Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET ADP Employment Change; 9:45ET S&P Global US Services PMI, Composite PMI; 10:00ET
Factory Orders, Durable Goods Orders, ISM Services Data; 2:00ET Fed’s Beige Book

Highlights and News:  

• Germany will unlock hundreds of billions of euros for defense and infrastructure investments
• Trump administration proposed selling the headquarters of both the DOJ and the FBI
• Trump Calls for End to $52 Billion Chips Act
• Trump said he’s seeking permanent income tax cuts “across the board”
• The IRS is drafting plans to cut up to half of its 90,000-person workforce
• LUTNICK: TRUMP THINKING ABOUT AUTOS, USMCA FOR TODAY’S PLAN

World stocks rose,  aided by comments from Commerce Secretary Howard Lutnick who said late Tuesday that President Trump could ease tariffs he has imposed on top trade
partners. China unlocked more fiscal stimulus today, promising greater efforts to support consumption as its top priority and cushion the impact of an escalating trade war with the United States. The EU responded to Trump’s aid halt with Germany unveiling
plans to unlock hundreds of billions of euros for defense and infrastructure investments in a dramatic policy shift. The Berlin agreement issues a challenge to the other 26 EU members ahead of their Thursday meeting, where they will address increasing military
spending throughout the bloc. European Commission President Ursula von der Leyen said that the EU also plans to activate a mechanism that would allow countries to use their national budgets to spend an additional €650 billion on defense over four years without
triggering budgetary penalties.        

EQUITIES:  

US equity futures bounce back a bit from yesterday’s broad decline after Commerce Secretary Lutnick suggested President Trump may offer a pathway for tariff relief for Mexico and Canada.
In an address to Congress, Trump acknowledged that there may be an “adjustment period” to tariffs as he defended his policies to remake the US economy. On the corporate front, Blackrock led a consortium that will buy a controlling stake in Panama ports and
a larger unit that has operations across 23 countries. It’s one of the biggest acquisitions of the year that marks a win for Trump, who had raised concerns over control of key ports near the Panama Canal. Meanwhile, Trump said he received a letter from Zelenskiy
saying that Ukraine was ready to negotiate to end Russia’s war and sign a minerals deal.

Futures ahead of the bell: E-Mini S&P +0.1%, Nasdaq +0.3%, Russell 2000 +0.5%, DJI +0.05%

In pre-market trading, Palantir Technologies (PLTR) is up 2.6% after William Blair upgraded the AI software company to market perform from underperform. Moderna (MRNA)
shares rally 8.6% after Chief Executive Officer Stephane Bancel and Board Director Paul Sagan said they bought $6 million of stock. AeroVironment (AVAV) shares are down 20% after the small, unmanned aircraft maker slashed its FY forecasts. It also reported
third-quarter results that missed expectations. AppLovin Corp. (APP) is downgraded to sell from neutral at Arete, which cites concerns over the firm’s e-commerce business. Carrier Global (CARR) shares rise as much as 2.9% after JPMorgan upgrades the heating
and air conditioning equipment maker to overweight from neutral. Shares of automakers, banks and chip firms jumped in premarket trading on Wednesday after Lutnick said the Trump administration may announce a pathway for tariff relief on goods from Canada and
Mexico covered by a North American free trade agreement.

Fear & Greed Index hit 17 yesterday, which was also the low on the August 5^th bottom. Fear and Greed Index is confirmed to have hit
1 at least once (March 12, 2020), during the onset of the COVID-19 pandemic.

European gauges jumped as Germany’s move to exclude defense spending from fiscal limits, prompted by declining US support, is rippling across markets. Germany plans
to revise its constitution to exclude defense and security expenditures from fiscal spending caps, enabling investments worth hundreds of billions of euros. The Dax outperforms in the region with Siemens AG up ~8% and Heidelberg Materials AG up 14%. The Stoxx
600 gains more than 1%, led by the construction and materials subindex which hit a fresh record high. Defense stocks surged, with Germany’s Rheinmetall AG gaining 3.3% and Thales SA in France rising 7.3%. In earnings, Bayer forecast a third straight year of
falling profit but a fourth-quarter sales beat boosted the stock. Adidas shares declined, after its 2025 profit forecast missed. Stoxx 600 +1.3%, DAX +3.3%, CAC +2%, FTSE 100 +0.4%. Construction +5.7%, Banks +5.5%, Autos +3%, Chemicals +3%. Real Estate -3.1%,
Utilities -2%, Telecom -1.4%. 

Chinese stocks led a rally in Asia after Beijing set an ambitious economic growth target that boosted expectations of further stimulus. China raised its general budget
deficit to the highest level in more than three decades, as Beijing ramps up spending to counter the effects of rising US tariffs. The MSCI Asia Pacific Index rose 1%, the most in three weeks, with Chinese technology stocks among the biggest boosts. Hong Kong
shares outperformed after the National People’s Congress vowed more support, maintained its economic growth target at about 5% for 2025 and set the highest fiscal deficit level in more than three decades. Elsewhere, India’s NSE Nifty 50 Index climbed over
1%, snapping a record-setting 10-day losing streak.  Hang Seng Tech +4%, Hang Seng Index +2.8%, Thailand +2.5%, Indonesia +2.4%, Taiwan +1.2%, Kospi +1.1%, Sensex +1%, Philippines +0.9%, CSI 300 +0.4%, Topix +0.3%, Singapore +0.2%. Vietnam -0.5%, ASX 200 -0.7%.

FIXED INCOME: 
 

Treasuries are steady, with the curve steeper, as front-end yields are more than 7bp richer on the day with long end little changed. US 10-year yield is lower by
1.5bps at 4.23%; 2s10s +5.5bps. The logic that more spending will fan inflation, requiring tighter policy from the European Central Bank, sent 10-year bond yields at least 10 basis points higher in the UK, France, Italy and Spain.

METALS: 

Silver climbed to a one-week high as concerns about a global trade war fanned haven demand and the dollar weakened. Gold held near a two-day advance. Copper prices
surged by more than 5% as President Trump suggested imports of the metal could be subject to a 25% tariff. Unlike gold, a huge chunk of silver demand comes from industrial applications. Demand has exceeded supply for several years, and although there’s still
a large amount of above-ground stockpiles. Spot gold -0.3%, Silver +0.8%, Copper +4.8%.

ENERGY:   

Oil prices declined for a third session on Wednesday, as investors worried about OPEC+ plans to proceed with output increases in April. The European Commission postponed
publishing a plan to phase out Russian fossil fuels originally scheduled for March 26. Citi is “fundamentally bearish oil” as non-OPEC+ output growth is set to outpace demand this year, with Brent seen dropping to $60. Investors await government data on U.S.
stockpiles, due later today. WTI -1.8%, Brent -1.4%, US Nat Gas +1.4%, RBOB -2.4%.  

CURRENCIES: 

In currency markets, the euro surged and is on course for its largest three-day gain since late 2022 as investors bet the increased spending by Germany and others
will boost the European economy. The dollar fell to a three-month low on concerns about the negative impact of US tariffs on the economy. Trump acknowledged there may be an “adjustment period” as his tariffs take effect and reiterated his threat to impose
25% levies on aluminum and steel and to put in place reciprocal duties on all countries with barriers to American imports. The Swedish krona outperforms, up more than 1% against the dollar. The Swiss National Bank is considering cutting interest rates to combat
low inflation, with President Schlegel suggesting it may be necessary to prevent inflation from slowing too much. The yen is slightly higher after BOJ’s deputy governor hints at more rate hikes. The RBA doesn’t share the market’s confidence that a series of
rate cuts will follow last month’s easing, Deputy Governor Hauser said. Aussie$ is marginally higher. US$ Index -0.6%, GBPUSD +0.15%, EURUSD +0.75%, USDJPY -0.3%, AUDUSD +0.15%, NZDUSD +0.3%, USDNOK -0.5%, USDSEK -1.2%.

Bitcoin +2.7%, Ethereum +1.7%.

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
• AIG (AIG) Raised to Buy at HSBC; PT $93
• Arista Networks (ANET) Raised to Buy at UBS
• Carrier Global (CARR) Raised to Overweight at JPMorgan; PT $78
• Chubb (CB) Raised to Buy at HSBC; PT $323
• GE Vernova (GEV) Raised to Buy at Guggenheim; PT $380
• Illumin Holdings Inc (ILLM CN) Raised to Buy at TD Cowen; PT C$4
• Intuit (INTU) Raised to Overweight at JPMorgan; PT $660
• Molina (MOH) Raised to Overweight at Wells Fargo; PT $372
• Mosaic (MOS) Raised to Equal-Weight at Barclays; PT $27
• Palantir (PLTR) Raised to Market Perform at William Blair
• Permian Resources (PR) Raised to Positive at Susquehanna; PT $20
• Petrobras (PETR4 BZ) ADRs Raised to Buy at HSBC; PT $15
• Republic Services (RSG) Raised to Outperform at CIBC; PT $264
• Royal Caribbean (RCL) Raised to Buy at Loop Capital; PT $250
• TKO (TKO) Raised to Buy at Seaport Global Securities
• Transocean (RIG) Raised to Hold at SEB Equities; PT $2.80
• Truist Financial (TFC) Raised to Outperform at Baird; PT $52
• Unum (UNM) Raised to Strong Buy at Raymond James; PT $108
• Downgrades
• Accolade (ACCD) Cut to Neutral at Piper Sandler
• Akoya Biosciences (AKYA) Cut to Neutral at Piper Sandler; PT $2.40
• AppLovin (APP) Cut to Sell at Arete; PT $200
• Ashland Inc (ASH) Cut to Neutral at Seaport Global Securities
• Civitas Resources Inc (CIVI) Cut to Hold at SWS
• CubeSmart (CUBE) Cut to Sector Perform at Scotiabank; PT $46
• HB Fuller (FUL) Cut to Neutral at Seaport Global Securities
• Lexicon Pharma (LXRX) Cut to Market Perform at Leerink; PT $1
• PPG Industries (PPG) Cut to Neutral at Seaport Global Securities
• Sunnova Energy (NOVA) Cut to Equal-Weight at Barclays; PT $1
• Cut to Neutral at Mizuho Securities; PT $1
• T-Mobile (TMUS) Cut to Hold at HSBC; PT $270
• Tandem Diabetes (TNDM) Cut to Equal-Weight at Morgan Stanley; PT $22
• Vital Energy Inc (VTLE) Cut to Hold at SWS
• Wajax (WJX CN) Cut to Sector Perform at Scotiabank; PT C$22
• Initiations
• BioNTech (BNTX) ADRs Rated New Buy at Clear Street; PT $164
• Cargojet (CJT CN) Rated New Buy at Paradigm Capital; PT C$150
• Currenc Group (CURR) Rated New Buy at Roth Capital Partners; PT $3.50
• Eagle Financial Services (EFSI) Rated New Buy at DA Davidson; PT $40
• Fluence Energy (FLNC) Rated New Outperform at Mizuho Securities; PT $8
• Gambling Group (GAMB) Rated New Overweight at Cantor; PT $20
• Intellia Therapeutics (NTLA) Rated New Buy at HC Wainwright; PT $30
• International Paper (IP) Resumed Buy at Citi; PT $60
• Krystal Biotech (KRYS) Rated New Buy at Jefferies; PT $245
• Marker Therapeutics (MRKR) Rated New Buy at Canaccord; PT $8
• PRO REIT (PRV-U CN) Rated New Hold at Desjardins; PT C$5.75
• Sandisk (SNDK) Reinstated Equal-Weight at Barclays; PT $50
• Target (TGT) Rated New Neutral at KGI Securities; PT $132
• Titan America (TTAM) Rated New Buy at Jefferies; PT $19
• Vistra Corp (VST) Rated New Hold at Daiwa; PT $120
• Wix.com (WIX) Rated New Sector Outperform at Scotiabank; PT $250

Data sources: Bloomberg, Reuters, CQG

David Wienke