Daily Game Plan

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

DATA/HEADLINES   8:30ET Building Permits, Housing Starts; 12:00ET Fed’s Waller speaks; 12:30ET Fed’s Williams speaks;
1:00ET Fed’s Bowman and Barkin speak; 2:00ET Fed’s Beige Book; 3:15ET Fed’s Harker speaks

TODAY’S HIGHLIGHTS:  

• Biden’s summit with Arab leaders was cancelled
• Biden says hospital blast in Gaza ‘appears as though it was done by the other team’ and not Israel
• The US and European Union designate Hamas a terrorist organization
  
• Airports in France cleared as country lifts national threat alert to highest level
  

Global shares are on the defensive as caution prevailed with Israel and Palestinian authorities trading blame for an explosion at a hospital in Gaza that killed hundreds
of people. President Biden arrived in Israel with a commitment to demonstrate the United States’ support for the Jewish community worldwide. He also provided an evaluation suggesting that the tragic explosion at a hospital in the Gaza Strip seemed to have
been perpetrated by a group distinct from the Israeli military.  Outrage over the incident led to the cancellation of a planned summit between Biden and Arab leaders. The reaction undermined hopes for a diplomatic solution and highlighted the risk of a full-blown
regional conflict. Meanwhile, Israel continues to strike Hamas operational command centers and military infrastructure, the IDF said.              

EQUITIES: 

US equity futures decline as investors await speeches from a slew of Fed officials. Meanwhile, Nvidia extended losses alongside other semiconductor makers after the US tightened curbs
on AI chip technology exports to China, though there could be a lifeline in the rules. Goldman said any rally in risk assets, particularly stocks, into the year-end could be “smaller and short-lived” due to the geopolitical risks. In political news, the US
House will vote again at 11:00ET for a new speaker.                

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.6%, Russell 2000 -0.6%, Dow -0.2%.

In pre-market trading, Nvidia fell over 1% after its worst decline in two months on tougher US rules on chips to China. Morgan Stanley slid ~3% after third-quarter earnings missed amid
sluggish results from the firm’s investment bank and a miss in wealth management. Interactive Brokers (IBKR) fell 3% after the company tempered its guidance for accounts growth. Editas Medicine (EDIT) shares rise 3% after JPMorgan upgraded the clinical-stage
biotechnology company to neutral from underweight.  Terawulf (WULF) gained as much as 4% after Stifel Canada initiates coverage on the Bitcoin miner with a buy recommendation. Viking Therapeutics (VKTX) rose as much as 17% after announcing new results from
the company’s Phase 1 trial for its weight loss candidate VK2735.  Ardelyx (ARDX) climbs as much as 25% after the drugmaker said its drug for the control of serum phosphate in adult patients with chronic kidney disease was approved by the FDA. Shares of US
carriers that suspended flights to Tel Aviv due to the Israel-Hamas conflict fall, after United Airlines flagged a sharp profit decline should flights on the route remain grounded until year-end. United Airlines fell 5.7%.

European gauges fell, weighed down by disappointing results from ASML Holding NV and Swiss industrial conglomerate ABB. UK inflation failed to slow as forecast in September as rising
oil prices offset downward pressures from food costs. CPI rose 6.7% from a year earlier, the same pace as the previous month. The Stoxx Europe 600 is near lows on the day, with technology shares leading losses. Chip equipment firm ASML Holding dropped as much
as 5% before paring losses, after orders plunged 42% and revenue missed for the first time in seven quarters. Adidas rose ~4% after it boosted guidance for a second time in three months. Volvo got a boost from strong truck orders but expects weaker demand
in North America and Europe in 2024.  Stoxx 600 -0.6%, DAX -0.5%, CAC -0.5%, FTSE 100 -0.6%. Technology -1.6%, Basic Resources -1.5%, Construction -1.3%. Energy +0.6%, Telecom +0.5%.

Shares in Asia were mostly lower as concerns over the Middle East conflict and China’s property sector stress weighed. The MSCI Asia Pacific Index declined as much as 0.5% before paring
losses to 0.2% as investors assessed exposure to geopolitical risks should the Israel-Hamas war spread. Chinese stocks closed lower, despite better-than-expected GDP growth in third quarter, as property investment and home sales data underwhelmed.  China GDP
came in at 4.9% versus 4.5% expected. The CSI 300 Index declined 0.8%, closing at its lowest level in a year.  Chinese property stocks sank to their lowest level in 14 years, as Country Garden said that it was unlikely to make interest payment on its offshore
debt. Asian stocks related to AI chips fell after the Biden administration stepped up its efforts to block China’s access to advanced semiconductor technology. Vietnam -1.6%, Taiwan -1.2%, Sensex -0.8%, CSI 300 -0.8%, Hang Seng Index -0.2%. ASX 200 +0.3%,
Topix +0.15%, Kospi +0.1%.   

FIXED INCOME: 
 

Treasuries curve steepens with long-end continuing Tuesday’s selloff while front-end and belly recover some ground. US yields cheaper by up to 2bp across long-end
of the curve while 2-year yields are richer by 3.5bp on the day; steepening move pushes 2s10s, 5s30s spreads wider by as much as 2.5bp and 5bp. 10 year yield around 4.8%; 2 year yield ~5.2%. Gilts underperform across core European rates, as money markets raise
BOE policy-tightening premium after UK inflation exceeded estimates. The BOJ announced an unscheduled bond-purchase operation after benchmark yields touched a fresh decade high. US session focus includes a 20-year bond auction and six scheduled Fed speakers.
               

METALS: 
   

Gold jumped to the highest level in four weeks as the intensifying conflict in the Middle East bolstered haven demand, with hopes for a diplomatic resolution deteriorating after a deadly
explosion in Gaza Biden’s visit to Israel and Jordan scheduled for Wednesday began to unravel even before he left the ground, after the explosion
at a Gaza hospital left hundreds dead and Arab leaders pulled out of a meeting planned for the trip. Biden has already sent two aircraft carriers to the region and put troops on alert to send a message of deterrence to Iran and its ally Hezbollah, whose thousands
of missiles could pose a severe threat to Israel
The threat of escalation continues to provide support for bullion, which has gained about 6% since Hamas’s surprise attack on Israel. Spot gold +1.3%, silver +2.1%.

ENERGY:  

Oil prices rose after Iran called for an oil embargo against Israel over its air strikes on Gaza, sparking concerns about potential oil supply disruptions from the
region. Middle Eastern energy producers, including Saudi Arabia and the UAE criticized Israel for its strikes on Gaza, although they have not talked of halting sales to any of its allies. Most of Israel’s crude comes from producing countries in West Africa
or the Mediterranean. On the demand side, China’s economy grew faster-than- expected in the third quarter and the country’s oil refinery throughput in September hit a record daily rate, up 12% from a year earlier. Venezuela’s government and its political opposition
agreed to electoral guarantees for 2024 presidential elections, paving the way for possible US sanctions relief. WTI +2.5%, Brent +2.2%, US Nat Gas +0.6%, RBOB +1.3%.       

CURRENCIES:   

Currency markets are relatively quiet.  The dollar slipped against most G-10 currencies after better-than-expected Chinese economic data allayed concerns about the
outlook for the world’s No. 2 economy and perked up demand for the Australian dollar. The Aussie rose against all its Group-of-10 peers as figures on China’s economic growth, retail sales and industrial output all exceeded economists’ forecasts. Sterling rose
after data showing a pick-up in UK inflation bolstered the view that the interest rates in the country may rise further early next year. US $Index -0.02%, GBPUSD +0.05%, EURUSD -0.15%, USDJPY -0.1%, AUDUSD +0.1%, USDNOK +0.15%, USDCHF -0.1%.              

Bitcoin -0.2%, Ethereum +1.4%.   

TECHNICAL LEVELS: 

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
• (BNL) Broadstone Net Lease Raised to Outperform at Wolfe; PT $17
• (EAT) Brinker Raised to Strong Buy at Raymond James
• (EDIT) Editas Raised to Neutral at JPMorgan; PT $8
• (ESTC) Elastic Raised to Buy at Jefferies; PT $100
• (FBK) FB Financial Raised to Outperform at Hovde Group; PT $35.50
• (FDMT) 4D Molecular Raised to Outperform at Leerink; PT $24
• (FWRG) First Watch Restaurant Raised to Strong Buy at Raymond James
• (HPP) Hudson Pacific Raised to Neutral at Mizuho Securities; PT $7
• (NKTX) Nkarta Raised to Strong Buy at Raymond James; PT $13
• (ZBH) Zimmer Biomet Raised to Hold at CFRA; PT $117(Earlier)
• Downgrades
• (AU) Anglogold Ashanti Cut to Equal-Weight at Morgan Stanley
• (CNC CN) Canada Nickel Cut to Speculative Buy at Echelon Wealth
• (DRRD IN) Dr Reddy’s ADRs Cut to Hold at HSBC; PT $75.55
• (EVLO) Evelo Biosciences Cut to Market Perform at Cowen
• (LAC CN) Lithium Americas Cut to Hold at Deutsche Bank
• (LCID) Lucid Cut to Sell at CFRA; PT $4
• (LPG) Dorian LPG Cut to Hold at Fearnley; PT $34
• (OLK) Olink Holding ADRs Cut to Market Perform at Leerink; PT $26
• (REAL CN) Real Matters Cut to Sector Perform at National Bank; PT C$7
• (SQM/B CI) SQM ADRs Cut to Underperform at BofA; PT $59
• (SSW SJ) Sibanye Stillwater ADRs Cut to Underperform at BofA
• (SSW SJ) ADRs Cut to Sector Perform at RBC; PT $6.50
• (THX CN) Thor Explorations Cut to Speculative Buy at Echelon Wealth
• Initiations
• (AAPL) Apple Rated New Neutral at Haitong Intl; PT $186
• (ALPN) Alpine Immune Rated New Buy at Berenberg; PT $18
• (ARM) ARM Holdings PLC ADRs Rated New Hold at Intesa Sanpaolo
• (ARM) ADRs Rated New Overweight at KeyBanc; PT $65
• (CPRT) Copart Rated New Underperform at Baptista Research; PT $39.10
• (CRWD) CrowdStrike Rated New Buy at DZ Bank; PT $215
• (DHT/U CN) DRI Healthcare Trust Rated New Buy at Bloom Burton & Co
• (ET) Energy Transfer Rated New Outperform at Baptista Research
• (EXPE) Expedia Rated New Buy at Baptista Research; PT $128.70
• (FTNT) Fortinet Rated New Hold at DZ Bank; PT $58
• (KLG) WK Kellogg Rated New Market Perform at Cowen; PT $11
• (NTBL) Notable Labs Inc Rated New Market Outperform at JMP; PT $13
• (NU) Nubank Rated New Buy at Redburn; PT $11
• (PANW) Palo Alto Networks Rated New Buy at DZ Bank; PT $310
• (PINS) Pinterest Rated New Hold at Jefferies; PT $30
• (SPGI) S&P Global Rated New Hold at Baptista Research; PT $402.90
• (VIGL) Vigil Neuroscience Rated New Market Outperform at JMP; PT $23
• (VSTS) Vestis Rated New Buy at Stifel; PT $20
• (WULF) Terawulf Rated New Speculative Buy at Stifel Canada; PT $3

Data sources: Bloomberg, Reuters, CQG