Daily Game Plan

by Contributor
on March 20, 2025

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

TODAY’S ECONOMIC DATA:  8:30ET Initial Jobless Claims, Philly Fed; 10:00ET Leading Index, Existing Home Sales; 1:00ET
10-year TIPS reopening

BOE LEAVES KEY RATE AT 4.5%, AS EXPECTED

Highlights and News:  

  • Carney Set to Call Canada Snap Election for April 28
  • Russia and Ukraine Keep Up Drone Attacks Amid Truce on Energy
  • Trump to sign order to shut down Department of Education
  • Nvidia Plans Major Outlay on US-Made Chips
  • BOE SAYS ‘GRADUAL AND CAREFUL’ APPROACH TO EASING APPROPRIATE

 

World stocks fell as doubts grew about the Federal Reserve’s ability to significantly cut interest rates this year due to potentially inflationary trade tariffs.
Sentiment was pressured by European Central Bank President Christine Lagarde, who said Thursday that US tariffs have raised uncertainty over the economic outlook. A selloff in Turkish markets abated slightly as authorities announced steps to curb volatility
following the shock detention of President Erdogan’s main political rival. Canadian Prime Minister Mark Carney is set to call a snap federal election on Sunday for an expected vote on April 28, the Globe and Mail reported. Russia and Ukraine exchanged mass
drone attacks overnight, even as the two countries declared they’re ready to observe a moratorium on strikes against energy infrastructure sought by President Trump.   

 

EQUITIES:  

US equity futures reverse some of yesterday’s gains made after Fed Chair Powell offered reassuring comments about the outlook for US growth and inflation. The central bank may deliver
fewer cuts than markets expect given the risks of higher inflation, BlackRock said. Nvidia CEO Jensen Huang says the company hasn’t been approached about purchasing a stake in Intel, following a report about a consortium with TSMC to operate Intel’s factories.
Nvidia plans to invest hundreds of billions of dollars in purchasing US-manufactured chips and electronics over the next four years, the Financial Times reported. Tesla is declining the most among the Magnificent Seven stocks after the electric-vehicle maker
recalled all the Cybertrucks it produced and sold in the first 15 months it was on the market in the US.

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.5%, Russell 2000 -0.6%, DJI -0.4%.

In pre-market trading, Akebia Therapeutics (AKBA) slumps 28% after the drugmaker launched a secondary offering of shares. Aramark (ARMK) falls 2% after peer Sodexo
lowered its revenue guidance, citing slower growth at its US university business. Cava Group (CAVA) gains 3% after an upgrade to overweight at JPMorgan. Celldex Therapeutics (CLDX) rises 2% after Morgan Stanley initiated coverage of the drug developer with
an overweight rating. Coty (COTY) gains 3% after Citi raised the cosmetics company to buy. PDD (PDD) ADRs fall 6% after the Chinese budget-shopping site reported sales that missed estimates for a third consecutive quarter. ProAssurance (PRA) surges 49% after
the specialty insurer agreed to be bought by the Doctors Co., the largest US physician-owned medical malpractice insurer. Microchip Technology (MCHP) falls 6% after the company offered $1.35 billion in depositary shares.  Rivian (RIVN) slips 2% as Piper downgrades
the stock to neutral. QXO (QXO) rises 3% after the building products distributor struck a deal to buy Beacon Roofing Supply.

US energy stocks are outperforming all other sectors in the S&P 500 despite weaker crude prices. They’ve been helped by lingering inflation anxiety, a supportive US
administration and intensifying geopolitical tensions.

European gauges are broadly lower, halting a four-day winning streak, on concern that tariffs could undercut the region’s economies. UK shares outperform ahead of the
BOE rate decision. UK wage growth held at 5.9%, its highest level in nine months, and employment rose, potentially reinforcing BOE caution over further rate cuts. The Stoxx Europe 600 Index reversed small early gains to trade lower, with investors taking profits
on top-performing sectors including defense, banks and industrials. Sentiment was hit by comments from ECB President Christine Lagarde, who said that US tariffs could hit growth in the region and couldn’t make firm commitments on interest rates. French food
services firm Sodexo fell 20% after cutting its full-year forecast due to slower growth in the US. Germany’s RWE AG dropped as much as 4.6% after the company said that it plans to cut €10 billion ($10.9 billion) from its green technology spending.  Stoxx 600
-0.6%, DAX -1.4%, CAC -1%, FTSE 100 -0.1%.  Aero & Defense -2.8%, Banks -2.2%, Autos -1.9%. Real Estate +0.7%, Retail +0.7%.

Shares in Asia were mixed as investors sold Chinese shares, offsetting optimism elsewhere after the Federal Reserve signaled there’s still room to ease policy later
this year. The MSCI Asia Pacific ex-Japan Index was little changed, while Japanese markets were shut for a holiday. Chinese shares listed in Hong Kong posted its biggest drop in three weeks, with some attributing losses to profit taking and waning earnings
catalysts. Nvidia’s suppliers including TSMC gained after the FT reported CEO Jensen Huang said the firm aims to spend several hundred billion dollars to acquire US-made chips and electronics over the next four years. Taiwan +1.9%, Sensex +1.2%, ASX 200 +1.2%,
Indonesia +1.1%, Singapore +0.6%, Kospi +0.3%, Philippines +0.2%. Vietnam -0.05%, Thailand -0.7%, CSI 300 -0.9%, Hang Seng Index -2.2%, Hang Seng Tech -3.4%.

FIXED INCOME: 
 

Treasuries have added to their post-Fed gains, with US 10-year yields falling another ~3 bps to 4.20%:  2s10s spread +1bp. Investors continue to digest Wednesday’s
Fed meeting, where Chair Powell said the inflationary impact of tariffs is likely to be transitory. Trump urged the Fed to cut rates as his administration prepares to unveil new tariffs on April 2. US session features weekly jobless claims data and a 10-year
TIPS reopening.

 

METALS: 

Gold prices eased after touching another record high earlier in the session, driven by the Federal Reserve’s indication of likely interest rate cuts later this year.
Doubts are creeping in about the Federal Reserve’s ability to significantly cut interest rates this year in the face of potentially inflationary trade tariffs. Also, the US dollar strengthened, which is a headwind for gold. State-run Chinese Securities Journal
warned that investors should be careful on gold as prices are likely to be volatile going forward.  Copper rose as US buyers rush to import the metal ahead of potential tariffs. Spot gold -0.4%, Silver -1.3%, Copper +0.4%.

 

 

 

ENERGY:   

 

Oil prices steadied as renewed tensions in the Middle East countered strength in the dollar. Global risk premiums rose after Israel launched a new ground operation
on Wednesday in Gaza and the US kept up airstrikes on Houthi targets in Yemen. The White House is weighing a plan to extend Chevron’s license to pump oil in Venezuela and impose tariffs or financial penalties on other countries that do business with them.
US imports of Canadian crude tumbled to 3.13 million barrels a day last week, the lowest since March 2023 as producers exhaust local stockpiles. Energy Secretary Chris Wright said that current prices support refilling of the US strategic reserve.  WTI +0.3%,
Brent +0.3%, US Nat Gas -3%, RBOB -0.1%.   

 

CURRENCIES: 

In currency markets, the dollar rose for a second day while the euro retreated further from five-month highs hit recently in response to Germany’s plan to boost spending.
Sterling slipped ahead of the BOE rate decision, with the latest data showing showed that UK wage growth held at its highest level in nine months and employment rose. The Swedish krona fell: Sweden’s central bank kept its benchmark rate unchanged at a two-year
low and reiterated it’s finished with the easing cycle. The Swiss franc weakened after the SNB cut its rate to the lowest since September 2022.  Aussie$ slides after Australian employment surprisingly dropped in February, boosting bets on a near-term rate
cut.  The Turkish lira pared declines after the central bank said it would start lira-settled forward currency sales to avoid potential exchange-rate swings and balance liquidity in the market. The lira traded 0.3% lower versus the dollar after plunging as
much as 11% in Wednesday’s chaotic trading session.  US$ Index +0.45%, GBPUSD -0.4%, EURUSD -0.5%, USDJPY -0.1%, AUDUSD -1.1%, NZDUSD -1.3%, USDCHF +0.5%, USDCAD +0.4%, USDSEK +0.8%.

 

 

Bitcoin +0.1%, Ethereum -2.1%.

 

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
    • ACV Auctions (ACVA) Raised to Overweight at Piper Sandler; PT $20
    • Boston Beer (SAM) Raised to Buy at Citi; PT $280
    • Carvana (CVNA) Raised to Overweight at Piper Sandler; PT $225
    • Cava Group (CAVA) Raised to Overweight at JPMorgan; PT $110
    • Coty (COTY) Raised to Buy at Citi; PT $8
    • Couche-Tard (ATD CN) Raised to Buy at Veritas Investment Research Co
    • Equifax (EFX) Raised to Outperform at RBC; PT $300
    • Freeport (FCX) Raised to Overweight at JPMorgan; PT $52
    • GDS Holdings (GDS) ADRs Raised to Strong Buy at Raymond James
    • KKR & Co. (KKR) Raised to Overweight at Wells Fargo; PT $141
    • Mosaic (MOS) Raised to Outperform at Oppenheimer; PT $33
    • One Stop Systems (OSS) Raised to Buy at Lake Street; PT $3.50
    • Royal Caribbean (RCL) Raised to Buy at CFRA; PT $297
    • Southwest Air (LUV) Raised to Hold at Melius; PT $34
      • Raised to Neutral at UBS; PT $36
    • Spire (SR) Raised to Overweight at JPMorgan; PT $85
  • Downgrades
    • Bloom Energy (BE) Cut to Sell at Pekao Investment Banking; PT $19.70
    • BRP Inc. (DOO CN) Cut to Sell at Citi; PT C$41
    • Constellation Brands (STZ) Cut to Neutral at Citi; PT $200
    • KE Holdings (2423 HK) ADRs Cut to Neutral at UBS; PT $24.50
    • Lundin Gold (LUG CN) Cut to Neutral at CIBC; PT C$44
    • Malibu Boats (MBUU) Cut to Sector Weight at KeyBanc
    • Open Lending (LPRO) Cut to Hold at Jefferies; PT $3.70
    • Polaris (PII) Cut to Sell at Citi
    • Rivian (RIVN) Cut to Neutral at Piper Sandler; PT $13
    • Stellantis (STLA) Cut to Neutral at Piper Sandler; PT $13
    • Thor Industries (THO) Cut to Underweight at KeyBanc; PT $65
    • ZTO Express (ZTO) ADRs Cut to Neutral at JPMorgan; PT $23
  • Initiations
    • Affirm Holdings (AFRM) Reinstated Outperform at BMO; PT $69
    • Amentum Holdings (AMTM) Rated New Neutral at Goldman; PT $21
    • ArriVent Biopharma (AVBP) Rated New Buy at B Riley; PT $37
    • Celldex (CLDX) Rated New Overweight at Morgan Stanley; PT $46
    • HubSpot (HUBS) Rated New Market Perform at Bernstein
    • International Paper (IP) Rated New Overweight at JPMorgan; PT $59
    • InvenTrust Properties (IVT) Rated New Peerperform at Wolfe
    • Lam Research (LRCX) Reinstated Outperform at Oppenheimer; PT $95
    • Microsoft (MSFT) Rated New Sector Outperform at Scotiabank
    • Orchestra BioMed (OBIO) Rated New Buy at BTIG; PT $12
    • Titan International (TWI) Rated New Overweight at Cantor; PT $11
    • Zenas Biopharma (ZBIO) Rated New Outperform at Wedbush; PT $35

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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