Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Chicago Fed Nat Activity Index: 10:30ET Dallas Fed Manf. Activity; 1:00ET 2-Year
Auction

Highlights and News:  

• Ukraine ready to all for all prisoner swap with Russia
• UKRAINE DEPUTY PM: UKRAINE, US IN FINAL STAGES ON MINERALS DEAL
• Trump: APPLE HAS JUST ANNOUNCED A RECORD $500B INVESTMENT IN THE US
• EU’S KALLAS: MEETING US ADMINISTRATION ON WEDNESDAY, THURSDAY
• Microsoft is canceling leases for AI data centers in the US

Global stocks are mixed in mostly cautious trading
as Sino-American tensions flared up again. The Trump administration has taken several actions targeting China, including a memorandum to curb Chinese investment in US tech, energy,
and strategic sectors, and proposed fees on Chinese-built ships. The Trump team is also said to have urged Mexico to impose tariffs on Chinese imports. Germany’s conservative leader Friedrich Merz emerged as the winner in Sunday’s election, but the results
gave his bloc just one clear path to power with intense pressure to move quickly to form a government. Optimism among German companies grew, feeding hopes of a turnaround for Europe’s largest economy that may also benefit from a change in government following
the elections. German coalition talks start as EU leaders are set to hold an extraordinary summit on March 6 to discuss additional support for Ukraine and how to pay for European defense needs. Volodymyr Zelenskiy said he’d be ready to step down as Ukraine’s
president if it were to guarantee peace and NATO membership. He offered to swap all prisoners with Russia.   

EQUITIES:  

US equity futures edged up after US stocks had their worst session of the year on Friday following weaker than expected economic data and a surge in consumers’ long-run inflation views.
Morgan Stanley and JPMorgan said the flight from US stocks won’t last.  Semiconductor stocks will be in the spotlight this week, with Nvidia’s quarterly results expected on Wednesday. Apple said that it will hire 20,000 new workers and produce AI servers in
the US, marking its biggest US commitment to date.  The company said that it plans to spend $500 billion domestically over the next four years, which will include work on a new server manufacturing facility in Houston and a supplier academy in Michigan. On
the data front, the Personal Consumption Expenditure index – the Federal Reserve’s preferred inflation gauge – expected on Friday could help markets gauge the timing of the central bank’s first rate cut this year.  

Futures ahead of the bell: E-Mini S&P +0.5%, Nasdaq +0.5%, Russell 2000 +0.7%, DJI +0.6%

In pre-market trading, Apple (AAPL) shares are edging lower after the iPhone maker said that it will hire 20,000 new workers and produce AI servers in the US. Amneal
Pharmaceuticals (AMRX) shares gain 5.2% after JPMorgan upgraded the stock to overweight from neutral. Block (XYZ) shares are up 0.7% after BMO Capital Markets upgraded the digital payments company to outperform from market perform. Century Aluminum shares
are up 3.6% after BMO Capital Markets upgraded the company to outperform from market perform. Freshpet shares are up 4.7% after Jefferies upgraded the retailer of products for pets to buy from hold. Hawaiian Electric (HE), which has signed settlement agreements
tied to the wildfires in Maui, slips 3.8% after posting a net loss in its fourth-quarter report. Nike (NKE) shares advance 2.3% after Jefferies upgraded the stock to buy from hold. Twilio (TWLO) shares rise 3.3% as Morgan Stanley upgrades to overweight from
equal-weight.

Staples outperformed last week; XLP up nearly 10% from the January low versus Discretionary sector (XLY).

European gauges are mixed in mostly choppy trading. The DAX outperforms as investors welcomed Germany’s election result that put centrist parties on track to form a
coalition, although optimism was tempered by potentially tricky negotiations over economic policy. German conservative opposition leader Friedrich Merz said he’ll move quickly to form a new government after he won Sunday’s federal election. Electrification
stocks fell due to concerns over data-center spending after Microsoft canceled leases for data-center capacity in the US. Prosus shares slumped over 6% after it agreed to buy Just Eat for €4.1 billion in cash. Just Eat Takeaway.com NV rose over 53%. Stoxx
600 +0.1%, DAX +0.9%, CAC -0.2%, FTSE 100 -0.05%. Utilities +1.7%, Autos +0.9%, Banks +0.9%. Basic Resources -1.1%, Technology -0.5%.

Shares in Asia fell, weighed by Chinese technology shares after President Trump stepped up curbs on the world’s second largest economy. The MSCI Asia Pacific ex-Japan
Index slipped 0.5%, with TSMC, Tencent and Alibaba among the biggest drags. Japanese markets were closed for a holiday. China’s top leaders are expected to convene next week at the annual legislative meeting to lay out the economic blueprint for this year.
Investors are closely watching for any new stimulus measures. A selloff in India continued even as Citigroup upgraded the country’s stocks to overweight from neutral. In South Korea, the top financial regulator said the nation is on track to lift its ban on
short selling across all stocks starting March 31. Hang Seng Tech -1.2%, Sensex -1.1%, Thailand -0.8%, Indonesia -0.8%, Taiwan -0.7%, Hang Seng Index -0.6%, Kospi -0.3%, CSI 300 -0.2%, Singapore -0.05%. Vietnam +0.6%, ASX 200 +0.15%.

FIXED INCOME: 
 

Treasuries trade cheaper across the curve, unwinding a portion of Friday’s steep flight-to-quality gains. Front end leads losses with yields ~2bp higher on the day,
ahead of $29b 2-year note auction. US 10-year yields flat at 4.43%; 2s10s curve is ~1bp flatter on the day.  This week’s Treasury auction cycle begins with 2-year notes and includes $70b 5-year and $44b 7-year note sales Tuesday and Wednesday. 

METALS: 

Gold inched higher, remaining near record levels, marking an eight-week price rise—the longest streak since 2020. Last week, gold-backed ETFs experienced their largest
net inflows since 2022. Bullion traded around $2,947 an ounce, just shy of a fresh peak reached on Thursday. Spot gold +0.4%, Silver +0.2%, Copper -0.5%.

ENERGY:   

Oil steadied after ending last week with a rout that accompanied a steep selloff in US stocks. Traders remain focused on the outlook for global demand, as well as
the prospects for talks aimed at ending Russia’s war on Ukraine. Iraq said it will remain committed to OPEC+ quotas and compensate for the previous overproduction while “taking into account” the expected resumption of exports from the semi-autonomous region
of Kurdistan, the oil ministry said. The EU announced new sanctions against Russia. The UK will unveil more today. WTI -0.02%, Brent +0.03%, US Nat Gas -5.0%, RBOB +0.1%. 

CURRENCIES: 

In currency markets, the euro strengthened against most Group-of-10 currencies after Germany’s conservative opposition leader won Sunday’s federal election. EURUSD
rose as much as 0.7% before paring the gains, supported by relief that Germany’s far-right party didn’t perform as strongly as expected. Despite the election result, analysts noted limited potential for a domestic fiscal regime shift, which could have positively
impacted the euro. Meanwhile, the US Dollar Index fell by 0.4% before recovering losses. Sterling remained steady as attention turns to speeches from Bank of England policymakers. The yen is the weakest of the G-10 currencies. US$ Index +0.02%, GBPUSD +0.02%,
EURUSD +0.05%, USDJPY +0.35%, AUDUSD +0.2%, NZDUSD +0.1%, USDCHF +0.3%, USDCAD -0.1%.

Spot Bitcoin ~flat, Spot Ethereum -4.5%. Major funds with $100M+ just reported sizable BTC buys. From Goldman Sachs to the Bank of Montreal and UK-based Barclays.

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

Data sources: Bloomberg, Reuters, CQG

David Wienke