for an extended period, only cutting again when inflation meaningfully cools. The week’s broad pullback in European government bonds persisted, with the yield on 10-year gilts remaining stuck near
the highest level since 2008. US yields remain inside weekly ranges ahead of US December jobs report.  2s10s spread is ~flat after reaching its widest level since 2022 this week; 10-year is little changed around 4.690%.

 

 

METALS: 

Gold is higher for a fourth day as traders waited for the release of US payroll figures that’ll help to shape the outlook for Federal Reserve policy this year. The
employment report for December is expected to show moderating yet still-healthy job growth, which economists expect to carry on in 2025. Fed officials have signaled they’ll likely hold rates at current levels for an extended period, only cutting again when
inflation meaningfully cools.  Spot gold +0.4%, Silver +0.6%, Copper +0.5%.

 

 

ENERGY:   

 

Oil prices rose sharply to a three-month high after another contraction in US crude stockpiles, driven by frigid winter weather. Crude is on track for a third straight
week of gains as traders focused on potential supply disruptions from more sanctions on Russia and Iran. Texas refineries are bracing for an onslaught of cold, snow and freezing rain as the US South’s first major winter storm sweeps in. January is forecasted
be the coldest in 11 years.  WTI +3.2%, Brent +3.2%, US Nat Gas +4.2%, RBOB +2.8%. 

 

 

CURRENCIES: 

Currency markets are muted ahead of the US employment data. The yen reversed losses after a Bloomberg report that Bank of Japan officials are likely to discuss raising
their inflation outlook at their policy meeting later this month. Traders are on alert for a rising risk of Japan intervening to support the yen. Sterling is slightly higher versus the dollar after a three day decline, after British debt yields soared to 16-year
highs. China’s yuan is hovering near the weaker end of its trading band and the benchmark bond yield is just a few basis points away from a record low.  US$ Index -0.05%, GBPUSD +0.1%, EURUSD +0.05%, USDJPY -0.15%, AUDUSD -0.1%, NZDUSD -0.25%, USDCHF +0.15%.

 

 

 

Spot Bitcoin +3%, Spot Ethereum +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
    • Abercrombie & Fitch (ANF) Raised to Buy at UBS
    • Agilon Health (AGL) Raised to Neutral at Citi; PT $2.25
    • Apogee Enterprises (APOG) Raised to Buy at Sidoti; PT $70
    • Arthur J Gallagher (AJG) Raised to Buy at TD Cowen; PT $377
      • Raised to Market Perform at KBW; PT $286
    • Atlassian (TEAM) Raised to Outperform at BMO; PT $292
    • Bath & Body Works (BBWI) Raised to Overweight at Wells Fargo; PT $48
    • BILL Holdings Inc (BILL) Raised to Buy at Goldman; PT $104
    • Boot Barn (BOOT) Raised to Buy at UBS
    • Burlington Stores (BURL) Raised to Buy at UBS
    • C.H. Robinson (CHRW) Raised to Outperform at Raymond James; PT $123
    • Canadian National (CNR CN) Raised to Buy at Jefferies; PT C$172.85
    • Capri Holdings (CPRI) Raised to Overweight at Wells Fargo; PT $28
      • Raised to Buy at Citi; PT $29
    • Collegium (COLL) Raised to Buy at Needham; PT $46
    • CSX (CSX) Raised to Buy at Jefferies; PT $37
    • Everest Group Ltd (EG) Raised to Outperform at BMO; PT $453
    • Extra Space (EXR) Raised to Sector Perform at Scotiabank; PT $167
    • Ferguson (FERG) Raised to Overweight at Morgan Stanley; PT $201.86
    • FTAI Aviation (FTAI) Raised to Outperform at Wolfe; PT $190
    • Gap (GAP) Raised to Neutral at UBS
    • Gartner (IT) Raised to Overweight at Barclays; PT $600
    • Gildan Activewear (GIL CN) Raised to Buy at UBS
    • Gilead (GILD) Raised to Overweight at Morgan Stanley; PT $113
    • Helmerich & Payne (HP) Raised to Buy at Citi; PT $40
    • I-80 Gold (IAU CN) Raised to Outperform at National Bank; PT C$1.75
    • Interpublic (IPG) Raised to Outperform at BNPP Exane; PT $38
    • KB Home (KBH) Raised to Sector Perform at RBC; PT $67
    • Lennar (LEN) Raised to Sector Perform at RBC; PT $130
    • Lululemon (LULU) Raised to Buy at Needham; PT $475
    • Lundin Gold (LUG CN) Raised to Buy at Cormark Securities; PT C$38
    • Masco (MAS) Raised to Outperform at Oppenheimer; PT $89
    • McDonald’s (MCD) Raised to Buy at Citi; PT $334
    • Mohawk Industries (MHK) Raised to Overweight at JPMorgan; PT $161
    • Nike (NKE) Raised to Overweight at Piper Sandler; PT $90
    • Nordstrom (JWN) Raised to Neutral at UBS
    • NXP Semi (NXPI) Raised to Buy at Goldman; PT $257
    • Plains All American (PAA) Raised to Outperform at Wolfe; PT $22
    • Plains GP (PAGP) Raised to Outperform at Wolfe; PT $22
    • Precision BioSciences (DTIL) Raised to Outperform at BMO; PT $34
    • Snowflake (SNOW) Raised to Overweight at Barclays; PT $190
    • South Bow (SOBO CN) Raised to Sector Outperform at Peters & Co; PT C$38
    • Sweetgreen (SG) Raised to Buy at Citi; PT $49
    • Thermo Fisher (TMO) Raised to Outperform at Bernstein; PT $630
    • UnitedHealth (UNH) Raised to Buy at HSBC; PT $595
    • Vir Biotechnology (VIR) Raised to Overweight at Morgan Stanley; PT $20
    • Waters (WAT) Raised to Outperform at Bernstein; PT $430
    • Wyndham Hotels (WH) Raised to Overweight at Wells Fargo; PT $114
    • YPF (YPFD AR) ADRs Raised to Overweight at JPMorgan; PT $59.50
  • Downgrades
    • Accolade (ACCD) Cut to Hold at Stifel; PT $7.03
      • Cut to Market Perform at Raymond James
    • AMD (AMD) Cut to Neutral at Goldman; PT $129
    • Appfolio (APPF) Cut to Sector Weight at KeyBanc
    • Archer Aviation (ACHR) Cut to Neutral at JPMorgan; PT $9
    • Array (ARRY) Cut to Neutral at Susquehanna; PT $7
    • Baytex Energy (BTE CN) Cut to Sector Perform at Peters & Co; PT C$5.50
    • BigCommerce (BIGC) Cut to Underweight at Barclays; PT $7
    • Cemig (CMIG4 BZ) ADRs Cut to Hold at HSBC; PT $2
    • Enterprise Products (EPD) Cut to Peerperform at Wolfe
    • Gerdau (GGBR4 BZ) ADRs Cut to Neutral at Bradesco BBI; PT $3.20
    • Global Payments (GPN) Cut to Neutral at Goldman; PT $122
    • Haleon (HLN LN) ADRs Cut to Equal-Weight at Morgan Stanley; PT $10.20
    • Harmonic (HLIT) Cut to Equal-Weight at Barclays; PT $14
    • Hims & Hers Health (HIMS) Cut to Sell at Citi; PT $25
    • Hookipa Pharma (HOOK) Cut to Neutral at HC Wainwright
    • IGM Biosciences (IGMS) Cut to Neutral at Guggenheim
      • Cut to Underweight at Morgan Stanley; PT $2
      • Cut to Hold at Stifel; PT $2.50
      • Cut to Market Perform at BMO; PT $2
    • Joby Aviation (JOBY) Cut to Underweight at JPMorgan; PT $6
    • Lightspeed Commerce Inc (LSPD CN) Cut to Equal-Weight at Barclays
    • NetEase (NTES) ADRs Cut to Neutral at Arete; PT $96
    • Oceaneering (OII) Cut to Neutral at Citi; PT $30
    • ON Semi (ON) Cut to Hold at Truist Secs; PT $60
    • Paycor HCM (PYCR) Cut to Market Perform at JMP
    • Peyto Exploration (PEY CN) Cut to Sector Perform at Peters & Co
    • Q2 Holdings (QTWO) Cut to Neutral at Baird; PT $99
    • Revvity Inc (RVTY) Cut to Market Perform at Bernstein; PT $130
    • Roku (ROKU) Cut to Sell at MoffettNathanson LLC; PT $55
    • Ross Stores (ROST) Cut to Equal-Weight at Wells Fargo; PT $165
    • Sunnova Energy (NOVA) Cut to Neutral at Susquehanna; PT $4.50
    • Verisk (VRSK) Cut to Equal-Weight at Barclays; PT $310
    • Yum (YUM) Cut to Neutral at Citi; PT $141
  • Initiations
    • Agilon Health (AGL) Rated New Hold at Needham
    • Amentum Holdings (AMTM) Rated New Sector Perform at RBC; PT $24
    • AppLovin (APP) Rated New Buy at Benchmark; PT $375
    • Bank of Nova Scotia (BNS CN) Rated New Buy at Accountability Research
    • BioNTech (BNTX) ADRs Rated New Buy at Truist Secs; PT $172
    • Bright Minds Biosciences (DRUG CN) Rated New Buy at HC Wainwright; PT $85
      • Rated New Overweight at Cantor
    • Cboe (CBOE) Rated New Market Perform at William Blair
    • Check Point Software (CHKP) Rated New Neutral at Cantor; PT $200
    • Cheniere Energy (LNG) Resumed Sector Outperform at Scotiabank; PT $242
    • Chord Energy (CHRD) Rated New Equal-Weight at Morgan Stanley; PT $158
    • Cingulate (CING) Rated New Buy at Roth Capital Partners; PT $12
    • Civitas Resources Inc (CIVI) Rated New Overweight at Morgan Stanley
    • CNX Resources (CNX) Rated New Underweight at Morgan Stanley; PT $29
    • Comstock Resources (CRK) Rated New Equal-Weight at Morgan Stanley
    • Enterprise Products (EPD) Resumed Sector Perform at Scotiabank; PT $33
    • Eton Pharmaceuticals (ETON) Reinstated Buy at B Riley; PT $21
    • Evolent (EVH) Rated New Buy at Needham; PT $15
    • ImmunityBio Inc (IBRX) Rated New Buy at BTIG; PT $6
    • Instacart (CART) Rated New Equal-Weight at Wells Fargo; PT $47
    • Janux Therapeutics (JANX) Rated New Outperform at LifeSci Capital
    • Kinder Morgan (KMI) Resumed Sector Perform at Scotiabank; PT $26
    • Kinetik (KNTK) Resumed Sector Outperform at Scotiabank; PT $64
    • Korro Bio, Inc. (KRRO) Rated New Outperform at Oppenheimer; PT $155
    • Lennar (LEN) Rated New Hold at Spin-Off Research; PT $131
    • Lumen Technologies (LUMN) Rated New Outperform at Haitong Intl
    • Matador Resources (MTDR) Rated New Equal-Weight at Morgan Stanley
    • Meta Platforms (META) Rated New Buy at China Merchants; PT $721
    • Monopar (MNPR) Rated New Overweight at Piper Sandler; PT $72
    • News Corp (NWSA) Rated New Buy at Citi; PT $36
    • Oneok (OKE) Resumed Sector Outperform at Scotiabank; PT $109
    • Permian Resources (PR) Rated New Overweight at Morgan Stanley; PT $19
    • Plains All American (PAA) Resumed Sector Outperform at Scotiabank
    • Privia Health (PRVA) Rated New Buy at Needham; PT $25
    • ProQR Therapeutics (PRQR) Rated New Outperform at Oppenheimer; PT $15
    • ResMed (RMD) Rated New Neutral at Piper Sandler; PT $252
    • SentinelOne (S) Rated New Overweight at Cantor; PT $30
    • Targa Resources (TRGP) Resumed Sector Outperform at Scotiabank; PT $218
    • Tourmaline Oil (TOU CN) Rated New Equal-Weight at Morgan Stanley; PT C$81
    • Travere Therapeutics Inc (TVTX) Rated New Overweight at Cantor
    • Varonis Systems (VRNS) Rated New Overweight at Cantor; PT $60
    • Verona Pharma (VRP LN) ADRs Rated New Buy at Roth Capital Partners
    • Voyager Therapeutics (VYGR) Rated New Overweight at Cantor
    • Williams Cos (WMB) Resumed Sector Perform at Scotiabank; PT $51

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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