Daily Game Plan

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

DATA/HEADLINES   8:30ET PPI Final Demand; 10:15ET Fed’s Waller speaks; 12:15ET Fed’s Bostic speaks; 2:00ET FOMC
Minutes; 4:30ET Fed’s Collins speaks

US SEPT. PRODUCER PRICES RISE 2.2% Y/Y; EST. 1.6%; US SEPT. PRODUCER PRICES RISE 0.5% M/M; EST. 0.3%

TODAY’S HIGHLIGHTS:  

• Israeli police seized crypto accounts used by Hamas to collect donations on social media
• Senior pro-Iran leaders in Iraq and Yemen threatened to target US interests if Washington intervenes to support
  Israel in its conflict with Hamas
• Birkenstock begins trading today  
• US mortgage rates climb to fresh multi-decade high of 7.67%
• Vehicle sales rose 5% in September from a year earlier, their most since May

Global stocks edged higher as sentiment improved on Chinese stimulus hopes and a drop in bond yields. While uncertainty caused by the Israel-Hamas conflict is keeping
investors on edge, recent dovish comments from some Fed officials have offered respite for global markets. Global bond yields have fallen along with the dollar this week, boosting the appeal of emerging-market and other risk assets. Hezbollah said it fired
missiles at an Israeli military post near the Lebanese border, prompting retaliatory strikes by the IDF. Benjamin Netanyahu and opposition leader Benny Gantz are meeting to discuss forming an emergency government. The first US ammunition supplies arrived as
Secretary of State Antony Blinken travels to Israel today. Meanwhile, Janet Yellen said the Biden administration hasn’t ruled out new sanctions against Iran.      

EQUITIES: 

US equity futures are higher as investors await the latest FOMC Minutes that may show disinflation progress boosted optimism about a soft landing. Several Fed officials in recent days
have suggested that the central bank doesn’t need to raise borrowing costs any further. Exxon Mobil agreed to buy Pioneer Natural Resources for $59.5B in the world’s largest corporate takeover this year.  Exxon will pay $253 per share in an all-stock deal,
and if finalized it will make Exxon far and away the biggest player in the Permian Basin. Birkenstock and its PE owner priced its IPO at $46 a share, toward the middle of a marketed range. The stock begins trading today. Meanwhile, House Republicans head into
a speaker election today, with Steve Scalise and Jim Jordan the top contenders.    

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

In pre-market trading, Cava Group (CAVA) gained 4.5% after Morgan Stanley upgraded the restaurant chain to overweight from equal-weight. Shares in dialysis providers DaVita (DVA) and
Baxter International (BAX) slide after Novo Nordisk said a kidney-outcomes trial of its blockbuster Ozempic medication is being stopped early. CSX (CSX) +2.4%, Pioneer Natural (PXD) +2.4%, Stellantis (STLA) +2.2%, Eli Lilly (LLY) +2.1%. APA Corp (APA) +5.4%,
Coherent Corp (COHR) +5.0%, Anglogold Ashanti (AU) +4.6%. Athena Consumer Acquisition (ACAQ) +33.3%, Cadiz (CDZI) +12.3%, Tritium DCFC (DCFC) +12.1%, Estrella Immunopharma (ESLA) +8.2%, SpringWorks (SWTX) +7.3%, Outset Medical (OM) -9.2%, Hub Cyber Security
(HUBC) -13.3%, E2open (ETWO) -15.3%, Hyliion (HYLN) -31.9%, Silk Road Medical (SILK) -36.5%.

European stocks struggled for momentum as luxury shares slumped. The Stoxx 600 is slightly higher after it closed up 2% on Tuesday, its biggest gain since November 2022. The ECB’s Klaas
Knot said inflation shocks are now in retreat. Novo Nordisk A/S contributed the most to the index gain and had the largest move, increasing 4.3%. Stoxx 600 +0.4%, DAX +0.3%, CAC -0.2%, FTSE 100 +0.2%. Food & Bev +1.1%, Healthcare +1.1%, Utilities +1%. Retail
-1.9%.        

A Bloomberg report on China preparing stimulus to help its economy supported the mood in Asian equity markets. Asian stocks rose for a fifth straight day with the MSCI Asia Pacific Index
up 0.8%. Samsung Electronics was among the biggest gainers as its better-than-feared results fueled expectations of a chip recovery. South Korea’s Kospi gained 2% in its best day since January, while the Hang Seng Index hit a two week high. Chinese gauges
made small gains after a report that Beijing is planning issuance of additional sovereign debt for spending on infrastructure to shore up economic growth.  Shares of smartphone parts suppliers rose after Nikkei reported that Huawei aims to double smartphone
shipments next year. Healthcare stocks led gains in China, with analysts citing an improvement in the industry environment. Hang Seng Tech +2%, Kospi +2%, Thailand +1.5%, Hang Seng Index +1.3%, Taiwan +0.9%, ASX 200 +0.7%, Vietnam +0.6%, Sensex +0.6%, CSI
300 +0.3%. Nikkei 225 +0.6%, Topix -0.2%. 

FIXED INCOME: 
 

Treasuries jumped as rising tensions in the Middle East drove investors toward havens. US 10 year yield is down ~10bps at 4.55%. US yields are richer by 3bp-11bp
across the curve in bull-flattening move that’s narrowed 2s10s, 5s30s spreads by ~8bp and ~5bp on the day. The Fed’s Mary Daly reiterated a recent rise in bond yields may mean the Fed “doesn’t have to do as much,” signaling tighter financial conditions may
substitute for a rate hike. Michelle Bowman disagreed, saying rates may need to rise further and stay higher for longer. Later today, September Fed minutes may show disinflation progress boosted optimism about a soft landing. The US session also includes PPI
data, 10-year note auction and several Fed speakers.    

METALS: 
   

Gold extended its rally as Federal Reserve policymakers continue favoring steady interest rates at the 5.25 to 5.50% range through year-end. Yields on US government bonds extended some
of their biggest one-day losses all year as swap markets scaled back rate-hike bets. Gold has been revitalized this week as Hamas’s attack on Israel inflamed geopolitical tensions and spurred haven buying.  Gold +0.6%, silver +1%. 

ENERGY:  

Oil prices slipped as fears of disruption to supplies due to conflict in the Middle East receded for the time being. Saudi Arabia said on Tuesday that it is working
with regional and international partners to prevent the escalation of the situation in Gaza and neighboring areas, and reaffirmed it supports efforts to stabilize oil markets. The US and Venezuela, meanwhile, are close to reaching a deal that would bring limited
sanctions relief in exchange for steps to ensure fair elections. China has saved nearly $10 billion this year through record purchases of oil from countries under Western sanctions, according to Reuters’ calculations. European gas prices, which had jumped
on news of the Middle East violence, have surged further on concern a gas pipe in Finland was sabotaged. The benchmark Dutch gas contract touched a seven-month high on Tuesday.  WTI -0.9%, Brent -0.8%, US Nat Gas -1%, RBOB is flat.

CURRENCIES:   

In currency markets, the dollar fluctuated, erasing losses after Israel said an anti-tank missile fired from Lebanon hit one of its military posts.  Traders await
producer and consumer price data, as well as Federal Reserve meeting minutes for clues on the outlook for interest rates. EUR/USD was stabile as the ECB’s monthly survey showed that consumer expectations for euro-area inflation increased marginally in August,
up to 3.5% from 3.4% Elsewhere, the Aussie dollar weakened; RBA’s assistant governor for financial markets Chris Kent said some further policy tightening may be required. US$ Index flat, GBPUSD +0.1%, USDJPY +0.1%, EURUSD -0.05, AUDUSD -0.25%, NZDUSD -0.4%,
USDCHF -0.2%.      

Bitcoin -0.8%, Ethereum -0.8%.    

TECHNICAL LEVELS: 

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
• (AMGN) Amgen Raised to Outperform at Leerink; PT $318
• (BALL) Ball Raised to Overweight at Barclays; PT $59
• (CAVA) Cava Group Raised to Overweight at Morgan Stanley; PT $41
• (COHR) Coherent Corp Raised to Buy at B Riley; PT $51
• (CSX) CSX Raised to Overweight at JPMorgan; PT $40
• (IREN) Iris Energy Raised to Overweight at JPMorgan; PT $6.50
• (OI) O-I Glass Raised to Equal-Weight at Barclays; PT $18
• (PPG) PPG Industries Raised to Overweight at Barclays; PT $160
• (SHLS) Shoals Raised to Buy at Goldman; PT $28
• (TTWO) Take-Two Raised to Outperform at Raymond James; PT $170
• Downgrades
• (AFG) American Financial Cut to Hold at CFRA; PT $117
• (ANET) Arista Networks Cut to Neutral at Piper Sandler; PT $190
• (CBOE) Cboe Cut to Hold at Deutsche Bank; PT $168
• (CNE CN) Canacol Energy Cut to Neutral at Banco BTG Pactual; PT C$16.50
• (ETNB) 89bio Cut to Perform at Oppenheimer
• (FLT) FleetCor Cut to Neutral at Baird; PT $302
• (HUBS) HubSpot Cut to Outperform at Raymond James
• (MS) Morgan Stanley Cut to Neutral at UBS; PT $84
• (OLN) Olin Cut to Equal-Weight at Barclays; PT $52
• (OMCL) Omnicell Cut to Sector Weight at KeyBanc
• (OPS CN) Opsens Cut to Hold at Paradigm Capital; PT C$2.90
• (PAGS) PagSeguro Cut to Market Perform at Itau BBA; PT $10
• (PDD) PDD ADRs Cut to Add at Huachuang; PT $124
• (PTLO) Portillo’s Cut to Equal-Weight at Morgan Stanley; PT $19
• (RXO) Rxo Cut to Underweight at JPMorgan; PT $16
• (SAR) Saratoga Investment Cut to Market Perform at Hovde Group; PT $27
• (SILK) Silk Road Medical Cut to Neutral at B Riley; PT $14
• (SILK) Cut to Sell at Citi; PT $8
• (SILK) Cut to Hold at Stifel; PT $12
• (SILK) Cut to Hold at Nephron Research; PT $10
• (STNE) StoneCo Cut to Underperform at Itau BBA; PT $9
• (TXN) Texas Instruments Cut to Market Perform at Oppenheimer
• Initiations
• (AR) Antero Resources Rated New Market Perform at Bernstein
• (BA) Boeing Rated New Buy at UBS; PT $275
• (BBD/B CN) Bombardier Rated New Sell at UBS; PT C$39
• (CAVA) Cava Group Rated New Neutral at Wedbush; PT $33
• (CIFR) Cipher Mining Rated New Neutral at JPMorgan
• (CLBK) Columbia Finl Rated New Buy at Janney Montgomery; PT $18
• (CLSK) CleanSpark Rated New Overweight at JPMorgan; PT $5.50
• (EQT) EQT Corp Rated New Underperform at Bernstein
• (ERAS) Erasca Rated New Buy at HC Wainwright; PT $10
• (GD) General Dynamics Rated New Neutral at UBS; PT $265
• (HOOD) Robinhood Rated New Hold at Needham
• (HWM) Howmet Aerospace Rated New Neutral at UBS; PT $51
• (HXL) Hexcel Rated New Buy at UBS; PT $81
• (JILL) J Jill Inc Rated New Buy at B Riley; PT $35
• (LHX) L3Harris Rated New Neutral at UBS; PT $200
• (LMT) Lockheed Rated New Neutral at UBS; PT $470
• (MARA) Marathon Digital Holding Rated New Underweight at JPMorgan
• (NOC) Northrop Grumman Rated New Buy at UBS; PT $555
• (PANW) Palo Alto Networks Rated New Buy at William O’Neil
• (RIOT) Riot Platforms Inc Rated New Underweight at JPMorgan; PT $6.50
• (RRC) Range Resources Rated New Market Perform at Bernstein
• (RTX) RTX Corp Rated New Neutral at UBS; PT $80
• (RYZB) RayzeBio Rated New Outperform at Evercore ISI
• (SNDX) Syndax Pharmaceuticals Reinstated Buy at Goldman; PT $30
• (SPR) Spirit Aero Rated New Neutral at UBS; PT $17
• (SPT) Sprout Social Rated New Overweight at Stephens; PT $78
• (TDG) TransDigm Rated New Neutral at UBS; PT $950
• (TXT) Textron Rated New Sell at UBS; PT $73
• (VEON) Veon ADRs Reinstated Buy at New Street Research; PT $35
• (VISTAA MM) Vista Energy ADRs Rated New Outperform at Itau BBA; PT $45
• (WSC) WillScot Mobile Mini Rated New Overweight at Wells Fargo; PT $52
• (WWD) Woodward Rated New Buy at UBS; PT $152

Data sources: Bloomberg, Reuters, CQG