Daily Game Plan

by Contributor
on April 7, 2025

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

TODAY’S ECONOMIC DATA:  10:30ET Fed’s Kugler speaks; 2:30ET Trump, Netanyahu hold press conference; 3:00ET US February
Consumer Credit

Highlights and News:  

  • XI URGES TO BOOST CONSUMPTION: CCTV
  • TRUMP REITERATES FED SHOULD CUT RATES, SAYS THERE IS NO INFLATION
  • Stock Selloff Moderates as Fed Cuts Priced In
  • China May Accelerate Economic Stimulus Plan
  • Jamie Dimon said tariff policy issues need to be resolved quickly
  • US-Russia talks toward a Ukraine ceasefire are expected as soon as this week

 

World stocks plunged as President Trump showed no sign of backing away from his sweeping tariff plans, telling reporters that investors would have to take their medicine,
and he would not do a deal with China until the US trade deficit was sorted out.  The carnage in financial markets worsened to start the week, taking the three-day wipeout in global equity value to about $9.5 trillion. The initial, across-the-board 10% tariff
took effect Saturday and the higher tariffs, including 34% for China, kick in this week. Trump also took aim at Europe, going so far as to say he wants not only parity in trade but reparations. EU countries will seek to present a united front in the coming
days against Trump’s tariffs, likely approving a first set of targeted countermeasures on up to $28 billion of US imports. Taiwan’s president on Sunday offered zero tariffs as the basis for talks, pledging to remove trade barriers and saying Taiwanese companies
will raise their US investments. An Indian government official said the country does not plan to retaliate against a 26% tariff and said talks were under way with the US over a possible deal. Italy’s PM pledged to shield businesses that suffered damage from
a planned 20% tariff.   

 

EQUITIES: 

US equity futures opened sharply lower as investors worried Trump’s tariffs might raise prices, curb demand, erode confidence, and risk a global recession. The selloff slowed down as
traders increased expectations for Federal Reserve rate cuts. Goldman cut its US growth forecast and pulled forward its call for the next Fed cut to June from July. JPMorgan expects a cut at every meeting from June through January. Trump told reporters on
Air Force One on Sunday to “forget markets for a second,” saying he’s not intentionally fueling a market selloff, but won’t claw back tariffs unless a deal eliminates the US trade deficit. Trump said he’d spoken with several unidentified world leaders, adding
“they’re dying to make a deal.” Administration officials report that over 50 countries have sought tariff agreements, but there’s frustratingly little structure or coordination around the negotiations.

Futures ahead of the bell: E-Mini S&P -2.2%, Nasdaq -2.4%, Russell 2000 -3%, DJI -2.3%.

In pre-market trading, Large and midcap banks fall as analysts at Morgan Stanley cut their view on the group with the rationale that Trump’s tariff policy increases
the risk of recession and threatens to prolong any material resurgence in capital markets activity. JPMorgan Chase (JPM) -4%, Goldman Sachs (GS) -5%, Bank of America (BAC) -3%, First Horizon (FHN) -4%, East West Bancorp (EWBC) -2%. Technology stocks are notable
decliners amid concern that Trump’s trade war will push the world’s largest economy into recession. Chip stocks: Intel (INTC) -4%, Advanced Micro (AMD) Devices -4%, Broadcom (AVGO) -3% Software stocks: Atlassian (TEAM) -6%, Palo Alto Networks (PANW) -5%, Palantir
(PLTR) -8%. Strategy (MSTR) falls 10% after saying it may not able to regain profitability in future periods, and significant decrease in the market value of its Bitcoin holdings could adversely affect ability to satisfy financial obligations and could cause
default.

The VIX is now at its highest level since March 2020 against its second-month futures, a sign of capitulation, BTIG’s Jonathan Krinsky said.

Was this the ‘tell’?

European gauges slid to a 16-month low as investors grappled with the possibility of a recession after Trump showed no signs of letting up in his aggressive trade war.
Europe’s Stoxx 600 Index plunged to the lowest since December 2023 and Germany’s DAX briefly sank 10% before recovering some of its losses.  The selloff was led by defense stocks, with all 20 sectors in the Stoxx 600 falling. Strategists are increasingly recommending
investors avoid economically sensitive shares such as energy and instead favor loading up on defensive sectors such as telecommunications and utilities. Investors will be monitoring the European Union’s response to Trump’s tariff announcements as the week
kicks off. Finance ministers from Italy and Spain cautioned against too aggressive a response, while their counterpart in France said the bloc’s response could include regulating the use of data by American big tech groups. Stoxx 600 -5.1%, DAX -4.9%, CAC
-5.3%, FTSE 100 -4.6%.  Financial Services -5.9%, Technology -5.8%, Aero & Defense -5.7%, Energy -5.4%, Utilities -5.4%.

Shares in Asia plummeted, with the MSCI Asia Pacific Index falling 8.4%, the most since the height of the global financial crisis in 2008.  The Hang Seng Index plunged
more than 13%, its biggest selloff since 1997.  All markets in the region were solidly in the red, with some indices experiencing their largest declines on record. China’s blue-chip CSI 300 settled lower by more than 7%, finding a floor only when state media
reported China’s sovereign fund Central Huijin was a buyer. China’s policymakers discussed strategies over the weekend to support the economy and stabilize markets, including whether to speed up the rollout of stimulus measures to boost consumption. Taiwan’s
tech-heavy equity benchmark slid by the most on record, to enter a bear market as trading resumed after a holiday. Markets were closed for holidays in Indonesia, Thailand and Vietnam. Hang Seng Tech -17.2%, Hang Seng Index -13.2%, Taiwan -9.7%, Topix -7.9%,
Singapore -7.5%, CSI 300 -7%, Kospi -5.6%, Philippines -4.3%, ASX 200 -4.2%, Sensex -2.95%.

FIXED INCOME: 
 

Treasury yields are off session lows in early US trading with the curve still notably steeper as front-end yields hold declines while long end has flipped to cheaper
on the day.  Traders boosted their expectations for Federal Reserve interest rate cuts this year, pricing in the equivalent to five quarter-point moves. Markets swung to imply around a 54% chance the Fed could cut interest rates as soon as May, even though
Chair Jerome Powell on Friday said the central bank was in no hurry. US 10-year yield at about 4.02% is about 2bp higher after tumbling as much as 12.5bps. 2s10s curve +4bps.  Treasury auctions resume Tuesday with $58 billion 3-year notes, followed by $30
billion 10-year and $22 billion 30-year reopenings Wednesday and Thursday.

 

METALS: 

Gold prices held steady, bolstered by strong central bank demand and the potential for an early U.S. Federal Reserve rate cut, but gains were capped as some investors
sold bullion to cover losses in other trades. China increased its gold reserves in March for the fifth month in a row amid rising global trade tensions. Spot gold -0.4%, Silver +1.8%, Copper -4%.

 

 

 

ENERGY:   

 

The bleaker outlook for global growth kept oil prices under heavy pressure, following steep losses last week. Oil tanked for a third straight day. Saudi Arabia slashed
its flagship crude price by the most in more than two years, while Goldman Sachs cut oil forecasts for the second time in less than a week as the escalating trade war spurred concerns about a global recession. WTI -2.8%, Brent -2.5%, US Nat Gas +1.1%, RBOB
-1.5%. 

 

 

CURRENCIES: 

In currency markets, the dollar reversed most of its earlier losses, as the yen and Swiss franc outperform their Group-of-10 peers.  While much larger-than-average
volumes went through during the Asia session, the European session has been more muted.  AUD/USD tumbles as much as 1.8% to the lowest since March 2020, before clawing back most of the losses. US$ Index -0.05%, GBPUSD -0.6%, EURUSD -0.02%, USDJPY -0.3%, AUDUSD
-0.2%, NZDUSD -0.3%, USDCHF -0.6%, USDCAD +0.5%, USDSEK +0.9%, USDNOK +1.3%, USDMXN +1.5%.   

 

 

Bitcoin -2.7%, Ethereum -5.7%. 

 

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
    • Acadian Asset Management (AAMI) US Raised to Equal-Weight at Morgan Stanley; PT $26
    • Ameriprise (AMP) Raised to Strong Buy at Raymond James; PT $518
    • Amylyx Pharmaceuticals (AMLX) Raised to Outperform at Mizuho Securities
    • Apollo Commercial (ARI) Raised to Outperform at KBW; PT $10
    • Bank of America (BAC) Raised to Overweight at Morgan Stanley; PT $47
    • Commerce Bancshares (CBSH) Raised to Equal-Weight at Morgan Stanley
    • Cousins Properties (CUZ) Raised to Outperform at Wolfe; PT $31
    • Diamondback (FANG) Raised to Buy at Citi; PT $180
    • Diodes (DIOD) Raised to Outperform at Baird; PT $50
    • Dollar General (DG) Raised to Neutral at Citi; PT $101
    • Dollar Tree (DLTR) Raised to Buy at Citi
    • Fifth Third (FITB) Raised to Outperform at Baird; PT $47
    • First Horizon (FHN) Raised to Outperform at Baird; PT $22
    • Five Below (FIVE) Raised to Neutral at JPMorgan; PT $57
    • JetBlue (JBLU) Raised to Outperform at Raymond James; PT $5
    • KeyCorp (KEY) Raised to Outperform at Baird; PT $18
    • Mettler-Toledo (MTD) Raised to Buy at Citi; PT $1,400
    • ONE Gas (OGS) Raised to Buy at Jefferies; PT $84
    • Roku (ROKU) Raised to Buy at Redburn; PT $100
    • Saia (SAIA) Raised to Outperform at BMO; PT $455
    • Scotts Miracle-Gro (SMG) Raised to Buy at Jefferies; PT $69
    • Superior Plus (SPB CN) Raised to Sector Outperform at Scotiabank
    • Texas Instruments (TXN) Raised to Outperform at Baird; PT $175
    • UWM Holdings (UWMC) Raised to Overweight at Morgan Stanley
  • Downgrades
    • AdvanSix (ASIX) Cut to Neutral at Piper Sandler; PT $26
    • Alaska Air (ALK) Cut to Neutral at UBS
    • Babcock & Wilcox (BW) Cut to Neutral at DA Davidson; PT $1
    • Bread Financial Holdings (BFH) Cut to Underweight at Morgan Stanley
    • California Resources (CRC) Cut to Neutral at Citi; PT $36
    • Caterpillar (CAT) Cut to Sell at UBS; PT $243
    • Comerica (CMA) Cut to Underweight at Morgan Stanley; PT $55
    • Cummins (CMI) Cut to Sell at UBS; PT $240
    • Delta Air Lines (DAL) Cut to Neutral at UBS; PT $42
    • East West Bancorp (EWBC) Cut to Equal-Weight at Morgan Stanley; PT $90
    • EastGroup (EGP) Cut to Neutral at Piper Sandler; PT $175
    • Eaton Corp (ETN) Cut to Neutral at President Capital Management
    • Fox Corp (FOXA) Cut to Underperform at Wolfe; PT $48
    • General Motors (GM) Cut to Underperform at Bernstein; PT $35
    • Goldman Sachs (GS) Cut to Equal-Weight at Morgan Stanley; PT $558
    • KKR Real Estate Finance (KREF) Cut to Market Perform at KBW; PT $10.75
    • Martin Marietta (MLM) Cut to Neutral at UBS
    • Methanex (MX CN) Cut to Neutral at Piper Sandler; PT $36
    • Navitas Semiconductor (NVTS) Cut to Underweight at Morgan Stanley
    • Northern Trust (NTRS) Cut to Underweight at Morgan Stanley; PT $95
    • Paccar (PCAR) Cut to Sell at UBS; PT $78
    • Pinterest (PINS) Cut to Market Perform at Raymond James
    • Portillo’s (PTLO) Cut to Neutral at Baird; PT $12
    • Prologis (PLD) Cut to Sector Underperform at Scotiabank
    • Q2 Holdings (QTWO) Cut to Neutral at Compass Point; PT $60
    • Starbucks (SBUX) Cut to Neutral at Baird; PT $85
    • Synchrony Financial (SYF) Cut to Equal-Weight at Morgan Stanley
    • Terex (TEX) Cut to Sell at UBS; PT $32
    • Terreno Realty (TRNO) Cut to Neutral at Piper Sandler; PT $61
    • Udemy (UDMY) Cut to Hold at Truist Secs
    • United Airlines (UAL) Cut to Neutral at UBS; PT $59
    • United Rentals (URI) Cut to Sell at UBS; PT $485
    • Vertiv Holdings (VRT) Cut to Neutral at President Capital Management
    • VF Corp (VFC) Cut to Neutral at Citi; PT $12
    • Vulcan Materials (VMC) Cut to Neutral at UBS
  • Initiations
    • Alibaba (BABA) ADRs Reinstated Outperform at Haitong Intl; PT $165
    • Axsome Therapeutics (AXSM) Reinstated Buy at Jefferies; PT $200
    • BeiGene (ONC) ADRs Rated New Outperform at RBC; PT $312
    • Cipher Pharmaceuticals (CPH CN) Rated New Hold at Canaccord; PT C$12.50
    • Ionis Pharma (IONS) Rated New Buy at HC Wainwright; PT $45
    • Netstreit (NTST) Reinstated Overweight at Wells Fargo; PT $18
    • Reddit (RDDT) Rated New Buy at Truist Secs; PT $150
    • Semtech (SMTC) Rated New Equal-Weight at Morgan Stanley; PT $30

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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