Daily Game Plan

by Contributor
on March 6, 2025

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

TODAY’S ECONOMIC DATA:  8:15ET ECB Rate Decision; 8:30ET Trade Balance, Nonfarm Productivity, Unit Labor Costs,
Initial Jobless Claims; 8:45ET Fed’s Harker speaks, ECB Press Conference; 10:00ET Wholesale Trade Sales, Wholesale Inventories; 2:00ET Trump to sign more executive orders; 3:30ET Fed’s Waller speaks; 7:00ET Fed’s Bostic speaks

ECB CUTS DEPOSIT FACILITY RATE BY 25BPS TO 2.50%, AS EXPECTED; SAYS RATES ARE `BECOMING MEANINGFULLY LESS RESTRICTIVE’

Highlights and News:  

  • Russia Says it Needs Firm and Final Settlement on Ukraine, Not a Pause That West Will Use to Rearm
  • China’s New AI Tools Ignite Stock Market Frenzy as Alibaba Soars
  • Modern slavery cases in Britain reach record high –

    RTRS
  • Trump warns Hamas as US holds unprecedented talks for Gaza hostages
  • Former MS banker Michael Grimes will be tapped to lead a planned US sovereign wealth fund
  • Walmart asked Chinese suppliers to lower prices by up to 10% to offset Trump’s tariffs
  • The Chargers released linebacker Joey Bosa

 

World stocks are mixed with markets focused on the global bond rout and economic fallout from the brewing trade war, while the European Central Bank was gearing up
to cut its interest rates again today. Emerging-market stocks extended a rally driven by AI-related shares as risk appetite improved. The ECB is expected to cut rates by a quarter-point to 2.5% but focus will be on the outlook.  A worldwide bond market sell-off
continues unabated, one day after the 10-year German Bund yield—a key influencer of global borrowing costs—experienced its largest surge since the 1990s following Germany’s plan to step up spending. EU leaders are holding an emergency summit today in Brussels
to discuss the war in Ukraine and defense. Reuters reported Donald Trump is planning to revoke temporary legal status for around 240,000 Ukrainians who fled to the US amid the conflict with Russia.

 

EQUITIES:  

US equity futures are sharply lower, as higher global bond yields, trade-war fears and disappointing tech earnings roiled markets. Marvell Technology shares dropped 15% post-market after
the chipmaker’s results and revenue forecast failed to live up to lofty expectations. CrowdStrike tumbled after the cybersecurity company issued a worse-than-expected earnings outlook. Chip shares have also come under pressure after Alibaba Group introduced
its latest DeepSeek rival at a fraction of the price. Trump may exempt certain agricultural products from levies imposed on Canada and Mexico, Agriculture Secretary Brooke Rollins said. Former Morgan Stanley banker Michael Grimes will be tapped to lead a planned
US sovereign wealth fund, sources said. 

Futures ahead of the bell: E-Mini S&P -1.3%, Nasdaq -1.6%, Russell 2000 -1.5%, DJI -1%

In pre-market trading, US technology stocks are set to slump as worries about American dominance in the artificial intelligence race resurface following a pair of new
AI tools from China. JD.com ADRs (JD) jump as much as 11% after the Chinese e-commerce firm reported net revenue for the fourth quarter that beat the average analyst estimate. Peers PDD Holdings climbs 4.4% and Alibaba Group rises 3.8%. MongoDB shares (MDB)
are down 18% after the database software company gave a full-year forecast that is weaker than expected. ON Semiconductor (ON) slips over 3% as analysts are generally positive on the company’s bid to buy Allegro Microsystems (ALGM), seeing synergies between
the two, though some questioned the offer price. Shares of ECARX Holdings (ECX), a mobility technology provider, are up 9% after the company said it won an award to provide Volkswagen and Skoda with digital cockpit solutions. ALX Oncology (ALXO) shares rise
13% after Jefferies upgraded the drug developer to buy from hold. Burlington Stores (BURL) shares rise 14% after the retailer reported fourth-quarter comparable sales and profit that topped expectations. Broadcom reports after the bell.

European gauges are mostly lower outside of Germany with the Stoxx 600 reversing early gains as real estate and healthcare names underperform. Automakers rallied following
a delay in some US tariffs on Mexico and China. Among auto parts makers, Valeo SE jumped 4.4%, while Continental AG and Forvia SE also rose. Meanwhile, the corporate earnings season is entering its final stretch. Air France-KLM Group rallied 22% after beating
estimates. Lufthansa shares rose more than 8% after projecting significantly higher earnings this year. Stoxx 600 -0.6%, DAX +0.3%, CAC -0.5%, FTSE 100 -1.1%. Real Estate -2.6%, Healthcare -1.8%, Financial Services -1.8%, Media -1.7%. Autos +1.5%, Banks +1.2%. 

Shares in Asia rose as Chinese shares extended their rally. The MSCI Asia Pacific Index gained 1.5%. A wave of new artificial intelligence tools from China sparked
frenzied trading in the nation’s stock market, driving an index of technology companies to a multi-year high. Shares in Alibaba Group surged over 8% after the Chinese internet giant released its latest open-source model, claiming that its overall performance
is on a par with artificial intelligence startup DeepSeek’s R1. Several Chinese companies, including Moonshot, Zhipu, Alibaba, ByteDance, Baichuan, Minimax, 01.AI, and Stepfun, are developing AI models and chatbots that could rival those of global leaders.
Elsewhere, Japanese stocks climbed on boosts from the US tariff delay as well as Germany’s historic spending plans. Hang Seng Tech +5.4%, Hang Seng Index +3.3%, Philippines +1.6%, CSI 300 +1.4%, Indonesia +1.3%, Topix +1.2%, Vietnam +1%, Sensex +0.8%, Kospi
+0.7%. ASX 200 -0.6%, Taiwan -0.7%, Thailand -1.4%.

FIXED INCOME: 
 

Treasuries are mixed as US trading gets under way with belly to long-end yields higher on the day while front end outperforms, leaving 2s10s spread near widest levels
of past month. France and Germany lead bigger selloff in core European rates, weighing on Treasuries and extending this week’s global yield-curve steepening move. German government bonds fall again, extending their worst daily drop since 1990. Japan’s 10yr
trades above 1.5% for the first time since 2009.  Focal points of US session include weekly jobless claims data and three Fed speakers, following ECB rate decision at 8:15ET; President Christine Lagarde speaks 30 minutes later. US 10-year yield is around 4.27%;
2s10s curve +6.5bps.

 

METALS: 

Gold fell as investors assessed the latest tariff developments and their impact on the US economy and Federal Reserve decisions. The precious metal was trading around
$2,900 an ounce, about $60 short of the all-time high reached last week. There was more movement on the tariff front on Wednesday, with President Trump delaying newly imposed automaker levies on Mexico and Canada by a month. Spot gold -0.5%, Silver -0.7%,
Copper -0.5%.

 

 

ENERGY:   

 

Oil prices edge higher, recovering slightly from a multi-year low, though Brent was still below $70 under pressure from trade tariffs and OPEC+ plans to raise output.
Sources said that Trump could eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, that comply with existing trade agreements. There are further signs of weakness in American oil demand, with US waterborne crude oil imports
dropping to a four-year low in February, driven by a fall in Canadian barrels shipped to the East Coast. US Gulf Coast refineries are buying less Mexican crude, with March orders down 17% from this month, according to a loading program. Meanwhile, the US is
considering a plan to disrupt Iran’s oil by halting vessels. Chinese officials have flagged that more stimulus is possible if economic growth slows. WTI +0.6%, Brent +0.6%, US Nat Gas ~flat, RBOB ~flat.  

 

CURRENCIES: 

In currency markets, the euro hovered near four-month highs ahead of the ECB rate decision.  The US Dollar Index extends its decline for a fourth straight day. The
Swedish krona rose over 1% against the greenback before paring gains, after inflation accelerated more than expected in February. The Swiss franc and yen also outperform on haven demand, with the yen getting an added boost from high wage demands from Japan’s
largest union group. Eastern Europe currencies halted their three-day rally while yields in the region jumped. US$ Index -0.1%, GBPUSD -0.1%, EURUSD +0.1%, USDJPY -0.9%, AUDUSD ~flat, NZDUSD +0.15%, USDCHF -0.4%, USDCAD +0.2%, USDSEK -0.4%, USDNOK -0.6%. 

 

 

Bitcoin -0.2%, Ethereum +1.5%. Howard Lutnick Says President Trump To Unveil Bitcoin Reserve Strategy This Week.

 

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
    • ALX Oncology (ALXO) Raised to Buy at Jefferies; PT $3
    • CubeSmart (CUBE) Raised to Overweight at KeyBanc; PT $47
    • D.R. Horton (DHI) Raised to Buy at Seaport Global Securities; PT $164
    • Deckers Outdoor (DECK) Raised to Buy at CFRA
    • Freeport (FCX) Raised to Buy at Deutsche Bank; PT $47
    • Full Truck Alliance (YMM) ADRs Raised to Overweight at JPMorgan
    • KB Home (KBH) Raised to Buy at Seaport Global Securities; PT $79
    • Lennar (LEN) Raised to Buy at Seaport Global Securities; PT $154
    • M/I Homes (MHO) Raised to Buy at Seaport Global Securities; PT $151
    • Marvell Technology (MRVL) Raised to Buy at Loop Capital; PT $110
    • Meritage Homes (MTH) Raised to Neutral at Seaport Global Securities
    • PulteGroup (PHM) Raised to Neutral at Seaport Global Securities
    • Taylor Morrison (TMHC) Raised to Neutral at Seaport Global Securities
    • Tri Pointe Homes (TPH) Raised to Buy at Seaport Global Securities
    • Walker & Dunlop (WD) Raised to Outperform at KBW; PT $105
    • XPO Inc (XPO) Raised to Buy at Vertical Research; PT $140
    • Zscaler (ZS) Raised to Buy at Rosenblatt Securities Inc; PT $235
  • Downgrades
    • Brown-Forman (BF/B) Cut to Underweight at Morgan Stanley; PT $32
    • Caesarstone (CSTE) Cut to Speculative Buy at Benchmark; PT $5
    • Campbell’s (CPB) Cut to Neutral at JPMorgan; PT $37
    • Chimerix (CMRX) Cut to Hold at Jones; PT $8.55
    • Marvell Technology (MRVL) Cut to Hold at Summit Insights
    • MongoDB (MDB) Cut to Sector Weight at KeyBanc
      • Cut to Equal-Weight at Wells Fargo; PT $225
    • Target (TGT) Cut to Neutral at President Capital Management; PT $127
    • Thinkific Labs (THNC CN) Cut to Sector Perform at ATB Capital; PT C$3.75
    • VersaBank (VBNK CN) Cut to Neutral at Roth Capital Partners; PT C$14.90
  • Initiations
    • ImmunityBio Inc (IBRX) Rated New Buy at HC Wainwright; PT $8
    • Insulet (PODD) Rated New Outperform at RBC; PT $340
    • KE Holdings (2423 HK) ADRs Rated New Buy at GF Securities; PT $28.67
    • Lundin Mining (LUN CN) Rated New Buy at Goldman; PT C$16.60
    • Pilgrim’s Pride (PPC) Rated New Neutral at Grupo Santander; PT $60
    • Robinhood (HOOD) Rated New Overweight at Cantor; PT $69
    • Tourmaline Bio Inc (TRML) Rated New Outperform at Wedbush; PT $42
    • Youdao (DAO) ADRs Rated New Buy at Sealand Securities

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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