Daily Game Plan

by Contributor
on February 25, 2025

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

TODAY’S ECONOMIC DATA:  8:30ET Philadelphia Fed Non-Manufacturing Activity; 9:00ET FHFA House Price Index; 10:00ET
Conf. Board Consumer Confidence, Richmond Fed Mfg Index; 10:30ET Dallas Fed Services Activity; 11:45ET Fed’s Barr speaks; 1:00ET 5-Year Auction, Fed’s Barkin speaks

Highlights and News:  

  • US Seeks to Toughen Chip Controls Over China
  • Israel Seeks Gaza Truce Extension While Preparing Return to War
  • There’s around $7 trillion worth of rare earth minerals in the Donbass region that is now part of Russia
  • SpaceX is said to be seeking to deploy Starlink terminals to upgrade the FAA’s airspace system
  • Trump said he wanted to revive the Keystone XL oil pipeline

 

Global stocks cautiously recover from an earlier decline as US efforts to limit China’s technological prowess sparked broad declines for chipmaker shares. Investors
were rattled early on by an order from President Trump to limit Chinese investments in strategic areas such as chips, AI and aerospace. Trump indicated late on Monday that his plans to slap a 25% levy on imports from Canada and Mexico from early March remain
on schedule. Meanwhile, Israel wants to extend the Gaza ceasefire when it expires this weekend so as many hostages as possible can be freed — while starting to amass troops for a return to war if required.  President Putin said Russia is ready to work with
the United States on rare earth elements. There’s around $7 trillion worth of it in the Donbass region that is now part of Russia.  

 

EQUITIES:  

US equity futures reverse earlier losses, led by weakness across chip companies and megacaps, as investors digested fresh tariff comments from Trump. President Trump spelled out more
measures to curb China’s semiconductor industry and urged allies to escalate restrictions. Nvidia’s earnings report on Wednesday could be yet another catalyst to spark volatility given its outsized impact on the broader market. Tesla’s sales in Europe plummeted
45% last month, while the overall EV market saw a 37% surge. There’s growing “suspicion” among investors about the scope for more equity gains at a time when European and Chinese stocks are outperforming, according to Bank of America strategist Michael Hartnett.

Futures ahead of the bell: E-Mini S&P +0.1%, Nasdaq +0.1%, Russell 2000 +0.05%, DJI +0.2%

In pre-market trading, Cryptocurrency-exposed stocks slide as Bitcoin tumbles below $90,000 to hit the lowest level since mid-November, paring the gains seen since
Donald Trump’s election to the White House. Coinbase (COIN) -4%, Mara Holdings (MARA) -4%, Riot Platforms (RIOT) -4%. Chegg (CHEGG) tumbles 22%, after the education technology company provided a lackluster 1Q revenue outlook. Eli Lilly & Co. (LLY) ticks about
2% higher as management ramps up the fight against cheaper, copycat versions of Zepbound by lowering prices for a version of its blockbuster obesity drug. EverQuote (EVER) rises 25% after the Internet-based marketing firm swung to a profit in the 4Q and provided
1Q revenue guidance that topped estimates. Hims & Hers Health (HIMS) slides 22% after the telehealth company reported fourth-quarter results and said it will soon stop selling some compound weight-loss drugs. Krispy Kreme (DNUT) falls 10% after the company’s
2025 net revenue forecast disappointed. Maravai LifeSciences (MRVI) falls 16% after the LifeSciences firm said it is postponing its fourth-quarter earnings results and intends to delay the filing of its 2024 Form 10-K. Navitas Semiconductor (NVTS) falls 19%
after the semiconductor device company gave a first-quarter forecast that is weaker than expected. Zoom Communications (ZM) declines 4% after the communications software company gave a forecast that is modestly weaker than expected.

European gauges advanced, as gains in banks, healthcare and defense stocks outweighed technology losses spurred by concerns over US chip curbs on China. Germany’s economy
contracted at the end of 2024 due to a steep slump in exports, despite a modest pickup in consumer spending. Euro-zone wage growth eased at the end of 2024, supporting European Central Bank plans to keep cutting interest rates as inflation slows. The healthcare
sector is near the top of the leaderboard, boosted by a 5% jump in index heavyweight Novo Nordisk after Hims and Hers Health said it is going to stop selling some weight-loss drugs. Medical products maker Smith & Nephew jumped as much as 10% after annual sales
and profit beat analysts’ expectations. Unilever Plc shares fell following the surprise exit of its chief executive officer. Defense stocks got a boost from news that Germany is discussing a €200 billion emergency defense fund. Stoxx 600 +0.4%, DAX +0.2%,
CAC -0.05%, FTSE 100 +0.5%. Banks +1.8%, Healthcare +1.2%, Aero & Defense +1.1%, Insurance +0.8%. Technology -1.4%, Basic Resources -0.6%.

Shares in Asia fell as US President Trump’s continued attempts to pressure China and other nations dented investor sentiment. The MSCI Asia Pacific Index slid 1%, with
TSMC, Hitachi and Alibaba among the biggest drags on the regional gauge.  Trump’s team is said to be sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry. Technology shares
weighed on Japan’s markets on US-China concerns, as well as global AI-related demand, after a report that Microsoft has canceled some leases for data center capacity. Korea’s Kospi mostly held losses after the Bank of Korea lowered its benchmark interest rate
as expected. Indonesia -2.4%, Thailand -2.4%, Hang Seng Tech -1.6%, Nikkei 225 -1.4%, Hang Seng Index -1.3%, CSI 300 -1.1%, ASX 200 -0.7%, Kospi -0.6%, Philippines -0.5%, Singapore -0.3%, Vietnam -0.1%. Sensex +0.2%.

FIXED INCOME: 
 

Treasuries rallied as traders boosted bets on Federal Reserve interest-rate cuts, with President Trump’s tariff plans weighing on risk appetite. Ten-year Treasury
yields slipped over 8bps to ~4.32%, the lowest level in more than two months.  Money markets implied more easing from the Fed, fully pricing two quarter-point reductions this year for the first time in four weeks. Attention turns to an auction of $70 billion
five-year notes, alongside commentary from the Fed’s Michael Barr on financial stability and the Bank of Richmond President Tom Barkin on inflation. Treasury auction cycle concludes Wednesday with $44b 7-year note sale.

 

METALS: 

Gold eased as investors took profits after a record-breaking session, but prices were still supported by optimism over a potential Federal Reserve rate cut and increasing
demand for safe-haven assets.  The shifting views on the Fed’s monetary policy — coupled with uncertainty over Trump’s trade and geopolitical agendas — have sparked renewed interest in bullion-backed exchange-traded funds. Last week, net inflows were the largest
since 2022. Copper clawed back early losses during European trading on the LME, bolstered by rising requests for metal stored LME warehouses in Asia. Glencore also moved to mothball a copper smelter in the Philippines following a collapse in processing fees,
in a move that could tighten regional supply. Spot gold -0.7%, Silver -1.0%, Copper +0.9%.

 

 

ENERGY:   

 

Oil is slightly lower after a bump the previous day when fresh U.S. sanctions imposed on Iran increased concerns that supply might tighten, as global refining margins
remained strong. The global crude market “remains tight,” with OPEC+ aiming to keep it in balance, UBS said, forecasting prices at $80 at the end of the second, third and fourth quarters. Trump said he wanted to revive the Keystone XL oil pipeline, even though
its developer has already walked away from the project. He promised “Easy approvals, almost immediate start!”  WTI -0.5%, Brent -0.55%, US Nat Gas +1.3%, RBOB +0.1%. 

 

CURRENCIES: 

In currency markets, the dollar eased as Treasury yields slipped to the lowest in more than two months as risk aversion picked up pace. The euro is a touch off Monday’s
one-month peak hit in the aftermath of the German election, and the pound is higher, just off Monday’s two-month high. The Japanese yen, which has been boosted by market bets on further rate hikes from the Bank of Japan, was steady. US$ Index -0.1%, GBPUSD
+0.25%, EURUSD +0.3%, USDJPY +0.05%, AUDUSD -0.1%, NZDUSD -0.2%, USDCHF -0.3%, USDCAD +0.05%.

 

 

Spot Bitcoin -5.2%, Spot Ethereum -8.1%. Bitcoin headed for its biggest one-day drop since August that also hit stocks and bonds. Nervousness over US tariffs and
results from Nvidia this week, as well as last week’s hack of $1.5 billion worth of ether from the Bybit exchange weighs on investor confidence.

 

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
    • Block (XYZ) Raised to Equal-Weight at Morgan Stanley; PT $65
    • Constellium SE (CSTM) Raised to Buy at Deutsche Bank; PT $15
    • Globant (GLOB) Raised to Neutral at Redburn; PT $140
    • Quanta Services (PWR) Raised to Outperform at BMO; PT $316
    • Telecom Argentina (TECO2 AR) ADRs Raised to Neutral at JPMorgan; PT $13
    • Walmart (WMT) Raised to Buy at DZ Bank; PT $110
  • Downgrades
    • AllianceBernstein (AB) Cut to Hold at TD Cowen; PT $38.50
    • Civitas Resources Inc (CIVI) Cut to Sector Weight at KeyBanc
    • Coca-Cola Europacific (CCEP) Cut to Reduce at Kepler Cheuvreux
    • GDS Holdings (GDS) ADRs Cut to Sector Perform at RBC; PT $37
    • Hims & Hers Health (HIMS) Cut to Hold at Nephron Research; PT $40
    • Liberty Latin America (LILA) Cut to Underweight at Barclays; PT $6.50
    • Lundin Mining (LUN CN) Cut to Reduce at Veritas Investment Research Co
    • Quanta Services (PWR) Cut to Hold at Daiwa; PT $280
    • Realty Income (O) Cut to Neutral at BNPP Exane; PT $61
    • Tempus AI (TEM) Cut to Neutral at JPMorgan; PT $55
  • Initiations
    • Centrus Energy (LEU) Rated New Buy at HC Wainwright; PT $300
    • Costco (COST) Rated New Outperform at KGI Securities; PT $1,190
    • DMG Blockchain Solutions Inc (DMGI CN) Reinstated Buy at Canaccord
    • DoubleDown Interactive (DDI) ADRs Reinstated Buy at B Riley; PT $23
    • EHang Holdings (EH) ADRs Rated New Buy at CMB International; PT $30
    • Infinity Natural Resources (INR) Rated New Overweight at Stephens
      • Rated New Strong Buy at Raymond James
      • Rated New Outperform at RBC; PT $30
      • Rated New Overweight at KeyBanc
    • Insmed (INSM) Rated New Outperform at RBC; PT $100
    • Intuitive Machines (LUNR) Rated New Hold at Deutsche Bank; PT $18
    • Kura Sushi (KRUS) Rated New Hold at TD Cowen; PT $72
    • Maze Therapeutics (MAZE) Rated New Outperform at Leerink; PT $28
      • Rated New Buy at TD Cowen
      • Rated New Overweight at JPMorgan; PT $30
      • Rated New Buy at Guggenheim; PT $19
    • Metsera (MTSR) Rated New Outperform at Evercore ISI
      • Rated New Overweight at Cantor
      • Rated New Buy at Guggenheim; PT $56
    • MSC Income Fund (MSIF) Rated New Market Perform at KBW; PT $17.50
    • Nebius Group (NBIS) Rated New Buy at DA Davidson; PT $50
    • Sandisk (SNDK) Rated New Equal-Weight at Wells Fargo; PT $56
    • Snowline Gold (SGD CN) Rated New Buy at Desjardins; PT C$11
    • Solaris Energy (SEI) Rated New Buy at Janney Montgomery; PT $57
    • Trevi Therapeutics (TRVI) Rated New Buy at Clear Street; PT $11
    • Warby Parker (WRBY) Rated New Neutral at Roth Capital Partners; PT $26
    • Wave Life Sciences (WVE) Rated New Buy at Jefferies; PT $26

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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