Daily Game Plan

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

DATA/HEADLINES   8:30ET CPI*, Avg Hourly Earnings, Weekly Jobless Claims; 10:00et Fed’s Logan speaks; 1:00et Fed’s
Bostic speaks, 30 Year Bond Auction; 2:00ET Budget Statement; 4:00ET Fed’s Collins speaks

US Sep Consumer Prices +0.4%; Consensus +0.3%

TODAY’S HIGHLIGHTS:  

• Diamondbacks made postseason history, becoming the first team ever to hit four home runs in one inning
• Israel carried out a barrage of strikes at the Damascus Airport and the Aleppo Airport in Syria

Global shares rose and the bond market held steady ahead of US inflation data and European Central Bank meeting minutes that will add to the hotly-contested debate
on where interest rates are heading. Markets shrugged off the faster-than-expected US producer price data yesterday, thanks to the less hawkish comments from Fed speakers. Israeli jets hit key targets in Gaza after the nation vowed to wipe Hamas “off the face
of the Earth.” The country’s political leadership hasn’t yet decided on a ground invasion, but the army is preparing for one. Antony Blinken meets with Benjamin Netanyahu today.         

EQUITIES: 

US equity futures trimmed gains after hotter-than-estimated inflation data bolstered concern of another Federal Reserve rate hike this year. Fed officials are taking a more patient approach
now that rates are at or near their peak, Boston Fed President Susan Collins said. The major US stock indexes scored their fourth winning session in a row yesterday as investors shrugged off hotter-than-expected wholesale inflation data.  Ford Motor Co. slipped
overnight after union members called a surprise strike at its largest plant.  The United Auto Workers abruptly closed down Ford’s largest global plant, bringing the production of highly profitable pickup trucks to a halt. This move marks a significant intensification
of the union’s four-week focused strike against the “Detroit Three” automakers.      

Futures ahead of the data: E-Mini S&P +0.1%, Nasdaq +0.05%, Russell 2000 +0.3%, Dow +0.2%.

In pre-market trading, Delta rose over 3% after EPS beat and the airline said it expects strong holiday bookings.  Profit was up 59% from a year earlier, as strong ticket sales helped
Delta shrug off higher labor costs. Ford (F) fell 2% after the UAW expanded its strike against the automaker to a key truck plant in Kentucky.  Walgreens Boots (WGA) dropped 1% after its profit outlook missed. Beyond Meat (BYND) falls 5.5% after Mizuho Securities
cut the recommendation to underperform from neutral. PepGen (PEPG) jumps 13% after the company said the FDA has lifted a full clinical hold and cleared its application to initiate an early-stage study of its treatment for patients with myotonic dystrophy,
a genetic disorder. First Solar (FSLR) shares are up 3.6% after Barclays upgraded the company to overweight from equal-weight. Carvana (CVNA) drops 2% after long-term bull BNP Paribas Exane cut its rating to neutral from outperform.  Target Corp. (TGT) climbs
2% following an upgrade to buy from neutral at BofA. Tempest Therapeutics (TPST) is down 39%, a day after the stock closed up nearly 4,000%.

European stocks rallied as investors awaited key US inflation data. The UK economy expanded by 0.2%, marking a slight recovery from the impact of strikes in July. Europe’s Stoxx 600 Index
advanced to a three-week high with energy shares leading gains. Banks underperformed, with Barclays falling as much as 3.8% after its CEO said stagnant deal activity, easing volatility and peaking interest rates are set to weigh on the sector’s earnings. Publicis
Groupe climbed over 4% after the advertising agency upgraded its full-year organic growth target. EasyJet fell after the airline said it will order an additional 157 Airbus SE A320neo jets, with an option to add 100 more. Luxury stocks were trading slightly
higher a day after slumping on disappointing LVMH sales. Stoxx 600 +0.7%, DAX +0.5%, CAC +0.4%, FTSE 100 +0.7%. Energy +1.7%, Basic Resources +1.1%, Media +1.1%.      

Asian stocks gained as a move by China’s sovereign wealth fund to buy bank shares lifted sentiment. The Hang Seng Index jumped as much as 2.2% after China’s state-owned Central Huijin
Investment Ltd. increased its stake in the nation’s biggest banks for the first time since 2015. The MSCI Asia Pacific Index rose 1.2%, led by consumer discretionary and industrial shares. Equities in Japan and South Korea were among the best performers in
the region. China, however, issued a notice prohibiting domestic brokerages and their overseas units from taking on new mainland clients for offshore trading, which will restrict capital outflows, Reuters reported.  Hang Seng Index +1.9%, Nikkei 225 +1.75%,
Kospi +1.2%, CSI 300 +0.95%, Taiwan +0.9%, Singapore +0.8%, Vietnam +0.05%, ASX 200 +0.05%, Sensex -0.1%.   

FIXED INCOME: 
 

US Treasury yields traded in a tight range overnight on light volume ahead of key inflation data. Treasuries are under modest pressure, with the 10-year yield around
4.56% ahead of the data; it fell by 24 basis points in the previous two sessions. Demand for long-gamma exposure in the front-end eases as large options expiries into the weekend could keep ranges tight. Treasury auction cycle concludes with 30-year reopening
at 1pm, follows 10-year auction Wednesday which tailed by 1.8bp. Yields jump after the CPI report with 10 year yield ~4.6%.            

METALS: 
   

Gold reversed earlier gains as underlying US inflation advanced firmly for a second month in September, underscoring the Federal Reserve’s intent to keep interest rates higher for longer.
Hotter-than-estimated inflation data bolstered concern of another Federal Reserve rate hike this year, even if the central bank decides to pause next month. Spot gold +0.1%, silver +0.1%.   

ENERGY:  

Oil rebounded after OPEC+ leaders Saudi Arabia and Russia reaffirmed their close cooperation to support the crude market. In its monthly report, the International
Energy Agency raised its 2023 demand forecast but lowered its projection for oil demand growth in 2024, suggesting challenging global economic conditions and advancements in energy efficiency as factors likely to reduce consumption. Still, China will drive
consumption to a record, and global inventories will drain sharply this quarter. The US is showing signs of a buildup, with stockpiles surging by about 13 million barrels last week, the API said. The mood remains fragile as Israel builds up forces for an expected
ground assault on Gaza. WTI +1.6%, Brent +1.8%, US Nat Gas -1.7%, RBOB +0.3%.

CURRENCIES:   

In currency markets, the dollar is lower for a seventh day, set for the longest run of losses in over three years. The focus is on today’s US consumer price data,
which economists are forecasting to show a further easing in inflation. Fed meeting minutes on Wednesday showed caution about the economy starting to set in among rate setters. The pound dipped, snapping a six-day rise, after figures showed the UK economy
registered a modest rebound in August as the dominant services sector offset another weak month for manufacturers and construction firms. Russia’s ruble headed for its best day in a month after the government imposed some capital controls on exporters.  US$
Index -0.1%, GBPUSD -0.2%, USDJPY +0.1%, EURUSD -0.1%, AUDUSD -0.4%, NZDUSD -0.6%.         

Bitcoin +0.3%, Ethereum -1%.    

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
• (9697 JP) Capcom ADRs Raised to Buy at Jefferies; PT $21.67
• (CLX) Clorox Raised to Market Perform at Bernstein
• (CNM) Core & Main Raised to Outperform at Wolfe; PT $40
• (CVX) Chevron Raised to Outperform at BNPP Exane; PT $190
• (DT) Dynatrace Raised to Buy at DA Davidson; PT $65
• (FM CN) First Quantum Minerals Raised to Equal-Weight at Morgan Stanley
• (FSLR) First Solar Raised to Overweight at Barclays; PT $224
• (GFI SJ) Gold Fields ADRs Raised to Neutral at JPMorgan; PT $14
• (HR) Healthcare Realty Trust Raised to Overweight at JPMorgan; PT $19
• (KMB) Kimberly-Clark Raised to Market Perform at Bernstein
• (SKT) Tanger Raised to Neutral at JPMorgan; PT $25
• (TGT) Target Raised to Buy at BofA; PT $135
• (WRBY) Warby Parker Raised to Buy at BTIG; PT $17
• (XOM) Exxon Raised to Buy at Truist Secs; PT $131
• Downgrades
• (BOS CN) AirBoss of America Cut to Sector Perform at National Bank
• (BYND) Beyond Meat Cut to Underperform at Mizuho Securities
• (CARR) Carrier Global Cut to Underperform at Wolfe; PT $56
• (CVNA) Carvana Cut to Neutral at BNPP Exane; PT $37
• (ETWO) E2open Cut to Neutral at Redburn; PT $4
• (FL) Foot Locker Cut to Sell at CFRA; PT $15
• (FR) First Industrial Realty Cut to Underweight at KeyBanc; PT $42
• (HYLN) Hyliion Cut to Underweight at Cantor; PT $1
• (JKHY) Jack Henry Cut to Sell at Goldman; PT $140
• (LUN CN) Lundin Mining Cut to Underweight at JPMorgan; PT C$8
• (NTST) Netstreit Cut to Underweight at KeyBanc; PT $13
• (RMD) ResMed Cut to Sector Perform at RBC; PT $202
• (WELL) Welltower Cut to Neutral at JPMorgan; PT $90
• Initiations
• (ALHC) Alignment Healthcare Rated New Equal-Weight at Stephens; PT $9
• (COUR) Coursera Rated New Outperform at BMO; PT $24
• (CPK) Chesapeake Utilities Reinstated Buy at Ladenburg Thalmann
• (ESTC) Elastic Rated New Hold at Needham
• (FI) Fiserv Rated New Neutral at Seaport Global Securities
• (GENI) Genius Sports Rated New Overweight at Cantor; PT $8
• (KRYS) Krystal Biotech Rated New Buy at Citi; PT $160
• (LGN CN) Logan Energy Rated New Buy at Stifel Canada; PT C$1.50
• (PYPD) PolyPid Rated New Buy at HC Wainwright; PT $16
• (PYPL) PayPal Rated New Neutral at Seaport Global Securities
• (REXR) Rexford Industrial Rated New Buy at Truist Secs; PT $56
• (TSVT) 2Seventy Bio Rated New Buy at Citi; PT $13
• (VAC) Marriott Vacations Reinstated Neutral at JPMorgan; PT $105
• (ZGN) Zegna Group Rated New Underperform at BNPP Exane; PT $11.60

Data sources: Bloomberg, Reuters, CQG