Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET EMPLOYMENT REPORT; 10:00ET Factory Orders, Durable Goods, Cap Goods

Highlights and News:  

• China says ‘door is open’ to trade talks with the US
• Trump releasing 2026 budget today: Budget Seeks 23% Domestic Spending Cut, 13% Defense Hike
• Trump will request a record $1.01 trillion in national security spending for the fiscal year
• IDF reports missiles launched from Yemen toward Israel
• Trump Says Will Take Away Harvard’s Tax Exempt Status

Global stocks rally after China said it is assessing the possibility of trade talks with the US, the first sign that negotiations could begin between the two sides
since Trump hiked tariffs last month. China’s Commerce Ministry said today that it is “evaluating” the possibility of trade talks with the White House, after senior US officials repeatedly expressed an openness to talk about tariffs. Japan’s Finance Minister
Kato said that Japan could use its US Treasury holdings as a negotiating card for trade talks with the US. Euro-area inflation held steady in April but the core number came in at 2.7%, far more than analysts had predicted. Manufacturing activity across most
of Asia contracted in April, with companies struggling with weaker demand and pausing new orders in the face of tariffs. India was an outlier, showing an expansion in activity.

EQUITIES: 

 US equity futures climb although upside has been limited by weakness in the technology sector as Apple and Amazon.com shares fell in post-market after their respective updates appeared
to underwhelm investors. Apple added to fears about levies, warning its costs will jump by $900 million this quarter. Amazon cut its operating profit projections, saying it expects to be “materially affected” by tariffs. The S&P 500 is on track for a ninth
day of gains, its longest winning streak since 2004, after China hinted at the possibility of trade talks. Early focus will be on today’s April jobs report which is expected to show hiring slowed to start the second quarter while unemployment held flat. Investors
are now betting on a more market-friendly stance from President Trump in the coming months, and fears about a US recession could diminish further if the jobs report shows resilience, according to Bank of America’s Michael Hartnett.  

Futures ahead of the bell/data: E-Mini S&P +0.4%, Nasdaq +0.3%, Russell 2000 +0.8%, DJI +0.5%.

In pre-market trading, Apple (AAPL) falls 3% after the iPhone maker reported China sales that were disappointing and warned about the impact of tariffs. Amazon.com
Inc. (AMZN) slips 0.5% after the e-commerce company gave a weaker-than-expected outlook for operating income as tariff uncertainties weigh. Airbnb (ABNB) falls 5% after issuing a weak outlook for the second quarter. Ardelyx (ARDX) drops 17% after the biotech
firm’s first-quarter revenue missed estimates, Atlassian (TEAM) sinks 17% after the software company gave an outlook that analysts are cautious about. Block (XYZ) sinks 21% after the financial services and digital payments company cut its adjusted operating
income guidance for the full year. Chevron Corp. (CVX) slips 2% as the company will reduce share buybacks this quarter after oil prices tumbled. Cytokinetics (CYTK) falls 11% after the drug developer said US regulators need more time to review a safety plan
for the company’s experimental heart drug aficamten. Duolingo (DUOL) gains 8% after raising its full-year sales and profit outlook. Exact Sciences (EXAS) gains 11% after the maker of the Cologuard cancer test boosted its revenue forecast. Ingersoll Rand (IR)
falls 4% after the reducing its full year adjusted Ebitda forecast. LendingTree (TREE) declines 13% after the online loan marketplace cut its revenue guidance for the full year. Take-Two Interactive Software (TTWO) declines 15% after announcing a delay in
the release date of Grand Theft Auto VI. Twilio (TWLO) rises 8% after the communications software firm boosted some fiscal year forecasts. Reddit (RDDT) rises 8% after the social-networking company gave a second-quarter forecast that beat expectations.

Growth stocks have been leading the recovery but IVW has key resistance at the
200dma.

European gauges gained as the prospects of trade talks between China and the US boosted investor sentiment. Aero & Defense and Technology sectors lead gains while Utilities
fall. Shares in ING Groep NV jumped 5% after the banking group topped estimates and issued a fresh share buyback. BASF SE dropped as much as 2.6% after the German group’s earnings declined in the first quarter but kept its annual outlook unchanged. Shell shares
rose 2.6% after the oil major beat profit expectations for the first quarter and announced its latest $3.5 billion share buyback. Stoxx 600 +1%, DAX +1.7%, CAC +1.6%, FTSE 100 +0.8%. Aero & Defense +2.6%, Technology +2.4%, Construction +1.9%. Utilities -1%.

Shares in Asia rose, with the MSCI benchmark jumping 1.7% after China said it was mulling trade talks with the US. Taiwan’s benchmark advanced more than 2%, leading
gains around the region as many markets reopened after holidays. Australia and Singapore are gearing up for federal elections to be held on Saturday, with cost-of-living issues top of mind for voters in both nations. Australian stocks rose for a seventh straight
day ahead of the vote. Chinese markets remained closed for the Labor Day holiday and will resume trade on Tuesday, May 6. Taiwan +2.7%, Hang Seng Index +1.7%, ASX 200 +1.2%, Nikkei 225 +1%, Philippines +0.9%,  Indonesia +0.7%, Singapore +0.3%, Sensex +0.3%,
Topix +0.3%, Kospi +0.1%.

FIXED INCOME: 
 

Treasuries were little changed before the US payrolls report, which will likely show that employment growth slowed and the jobless rate held steady. US 10-year yields
up ~1bp to 4.225%; curve is flat.  Headline April jobs report is expected to print 138k, down from 228k prior while whisper number sits below estimate at 120k. 

METALS: 

Gold moved higher as the dollar weakened but is still set for its first back-to-back weekly loss this year, as haven appeal eased on signs of a thaw in the US-China
trade war. Investors are awaiting the US employment report for more cues on the Fed’s policy path.  Spot gold +0.8%, Silver -0.1%, Copper +0.6%.

ENERGY:   

Oil prices decline as traders weigh the possibility of US-China trade talks and a fresh sanctions threat against Iranian flows against a potential supply hike. OPEC+
countries will meet on May 5 to decide a June output plan. Brent futures for July remain on track for a weekly loss of more than 6% on concern that the OPEC+ cartel led by Saudi Arabia is poised to push more supplies into an already-fragile world market. Chevron
will slash share buybacks this quarter after oil prices have tumbled, and despite beating earnings estimates. Exxon matched estimates due to higher production from low-cost projects, allowing it to maintain its share buybacks. WTI -0.9%, Brent -0.8%, US Nat
Gas +0.5%, RBOB -1%. 

CURRENCIES: 

In currency markets, the dollar fell versus all Group-of-10 currencies and headed for a weekly drop after news on China mulling trade talks with the US boosted risk
sentiment. Taiwan’s dollar surged 3% against the US dollar, marking its largest one-day advance since 1988, driven by upbeat growth data and easing trade tensions. The Aussie dollar and Swedish krona are leading G-10 gains against the greenback. US$ Index
-0.5%, GBPUSD +0.15%, EURUSD +0.4%, USDJPY -0.6%, AUDUSD +0.8%, NZDUSD +0.6%, USDCHF -0.7%, USDCAD -0.2%, USDSEK +1%, USDNOK -0.6%, USDMXN +0.4%.

Bitcoin +0.5%, Ethereum +0.4%.  

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
• AutoZone (AZO) Raised to Outperform at Oppenheimer; PT $4,600
• FTAI Aviation (FTAI) Raised to Buy at Stifel; PT $123
• Grab Holdings (GRAB) Raised to Buy at DBS Bank; PT $5.68
• iRhythm (IRTC) Raised to Overweight at Wells Fargo; PT $130
• Northfield Bancorp (NFBK) Raised to Overweight at Piper Sandler; PT $14
• Reddit (RDDT) Raised to Market Perform at Bernstein; PT $130
• TC Energy (TRP CN) Raised to Outperform at CIBC; PT C$76
• TerraVest Capital (TVK CN) Raised to Outperform at National Bank
• Downgrades
• Airbnb (ABNB) Cut to Neutral at Wedbush; PT $135
• Albemarle (ALB) Cut to Strong Sell at CFRA
• Ardelyx (ARDX) Cut to Outperform at Raymond James; PT $11
• Arvinas (ARVN) Cut to Hold at TD Cowen
• Cut to Hold at Jefferies; PT $10
• Ashland Inc (ASH) Cut to Equal-Weight at Wells Fargo; PT $50
• Becton Dickinson (BDX) Cut to Market Perform at Raymond James
• Cut to Neutral at Goldman; PT $192
• Cut to Neutral at Piper Sandler; PT $185
• Cut to Equal-Weight at Wells Fargo; PT $172
• Block (XYZ) Cut to Hold at Benchmark
• Cut to Neutral at Seaport Global Securities
• Cut to Neutral at President Capital Management; PT $61
• Cable One (CABO) Cut to Market Perform at Raymond James
• Cut to Sector Weight at KeyBanc
• H&R Block (HRB) Cut to Neutral at Northcoast
• Organon (OGN) Cut to Inline at Evercore ISI
• Robert Half Inc (RHI) Cut to Neutral at BNPP Exane; PT $45
• Spin Master (TOY CN) Cut to Hold at Canaccord; PT C$26
• Initiations
• Broadcom (AVGO) Reinstated Buy at William O’Neil
• CG Oncology (CGON) Rated New Overweight at JPMorgan; PT $41
• Diamondback (FANG) Rated New Outperform at RBC; PT $180
• Discovery Silver Corp (DSV CN) Rated New Outperform at National Bank
• Exodus Movement (EXOD) Rated New Outperform at KBW; PT $65
• Fortrea Holdings (FTRE) Rated New Hold at Truist Secs; PT $7
• Grace Therapeutics Inc (GRCE) Rated New Buy at TD Cowen; PT $12
• Howmet Aerospace (HWM) Reinstated Buy at William O’Neil
• Jade Biosciences Inc (JBIO) Rated New Buy at TD Cowen
• Structure Therapeutics (GPCR) ADRs Rated New Buy at Citi; PT $60

Data sources: Bloomberg, Reuters, CQG

David Wienke