Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Feb Trade Balance, Initial Jobless Claims; 9:45ET S&P Global US Services PMI, Composite
PMI; 10:00ET ISM Services; 12:30ET Fed’s Jefferson speaks; 2:30ET Fed’s Cook speaks

Highlights and News:  

• Trump raises U.S. import taxes to highest in a century – EU, China Vow to Retaliate
  
• GERMANY AND FRANCE PUSH FOR A MORE AGGRESSIVE TARIFF RESPONSE
• PUTIN SAID TO SEE TRUMP AS ABLE TO DELIVER UKRAINE CONCESSIONS
• TIKTOK FACES FINE OVER €500 MILLION FOR EU DATA SENT TO CHINA
• VANCE: MUSK WILL CONTINUE TO BE AN ADVISER
  
• FITCH DOWNGRADES CHINA TO ‘A’; OUTLOOK STABLE
• NYC Mayor Adams plans to run for reelection as an independent, opting out of the Democratic primary
• OPEC+ agreed to make larger than expected supply hikes in May
• The weighted-average US tariff rate has jumped to 29%, higher than during 1930s Great Depression

Global stock markets were rattled after President Trump imposed the steepest American tariffs in a century, sparking threats of retaliation. Trump imposed baseline
10% tariffs on all exporters to the US, with higher duties on some 60 nations, to counter large trade imbalances with the US. The baseline charge on everyone takes effect after midnight Saturday, while the new tariffs go into effect on April 9.  For now, the
new measures don’t include Canada and Mexico, which are engaged in a separate on-and-off tariff dispute with the US. China and the EU both said they were preparing to take countermeasures in response. Singapore says it’s disappointed at the move but won’t
immediately retaliate, instead seeking engagement with the White House. Prime Minister Albanese said the 10% tariff on Australian goods was a “poor decision,” but added he would not respond with reciprocal levies. The UK is also refraining from firing back
and the government says it will continue to pursue a US trade deal.   

EQUITIES:  

US equity futures tumbled as global financial markets were hit by a sweeping selloff after Trump’s announcement proved more aggressive than expected, with US equity futures slumping as
much as 4%. Analysts at JPMorgan said the tariffs were, “significantly higher than the realistic worst-case scenario.” Fitch warned they were a “game-changer” for both the US and global economy, while Deutsche Bank called them a “once-in-a-lifetime” event
that could easily knock between 1%-1.5% off US growth this year. MUFJ Morgan Stanley expects the policy will probably be revised after Trump extracts as many concessions as possible from the US’s trading partners. Apple’s market capitalization dropped by more
than $240 billion as its shares slid 7% in after-hours trade on Wednesday. Microsoft has scaled back its data center initiatives globally, indicating that the company is reevaluating its strategy for constructing server farms that support artificial intelligence
and cloud computing. Meanwhile, Treasury Secretary Bessent indicated that the federal government is at risk of running out of room to make good on all of its payment obligations on time as soon as May or June.

Futures ahead of the bell: E-Mini S&P -3.3%, Nasdaq -3.9%, Russell 2000 -4.9%, DJI -2.9%.

In pre-market trading, Apple (AAPL -7%) is the biggest laggard among the Magnificent Seven stocks as Trump imposed the steepest American tariffs in a century. The iPhone
maker is one of the firms most exposed to tariff risk given China is a key manufacturing hub. Amazon (AMZN) -6%, Nvidia (NVDA) -5.6%, Tesla (TSLA) -5.8%, Meta (META) -5%, Alphabet (GOOGL) -3.2%, Microsoft (MSFT) -2.6%. Broadcom (AVGO) -6.1%, Micron (MU) -6.8%,
Dell (DELL) -8.9%, HP Inc. (HPQ) -7.3%. Automakers: General Motors (GM) -2.3%, Ford (F) -2.0%, Rivian (RIVN) -4.5%, Lucid (LCID) -4.6%. Financials: JPMorgan (JPM) -3.7%, Bank of America (BAC) -4.1%, Wells Fargo (WFC) -4.1%, Morgan Stanley (MS) -5.6%, Goldman
Sachs (GS) -4.7%, Citigroup (C) -4.7%. Consumer: Walmart (WMT) -5.4%, Target (TGT) 8.3% , Nike (NKE) -11%, Skechers (SKX) -11%, Deckers Outdoor (DECK) -14%, On Holding (ONON) -18%, JetBlue (JBLU) -4.6%, Carnival (CCL) -7.3%, DraftKings (DKNG) -5.6%.

European gauges slide as the EU bloc now faces a 20% reciprocal levy. The EU is considering using its anti-coercion instrument to strike back against the US, with France
saying responses could be ready by the end of April. The Stoxx 600 falls over 2% to the lowest since the end of January, with basic resources, energy and banks the worst hit sectors. Swiss inflation held at a four-year low, with consumer prices rising 0.3%
in March from a year earlier.  Stoxx 600 -2.05%, DAX -2%, CAC -2.7%, FTSE 100 -1.4%. Basic resources -4.6%, Energy -4.4%, Banks -3.7%. Utilities +2.6%, Real Estate +2.2%.

Shares in Asia declined as concerns over Trump’s wide-ranging reciprocal tariffs reverberated through the region. The MSCI Asia Pacific Index slumped 1.1%, to its lowest
level since early February. Consumer discretionary and financials were the worst-performing sectors, while equities in Vietnam slumping nearly 7% after seeing a 46% tariff. Others in Asia hit with reciprocal tariffs include Japan at 24%, South Korea at 25%,
India at 26% and Taiwan at 32%. Exporters led declines in Japan as the Topix slid over 3%. China outperformed most regional peers amid bets that authorities will take more steps to shield the economy. Shares of companies with factories in Vietnam, such as
Apple and Nike suppliers, rank among the hardest hit. Vietnam -6.7%, Topix -3.1%, Hang Seng Tech -2.1%, Philippines -1.6%, Hang Seng Index -1.5%, ASX 200 -0.9%, Thailand -0.9%, Kospi -0.8%, CSI 300 -0.6%, Sensex -0.4%, Singapore -0.3%, Shanghai Composite -0.2%.

FIXED INCOME: 
 

Treasuries pared some of their opening gap, leaving yields richer by 1bp-6bp across maturities led by front end and belly. Ten-year Treasury yields fell toward the
closely watched 4% level, their lowest since October.  US 10-year yield is near 4.06% is ~6bp richer on the day after dropping as low as 4.038%: 5s30s flatter by 4.5bps after reaching its steepest since January 2022. Morgan Stanley scrapped its call for a
June cut, however; new forecast is for rate cuts to resume in March 2026, with a terminal rate of 2.50-2.75%.

METALS: 

Gold slid after surging to yet another all-time high after Trump’s announcement of sweeping import tariffs drove investors to the safe-haven asset initially. The
White House has exempted metals including steel, aluminum, copper, gold, and others from “reciprocal” tariffs. Nevertheless, Silver tumbles nearly 5% after again bumping against key Fibonacci .618 retracement resistance. Spot gold -1.4%, Silver -4.6%, Copper
-3%.

ENERGY:   

Oil prices fell sharply as President Trump’s drastic US trade tariffs stirred widespread fears of a global recession. OPEC+ agreed to add 411,000 barrels a day to
the market next month, exceeding expectations and deepening the slump in oil prices. Oil traders are avoiding Chinese-built ships for US routes after Trump proposed hefty fees on them to revive American shipbuilding.  WTI -6.3%, Brent -5.9%, US Nat Gas +1.7%,
RBOB -6.7%. 

CURRENCIES: 

In currency markets, the dollar dropped over 2% while the Japanese yen, traditionally a haven, soared. Currency traders see a slowdown in the American economy as
a bigger threat — for now — than a resurgence in inflation. The euro rose more than 2%, set for its biggest daily jump since 2015. The Swedish krona is leading gains against the greenback. China held its currency relatively steady, containing the yuan’s drop
to about 0.4% despite total tariffs of above 50% on Chinese exports. The Aussie$ reversed losses to rise ~1% after Australia’s prime minister said he will not respond with reciprocal levies. US$ Index -2.1%, GBPUSD +1.3%, EURUSD +2.2%, USDJPY -2.2%, AUDUSD
+0.95%, NZDUSD +1.4%, USDCHF -2.5%, USDCAD -1.1%, USDSEK -2.5%, USDNOK -1%, USDMXN -0.5%. 

Bitcoin -3%, Ethereum -4.7%. Crypto fell due to rising global trade tensions, sparking a sell-off in riskier assets.

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 Overweight at Morgan Stanley; PT $67
• Eastman Chemical (EMN) Raised to Outperform at Mizuho Securities
• Fastenal (FAST) Raised to Peerperform at Wolfe
• Loar Holdings (LOAR) Raised to Overweight at Morgan Stanley; PT $91
• Pine Cliff Energy (PNE CN) Raised to Buy at Canaccord
• Ross Stores (ROST) Raised to Buy at Citi; PT $146
• TJX (TJX) Raised to Buy at Citi; PT $140
• U.S. Bancorp (USB) Raised to Outperform at Wolfe; PT $49
• Zscaler (ZS) Raised to Overweight at Cantor; PT $250
• Downgrades
• Apple (AAPL) Cut to Sell at Aletheia Capital; PT $175
• Hayward (HAYW) Cut to Peerperform at Wolfe
• Lululemon (LULU) Cut to Neutral at Sealand Securities
• Lyft (LYFT) Cut to Underperform at BofA
• Parker-Hannifin (PH) Cut to Peerperform at Wolfe
• ProAssurance (PRA) Cut to Market Perform at Citizens
• Sachem Capital (SACH) Cut to Neutral at Ladenburg Thalmann
• Sensata (ST) Cut to Inline at Evercore ISI; PT $27
• U.S. Bancorp (USB) Cut to Underweight at JPMorgan; PT $43.50
• WW Grainger (GWW) Cut to Underperform at Wolfe; PT $966
• Initiations
• Ascentage Pharma (6855 HK) ADRs Rated New Buy at SPDB Intl HK; PT $29
• Diversified Healthcare (DHC) Reinstated Buy at B Riley; PT $4.50
• Element Solutions (ESI) Rated New Overweight at KeyBanc; PT $29
• Equity Bancshares (EQBK) Rated New Neutral at Janney Montgomery; PT $42
• Global Medical REIT (GMRE) Reinstated Neutral at B Riley; PT $9
• Osisko Metals (OM CN) Rated New Outperform at National Bank; PT C$1.25
• Prairie Operating (PROP) Rated New Buy at Clear Street; PT $16
• Sandisk (SNDK) Rated New Positive at Susquehanna; PT $70
• Talkspace (TALK) Rated New Buy at Canaccord; PT $5
• Waste Connections (WCN CN) Rated New Outperform at William Blair

Data sources: Bloomberg, Reuters, CQG

David Wienke