Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Nonfarm Productivity, Labor Costs, Jobless Claims; 2:00ET Mexico Rate Decision; 2:30ET
Fed’s Waller speaks; 5:10ET Fed’s Logan speaks

US nonfarm payrolls, unemployment, University of Michigan consumer sentiment, Friday

Highlights and News:  

• Trump: The Gaza Strip will be turned over to the US by Israel at the conclusion of the fighting
• German factory orders surged in December
• Trump administration’s offer to buy out federal employees is said to have attracted over 40,000 sign-ups
• US government vessels will now be able to transit the Panama Canal without charge fees
• Mavs fans take to Dallas City Council after the Luka trade
  

Global shares rose modestly as fears of an escalating trade war between the US and its major trading partners subsided for now. The Bank of England cut interest rates
for a third time today by a quarter-point to 4.5% and downgraded its UK growth forecasts and predicted higher inflation this year, all as expected. The ECB can continue to lower borrowing costs with inflation heading toward the 2% goal, Executive Board member
Piero Cipollone said. Sweden’s core inflation accelerated more than expected last month, dampening expectations in the market about further interest-rate cuts by the Riksbank. German factory orders surged 6.9% in December, exceeding economists’ predictions.
Trump clarified his Gaza plan: The Gaza Strip will be turned over to the US by Israel at the conclusion of the fighting. He said Palestinians would be resettled in the region and no US soldiers would be needed.  

EQUITIES:  

US equity futures fluctuated in cautious trading as disappointing corporate earnings renewed concerns about the valuation of US stocks. Qualcomm, the world’s biggest seller of smartphone
processors, fell more than 5% in premarket trading on investors’ worries that demand for new handsets will stall in the coming year. Ford Motor Co. dropped 6% after warning that profit may fall, while Skyworks Solutions plunged more than 20% after the semiconductor
company said competition in the industry is intensifying. Honeywell is expected to announce a split into three independent companies. More earnings are due today, with Amazon.com due to release results after the close, where the pressure is on for it to deliver
on lofty expectations for cloud computing after lackluster reports from Microsoft and Alphabet.

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq ~flat, Russell 2000 +0.2%, DJI +0.1%.

In pre-market trading, shares of Honeywell International (HON) fell 2% after the multinational conglomerate confirmed a plan to split itself into three independent
companies but also provided a disappointing earnings outlook. Apple (AAPL) edges 0.5% lower after disappointing updates and smartphone commentary from two of its key suppliers, including Qualcomm and Skyworks. Arm Holdings (ARM) slips 3% after the chip-design
company provided a tepid outlook. Bausch + Lomb Corp. (BHC) declines 4% after the eye-health company said it won’t go private at this time. Bristol Myers Squibb Co. (BMY) slips 3% after releasing sales and profit forecasts for 2025 below Wall Street’s expectations.
Coherent (COHR) rises 13% after the semiconductor device company reported results and guidance ahead of expectations. Ford (F) drops 5% after the automaker warned profit could drop due to lower vehicle prices and expenses linked to the launch of new models.
Impinj (PI) sinks 21% after forecasting first quarter revenue that trailed the average analyst estimate. Molina (MOH) falls 5% after the managed-care company earnings missed. Peloton Interactive Inc. (PTON) rises 13% after reporting that cost cuts have bolstered
profit more than anticipated, even as its revenue continues to shrink. Qualcomm (QCOM) falls 4% amid investor concerns that demand for new smartphones will cool in 2025. Skyworks Solutions (SWKS) plunges 30% after the semiconductor device company reported
its first-quarter results and outlook. Symbotic (SYM) slides 17% after the factory automation technology company gave guidance that missed. Tapestry Inc. (TPR) rises 14% after the company raised its guidance again for the year on stronger-than-expected sales
at its biggest brand Coach. Tesla (TSLA) is set to extend losses, falling 1.6%, after sales plummeted 59% last month in Germany. TTM Tech (TTMI) rises 17% after first-quarter forecasts for adjusted EPS and revenue topped analyst estimates. Under Armour (UAA)
climbs 9% after the company raised its annual profit guidance. Yum! Brands (YUM) rises about 2% as sales surpassed expectations, powered by growth at Taco Bell.

European gauges are higher, boosted by optimism that corporate earnings are remaining resilient at a time of rising trade uncertainties with the US. The Stoxx 600 rises
0.8% to an intraday record after another batch of solid corporate updates from the region. Miners are leading gains as iron ore prices climb over 2%. Health care and banks are among the best performing sectors after strong results from AstraZeneca and Societe
Generale. Danish transport giant A. P. Moller-Maersk A/S surged almost 9% after announcing a $2 billion buyback. Volvo Car AB slid 9% as it said it would struggle this year to match its 2024 sales and profits as weak demand and trade tensions weigh on the
auto industry. Stoxx 600 +0.7%, DAX +0.8%, CAC +0.8%, FTSE 100 +1.5%. Basic Resources +3.5%, Construction +1.5%, Banks +1.5%, Food & Bev +1.3%. Media -0.3%. 

Shares in Asia were in the green across most of the region, boosted by technology shares as a sense of calm returned to the market. The MSCI Asia Pacific Index advanced
0.3% to its highest since mid-December. Tech firms were among the top contributors after their customer Nvidia jumped 5% on positive news for its new Blackwell chip. BYD also led the region higher after Cailianshe reported the Chinese carmaker will hold an
event Monday to introduce its smart-driving strategy.  Chinese equities rebounded from Wednesday’s losses even as e-commerce stocks remained weak on concerns over regulations for shipments to the US.  Japanese stocks gained on strong corporate earnings from
brokerage Nomura and chipmaker Renesas. Hang Seng Tech +2.6%, Hang Seng Index +1.4%, CSI 300 +1.3%, ASX 200 +1.2%, Kospi +1.1%, Taiwan +0.7%, Nikkei 225 +0.6%, Vietnam +0.15%. Sensex -0.3%, Philippines -0.6%, Thailand -1.9%, Indonesia -2.1%.

FIXED INCOME: 
 

Treasuries are slightly cheaper across the curve, having pared small declines amid UK bond rally. The 10-year Treasury yield ticked slightly higher to 4.45%, though
it’s still close to a one-month low. The curve is relatively flat. Treasury Secretary Scott Bessent says the Trump administration’s focus is on bringing down 10-year Treasury yields, not the Federal Reserve’s benchmark short-term interest rate. Gilts shook
off early weakness to outperform their US and German peers, most notably at the short-end of the curve ahead of the Bank of England decision. Traders upped bets for further UK rate cuts from the BOE this year after policymakers voted 7-2 to lower borrowing
costs by 25 bps. 

METALS: 

Gold inched lower but keep near record highs. Citigroup expects gold prices to hit a record $3,000 an ounce within three months due to geopolitical tensions and trade
wars. Gold’s bull market looks set to continue under the Trump administration, with trade wars and geopolitical tensions reinforcing trends toward central bank reserve diversification and de-dollarization, Citi analysts say. Copper and base metals edged higher
on expectations of a demand recovery in China after the Lunar New Year holidays. Spot gold -0.15%, Silver -1%, Copper +0.5%.

ENERGY:   

Oil prices ticked higher, seeing a modest bounce off 2025 lows after Saudi Arabia’s state-owned petroleum company significantly raised physical crude prices for Asia.
WTI and Brent ended Wednesday at their lowest since December, sinking on worries over US tariffs on China and data that showed a large jump in US crude inventories last week. China’s state-run refiners are expected to resell US oil cargoes and seek alternative
supplies after Beijing’s response to Washington tariffs. The move is pushing up the cost of some replacement grades. WTI +0.4%, Brent +0.4%, US Nat Gas +0.8%, RBOB +0.6%. 

CURRENCIES: 

In currency markets, the pound is also the weakest of the G-10 currencies after UK construction PMI came in notably below estimates. Sterling extended losses after
the BOE cut rates as expected but two members backed a half-point cut. The dollar edged up as traders weighed receding trade war risks and looked ahead to Friday’s key US payrolls data. The Japanese yen is slightly higher, having pared an earlier advance seen
after BOJ board member Naoki Tamura flagged the need for two or more interest rate hikes by early next year. The People’s Bank of China again set a stronger-than-expected yuan midpoint fixing, though the yuan still weakened after China sought the World Trade
Organization’s intervention to rule on new tariffs imposed by Trump. US$ Index +0.4%, GBPUSD -1.1%, EURUSD -0.4%, USDJPY -0.15%, AUDUSD -0.3%, NZDUSD -0.5%, USDCHF -0.4%, USDCAD +0.2%, USDMXN +0.05%, USDSEK +0.1%.

Spot Bitcoin +1.5%, Spot Ethereum -0.6%.

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
• Array (ARRY) Raised to Neutral at BNPP Exane; PT $9
• Aurora Cannabis (ACB CN) Raised to Outperform at ATB Capital; PT C$11.50
• CarMax (KMX) Raised to Outperform at Evercore ISI; PT $110
• Great-West Lifeco (GWO CN) Raised to Buy at TD Cowen; PT C$53
• Downgrades
• Alphabet (GOOGL) Cut to Hold at DZ Bank; PT $198
• Ares Capital (ARCC) Cut to Market Perform at Raymond James
• Cigna (CI) Cut to Market Perform at Bernstein; PT $323
• Conmed (CNMD) Cut to Neutral at JPMorgan; PT $70
• FormFactor (FORM) Cut to Neutral at B Riley; PT $34
• Frontier (FYBR) Cut to Underperform at Raymond James
• Hologic (HOLX) Cut to Market Perform at Leerink; PT $75
• Kura Oncology (KURA) Cut to Neutral at BTIG
• Match Group (MTCH) Cut to Inline at Evercore ISI
• Skyworks (SWKS) Cut to Neutral at B Riley; PT $65
• Cut to Neutral at Stifel; PT $62
• Cut to Neutral at Mizuho Securities; PT $62
• Symbotic (SYM) Cut to Market Perform at Raymond James
• Triumph Group (TGI) Cut to Equal-Weight at Barclays; PT $26
• Voya Financial (VOYA) Cut to Equal-Weight at Barclays; PT $75
• WaFd Inc (WAFD) Cut to Neutral at DA Davidson; PT $32
• Initiations
• Abacus Life (ABL) Rated New Outperform at Autonomous; PT $12
• Aritzia (ATZ CN) Rated New Buy at Jefferies; PT C$85
• AST SpaceMobile (ASTS) Rated New Overweight at Cantor; PT $30
• Bicara Therapeutics (BCAX) Rated New Outperform at Wedbush; PT $31
• Canadian Tire (CTC/A CN) Reinstated Sector Underperform at Scotiabank
• Cava Group (CAVA) Reinstated Buy at William O’Neil
• Entergy (ETR) Rated New Outperform at Haitong Intl; PT $103.32
• Enterprise Group (E CN) Rated New Outperform at Raymond James
• Evolve Fangma Index ETF (TECH CN) Rated New Sector Outperform at Scotiabank; PT C$129.24
• HA Sustainable Infrastructure (HASI) Rated New Buy at Truist Secs
• Harrow (HROW) Rated New Buy at HC Wainwright; PT $57
• Jamf Holding (JAMF) Reinstated Overweight at JPMorgan; PT $20
• Mersana Therapeutics (MRSN) Rated New Outperform at William Blair
• Portman Ridge Finance Co (PTMN) Rated New Buy at Lucid Capital Markets
• Reddit (RDDT) Rated New Neutral at Seaport Global Securities
• Rekor Systems Inc (REKR) Rated New Buy at Clear Street; PT $3.50
• Uranium Royalty (URC CN) Rated New Outperform at Raymond James; PT C$4.50

Data sources: Bloomberg, Reuters, CQG

David Wienke