Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:15ET ADP Employment Change; 8:30ET Trade Balance; 9:00ET Fed’s Barkin speaks; 9:45ET
S&P Global US Services PMI; 10:00ET ISM Services; 2:30ET Fed’s Goolsbee speaks; 3:00ET Fed’s Bowman speaks

US DEC. TRADE DEFICIT $98.4B; EST. -$96.8B (2^nd biggest ever)

Highlights and News:  

• Kremlin says Russia-US contacts on Ukraine more active now
• Trump says US could take over Gaza, send refugees elsewhere
• China Weighs Probe Into Apple’s App Store Fees, Practices
  
• Planned ‘Resistance’ protests opposing Trump’s early actions is planned in all 50 states today
• Trump Says He Wants New Nuclear Deal Allowing Iran to ‘Prosper’
  
• USPS TO ‘CONTINUE ACCEPTING’ CHINA, HONG KONG PACKAGES FEB. 5

Global shares slipped in cautious trading after disappointing earnings from Alphabet and AMD weighed, while delays to tariffs eased some concerns on global trade
for now. China’s antitrust watchdog is preparing for a possible investigation into Apple’s app developer fees and policies, amidst a wider strategy by Beijing that could escalate tensions in the ongoing trade conflict with the US. China’s services activity
expanded at a slower pace in January, but business sentiment improved. The Caixin survey showed that new business growth eased to a four-month low, while employment fell to the weakest since April 2024. Euro zone business activity returned to growth at the
start of the year after two months of contraction, HCOB’s final composite PMI showed. Meanwhile, investors shrugged off comments from President Trump that the US would like to take over the war-ravaged Gaza Strip and develop it economically. The Israeli PM
described Trump’s plan as “a different idea” but one “worth paying attention to.”

EQUITIES:  

US equity futures are lower following disappointing updates from Alphabet and Advanced Micro Devices plus reports that China’s antitrust watchdog is laying the groundwork for a potential
probe into Apple. Although the initial exchanges in the current US-China trade dispute indicate that Xi Jinping is adopting a more cautious strategy compared to Donald Trump’s first term, tariff risks remain at the forefront. Alphabet earnings missed analysts’
expectations after growth in its cloud business slowed, raising concern from investors about the billions the company is spending on artificial intelligence. Traders will also look to the US ISM services data later today for more clues on the Federal Reserve’s
rate path. Activity in the services sector likely grew more slowly in January amid winter storms across much of the country and wildfires on the West Coast.

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.7%, Russell 2000 +0.05%, DJI -0.2%.

In pre-market trading, Advanced Micro Devices (AMD) falls 9% after giving a disappointing outlook for its data center business, an area where it’s struggling to catch
up with AI computing leader Nvidia Corp. Alphabet (GOOGL) declines 7% after slower growth in its cloud business contributed to lower-than-expected revenue in the fourth quarter. Broadcom (AVGO) gains 3% after a higher-than-expected capital spending forecast
from customer Alphabet. Chipotle Mexican Grill (CMG) drops 4% after sales rose less than expected. Cirrus Logic (CRUS) rises 8% after the company forecast a 4Q revenue range with a midpoint above what analysts expected. Electronic Arts (EA) gains 2% after
the video-game maker reported third-quarter earnings and provided further context on the underperformance of EA Sports FC. FMC (FMC) slumps 22% after the agricultural sciences company’s 2025 outlook fell short of expectations. Harley-Davidson (HOG) slips 2%
after 4Q revenue disappointed. Johnson Controls (JCI) rises 8% after boosting its adjusted earnings per share forecast for the full year. Lumen Technologies (LUMN) rises 10% after the telecommunications firm reported 4Q profit and revenue that beat estimates.
Match Group (MTCH) falls 8% after the dating service provider forecast revenue for the first quarter below the average analyst estimate and announced a change in CEO. Mattel (MAT) surges 14% after the toymaker reported better-than-expected 4Q results and FY25
EPS guidance above analyst estimates. Mercury Systems (MRCY) jumps 19% after the company reported adjusted earnings per share for the second quarter that beat. Mondelez (MDLZ) drops 4% after the Oreo cookies-maker issued annual forecasts for organic revenue
growth and profit that trailed expectations. Oscar Health Inc. (OSCR) sinks 11% after the insurance firm provided a disappointing 2025 revenue forecast and posted a wider-than-expected loss. PDD Holdings (PDD) ADRs drop 6% after the US Postal Service said
it’s temporarily suspending inbound parcels from China and Hong Kong. Uber Technologies (UBER) drops 7% after reporting weaker-than-expected fourth-quarter earnings. Walt Disney Co. (DIS) rises about 1% after reporting fiscal first-quarter results that topped
analysts’ estimates.

European gauges are little changed after reversing early losses as losses in auto shares are offset by gains in health care, banks and energy after solid corporate
results from Novo Nordisk, Banco Santander and TotalEnergies. Activity was dominated by a heavy day for earnings, where shares in Novo Nordisk, the most valuable company in the region, rose 4% after beating fourth-quarter expectations. Spanish lender Banco
Santander SA surged after reporting record profit and announcing at €10 billion buyback. Drugmaker GSK jumped after boosting its sales forecast. Renault SA declined after a report that Nissan Motor will withdraw from its deal with Honda Motor Co. to integrate
their businesses. Stoxx 600 +0.1%, DAX -0.05%, CAC -0.2%, FTSE 100 +0.1%. Real Estate +1.4%, Healthcare +1.2%, Media +0.8%, Telecom +0.7%, Banks +0.4%, Energy +0.35%. Autos -1.5%, Technology -0.4%. 

Shares in Asia were mostly higher although Chinese stocks declined due to heightened trade tensions Chinese equities drifted lower after returning from a week-long
holiday in a cautious mood as tariffs keep investors on edge.  Hang Seng Tech index briefly fell more than 2.5% as e-commerce stocks tumbled after the US Postal Service said it was temporarily suspending inbound international packages from China and Hong Kong.
The MSCI Asia Pacific Index rose 0.7%, with tech-heavy markets such as Taiwan and South Korea helping to lead gains in the region. Japanese stocks reversed midday losses, as Toyota Motor gained after raising its annual operating profit outlook. Honda Motor
surged and Nissan Motor slumped after the Nikkei reported that the two competitors failed to reach a consensus on a combination. Philippines +3.1%, Taiwan +1.6%, Kospi +1.1%, ASX 200 +0.5%, Vietnam +0.4%, Topix +0.3%. Singapore -0.2%, Sensex -0.4%, CSI 300
-0.6%, Indonesia -0.7%, Hang Seng Index -0.9%, Thailand -1.1%.

FIXED INCOME: 
 

Treasuries rise, with US 10-year yields falling ~5 bps to 4.45%. The long-end leads gains in Treasuries, flattening 2s10s spread by ~3.5bp. The Fed’s Barkin said
he sees no sign of the US economy overheating and sees current rates as still moderately restrictive. IG dollar new-issue slate includes Republic of Turkiye 7Y; eight borrowers priced a combined $14.4b on Tuesday. Issuers offered investors about 6bps in new
issue concessions on deals that were more than four and a half times bought. 

METALS: 

Gold hit a fresh all-time high as investors sought safe havens, aided in part by the pullback in the dollar and Treasury yields. There are indications of increased
demand for gold as major dealers seek to shift metal to the US before any tariffs are imposed. One month so-called lease rates in London have jumped to about 4.7%, far above previous levels of close to zero. The rate reflects the return that holders of bullion
in London’s vaults can get by loaning their metal out to other buyers on a short-term basis. Spot gold +0.9%, Silver +0.5%, Copper +0.2%.

ENERGY:   

Oil prices were weighed down by China’s tariffs on imports of US oil, which countered a potential boost from reports that Trump had restored his “maximum pressure”
campaign on Iran in a bid to drive Iranian oil exports to zero. Iran’s oil minister said imposing unilateral sanctions on crude producers would destabilize energy markets. Trump said this morning that he’s willing to immediately start working on a new nuclear
deal with Iran that allows the country to “peacefully grow and prosper.” “Reports that the United States, working in conjunction with Israel, is going to blow Iran into smithereens, ARE GREATLY EXAGGERATED,” Trump said in a post on Truth Social.  US distillate
stockpiles tumbled by 7 million barrels last week, the API reported. That would be the biggest drop in almost four years if confirmed by the EIA today. Crude inventories and gasoline supplies rose. WTI -1.3%, Brent -1.3%, US Nat Gas -1.3%, RBOB -1.4%. 

CURRENCIES: 

In currency markets, the dollar took a dive against the yen, which rallied sharply against a range of currencies following the release of Japanese wage data that
increased expectations of another rate hike. Japanese nominal wages rose 4.8% y-o-y in December, the largest jump since 1997, driven by a jump in bonuses. The yen also got a lift after Economic Revitalization Minister Ryosei Akazawa said the nation is in an
inflationary situation. Sterling rose with focus on positioning ahead of the Bank of England’s interest-rate decision. US$ Index -0.4%, GBPUSD +0.45%, EURUSD +0.4%, USDJPY -1%, AUDUSD +0.45%, NZDUSD +0.6%, USDCHF -0.4%, USDCAD -0.3%, USDMXN +0.5%.

Spot Bitcoin +1.6%, Spot Ethereum +5.5%.

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
• Cardinal Health (CAH) Raised to Buy at Jefferies; PT $150
• Chipotle (CMG) Raised to Strong Buy at CFRA; PT $73
• Hayward (HAYW) Raised to Buy at Stifel; PT $16.50
• Janus Henderson (JHG) Raised to Overweight at JPMorgan; PT $53
• Mattel (MAT) Raised to Buy at Jefferies; PT $28
• Mercury Systems (MRCY) Raised to Outperform at Baird; PT $58
• Molson Coors (TAP) Raised to Neutral at Citi; PT $57
• NXP Semi (NXPI) Raised to Neutral at Citi; PT $210
• Regeneron (REGN) Raised to Outperform at Leerink; PT $834
• Silicon Labs (SLAB) Raised to Buy at Benchmark; PT $160
• Simon Property (SPG) Raised to Overweight at Piper Sandler; PT $205
• SSR Mining (SSRM CN) Raised to Sector Perform at RBC; PT C$11.47
• Tempur Sealy (TPX) Raised to Outperform at William Blair
• Wheaton Precious Metals (WPM CN) Raised to Buy at Stifel Canada; PT C$107
• Downgrades
• Afya (AFYA) Cut to Underperform at Bradesco BBI; PT $14
• Alphabet (GOOGL) Cut to Hold at Punto Casa de Bolsa; PT $203.84
• American Eagle (AEO) Cut to Equal-Weight at Barclays; PT $17
• AspenTech (AZPN) Cut to Hold at Loop Capital; PT $265
• Everest Group Ltd (EG) Cut to Equal-Weight at Morgan Stanley; PT $340
• Federated Hermes (FHI) Cut to Underweight at JPMorgan; PT $41
• Ferrari (RACE) Cut to Equal-Weight at Barclays; PT $503.62
• FMC Corp (FMC) Cut to Sector Perform at RBC; PT $47
• Gibson Energy (GEI CN) Cut to Neutral at JPMorgan; PT C$26
• H World Group Ltd (HTHT) ADRs Cut to Hold at HSBC; PT $32.40
• Hilton Worldwide (HLT) Cut to Neutral at Mizuho Securities; PT $263
• MGIC (MTG) Cut to Neutral at Compass Point; PT $27
• Snap (SNAP) Cut to Equal-Weight at Wells Fargo; PT $11
• Cut to Market Perform at JMP; PT $16
• STMicro (STMPA FP) ADRs Cut to Market Perform at Bernstein; PT $26
• Turnstone Biologics (TSBX) Cut to Neutral at Piper Sandler; PT 40 cents
• Warby Parker (WRBY) Cut to Sell at Citi; PT $23
• Initiations
• Aimia (AIM CN) Resumed Buy at TD Cowen; PT C$4
• AtkinsRealis (ATRL CN) Rated New Buy at Stifel Canada; PT C$98
• Carnival (CCL) Rated New Hold at Loop Capital; PT $25
• CoStar (CSGP) Reinstated Underweight at Wells Fargo; PT $65
• CT REIT (CRT-U CN) Rated New Market Perform at Raymond James; PT C$16.25
• Extendicare (EXE CN) Rated New Buy at Canaccord; PT C$13
• Intuitive Machines (LUNR) Rated New Underperform at BofA; PT $16
• Lundin Mining (LUN CN) Resumed Hold at TD Cowen; PT C$13
• Morguard NA REIT (MRG-U CN) Rated New Buy at Desjardins; PT C$21.50
• Norwegian Cruise (NCLH) Rated New Hold at Loop Capital; PT $26
• Opera (OPRA) ADRs Rated New Overweight at Piper Sandler; PT $25
• Palvella Therapeutics In (PVLA) Rated New Buy at TD Cowen; PT $44
• Power Nickel Inc (PNPN CN) Rated New Buy at Roth Capital Partners
• Robinhood (HOOD) Rated New Market Perform at Raymond James
• Royal Caribbean (RCL) Rated New Hold at Loop Capital; PT $250
• Viking Holdings (VIK) Rated New Buy at Loop Capital; PT $55

Data sources: Bloomberg, Reuters, CQG

David Wienke