Daily Game Plan

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

TODAY’S ECONOMIC DATA:   9:45ET S&P Global US Services PMI; 10:00ET ISM Services; 1:00ET 3-Year Auction

Highlights and News:  

• Trump Says Trade Deals May Be Agreed Soon
• Trump said he’s willing to lower tariffs on China “at some point”
• Warren Buffett will step down at year-end from Berkshire Hathaway
• Oil Sinks on OPEC+ Deal to Boost Output in June
• Trump plans to impose a 100% tariff on films produced overseas
  
• Musical comedy based on Luigi Mangione coming to San Francisco in June –
  link
• Markets in Japan, Hong Kong, China and the UK were closed today

Global stocks edged lower as uncertainty about US trade policy hung over markets. Trading was thin with the UK and some Asian markets closed for a holiday. In a TV
interview on Sunday, President Trump reiterated that he believed China wanted to do a deal but offered no details or timeline. Trump said he had no plans to talk to his Chinese counterpart this week, though he signaled trade deals with other unspecified partners
could come soon.  Trump sounded more upbeat about the prospects for reaching an agreement with China in an interview with NBC News that was taped on Friday and broadcast on Sunday. He told NBC that he’s willing to lower tariffs on China “at some point” and
praised some statements by Beijing.  Market attention this week will be on Wednesday’s FOMC decision and Thursday’s Bank of England meeting, where the BOE is expected to cut rates by 25bps to 4.25%. Central banks in Norway and Sweden also meet this week and
are expected to keep rates steady.

EQUITIES: 

US equity futures are lower to start the week, after the S&P 500’s longest winning streak in two decades.  On Sunday Trump said his administration was meeting with many countries on trade
deals, including China, and his main priority with China was to secure a fair deal. A trade deal with China would be a prerequisite for the US benchmark to sustain the recent advance, according to strategists at Morgan Stanley led by Michael Wilson. While
the Fed is broadly expected to keep rates unchanged at Wednesday’s FOMC meeting, attention will center on its economic projections. “It will take a couple of months for enough hard data evidence to accumulate to make the case for a cut,” Goldman Sachs economists
said in a note. They are forecasting three consecutive 25 basis point rate cuts in July, September, and October. In corporate news, Shell Plc is working with advisers to evaluate a potential acquisition of BP Plc, though it’s waiting for further stock and
oil price declines before deciding whether to pursue a bid, according to sources. In other news, Warren Buffett will step down at year-end from Berkshire Hathaway.  

Futures ahead of the bell: E-Mini S&P -0.8%, Nasdaq -1%, Russell 2000 -0.9%, DJI -0.6%.

In pre-market trading, Gold mining stocks are rising as bullion advanced after its first back-to-back weekly loss this year. Media stocks in decline after President
Donald Trump announced Sunday that he plans to impose a 100% tariff on films produced overseas. BioCryst Pharmaceuticals (BCRX) climbs 11% after the biotech said it now expects to be profitable for the full year 2025, a year ahead of schedule. Berkshire Hathaway
(BRK/A) falls 2.7% after Warren Buffett announced he will be stepping down as CEO. Freshpet (FRPT) slips 3% after the pet food maker cut its net sales guidance for the full year. Howard Hughes Holdings Inc. (HHH) rises 7% after entering an agreement where
Pershing Square will invest $900 million to acquire 9m newly issued shares of the company. ImmunityBio (IBRX) slumps 9% after the drug developer said it received a refusal-to-file letter from US FDA regarding its supplemental application to treat papillary
disease. Napco Security Technologies (NSSC) rises 7% after the maker of security systems after fiscal 3Q profit and sales topped estimates and recurring service revenue increased about 11%. Peabody Energy (BTU) climbs 9% after saying it has notified Anglo
American a “material adverse change” impacting its planned acquisition of coal assets from Anglo.

European gauges are mixed in subdued trading as investors assessed the US president’s latest comments on global trade. Europe’s benchmark Stoxx 600 index is flat after
posting nine days of gains through Friday, the longest streak in a year, buoyed by earnings significantly ahead of expectations. European firms in the MSCI Europe index are averaging earnings growth of 3.8% so far, outpacing pre-season estimates of a 1.4%
decline. Among individual movers today, Austrian lender Erste Group Bank AG climbed as more than 7% after agreeing to buy much of Banco Santander SA’s operations in Poland. Santander Bank Polska SA fell ~6%. On the data front, Swiss inflation dropped to zero,
the weakest in more than four years. Stoxx 600 +0.1%, DAX +0.7%, CAC -0.6%, FTSE 100 CLOSED. Aero & Defense +0.7%, Real Estate +0.6%, Insurance +0.6%. Chemicals -0.7%, Energy -0.5%.  

Shares in Asia were mostly higher, helped by gains in Vietnam as investors monitored evolving developments on the trade war front. Investors are looking for the next
cue after President Trump suggested that his administration could strike trade deals with some countries as soon as this week. The MSCI Asia Pacific Index rose 0.6%, with markets closed for a holiday in Japan, South Korea, Thailand, Hong Kong and China. Stocks
in Taiwan fell over 1% on concerns that a stronger currency would weigh on earnings of companies in the export-oriented economy. The local dollar surged as much as 5%, the biggest intraday gain in over three decades, on speculation exporters are rushing to
convert their holdings of US dollars to the island’s currency. Stocks fell in Australia as investors shrugged off Prime Minister Anthony Albanese’s historic election win. Vietnam +1.1%, Sensex +0.4%, Indonesia +0.2%, Singapore +0.2%. Philippines -0.8%, ASX
200 -1%, Taiwan -1.2%.

FIXED INCOME: 
 

Treasuries are mixed in early US trading, with front-end yields lower as oil and stock prices slide after President Trump said he had no plans to talk to his Chinese
counterpart this week. This week’s focal points include first coupon auctions of May-July quarter, beginning with 3-year note sale today. US front-end yields are 2bp-3bp richer on the day, 20- to 30-year cheaper by 1bp-2bp, leaving 2s10s and 5s30s spreads
~3bp wider. $58 billion 3-year auction, a day earlier than normal because of the Fed meeting, will be followed by $42 billion 10-year Tuesday and $25 billion 30-year Thursday. Japan walked back talk of using its US debt holdings as a bargaining chip in trade
talks with the US.

METALS: 

Gold rose more than 2%, helped by a weaker dollar, with investors looking forward to more details on the US-China trade negotiations and the Federal Reserve’s policy
meeting later this week. Gold advanced above $3,318 an ounce, recovering from a 2.4% loss last week, as investors considered the uncertain outlook for global trade and the US economy. The Fed is expected to hold rates steady on Wednesday, despite President
Trump’s pressure to cut interest rates.  Spot gold +2.4%, Silver +1.3%, Copper +1.1%.

ENERGY:   

Oil prices fell after OPEC+ agreed to another output hike, raising fears of a global supply surplus as trade war concerns threaten demand. Brent futures tumbled as
much as 4.6%, nearing $58 a barrel, before paring some losses. The alliance — led by Saudi Arabia and Russia — has been reversing prolonged output curbs that were meant to support prices, but which cost it market share to rival drillers. The EU is set to propose
measures to ban Russian gas imports by the end of 2027. That timeline rests on its ability to source alternative supplies, people familiar said. WTI -1.9%, Brent -1.6%, US Nat Gas +1.5%, RBOB -0.8%. 

CURRENCIES: 

In currency markets, the dollar dropped versus all Group-of-10 currencies amid uncertainty about US trade policy. Trump indicated the US may ink trade deals with
some countries as soon as this week, but said he had no plans to talk to his Chinese counterpart. Spot volumes were muted as Tokyo and London were closed for a holiday. The dollar slid over 5% against the Taiwan dollar, adding to a record 4.4% slide on Friday.
Taiwan’s central bank intervened after the local dollar surged to its biggest intraday gain in over 30 years, traders said. China’s yuan hit its highest in almost six months versus the dollar as investors bet Beijing might let its currency strengthen as part
of Sino-U.S. trade talks. Sterling faces a key test this week at Thursday’s Bank of England meeting, where a 25-basis-point rate cut to 4.25% is broadly anticipated. The focus is on whether policymakers hint at accelerated easing ahead. The Swiss franc was
little moved by data showing Swiss inflation fell to its lowest level in four years in April. Markets are nearly certain the Swiss National Bank will lower interest rates again next month, with expectations of sub-zero borrowing costs later this year.  US$
Index -0.4%, GBPUSD +0.4%, EURUSD +0.4%, USDJPY -0.8%, AUDUSD +0.6%, NZDUSD +0.7%, USDCHF -0.4%, USDCAD -0.1%, USDSEK -0.3%, USDNOK -0.2%, USDMXN -0.1%.

Bitcoin -1.5%, Ethereum -1.5%.  

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
• Artemis Gold (ARTG CN) Raised to Buy at Canaccord; PT C$27
• Ascendis Pharma (ASND) ADRs Raised to Overweight at Morgan Stanley
• Bloom Energy (BE) Raised to Outperform at Mizuho Securities; PT $26
• Instacart (CART) Raised to Buy at CFRA
• Lumen Technologies (LUMN) Raised to Outperform at Raymond James
• Methanex (MX CN) Raised to Sector Outperform at Scotiabank; PT $53
• Mettler-Toledo (MTD) Raised to Hold at Jefferies; PT $1,110
• Nexxen International Ltd (NEXN) Raised to Outperform at Raymond James
• Reddit (RDDT) Raised to Buy at Seaport Global Securities; PT $165
• Sotera (SHC) Raised to Buy at Goldman; PT $17
• Twilio (TWLO) Raised to Hold at HSBC; PT $99
• Wendy’s (WEN) Raised to Overweight at JPMorgan; PT $15
• Worthington Enterprises (WOR) Raised to Buy at Canaccord; PT $67
• Downgrades
• Acushnet (GOLF) Cut to Neutral at Compass Point; PT $71
• Arvinas (ARVN) Cut to Hold at Truist Secs; PT $11
• Block (XYZ) Cut to Neutral at Macquarie; PT $50
• Cut to Neutral at Piper Sandler; PT $51
• Enact (ACT) Cut to Market Perform at KBW; PT $39
• Hecla Mining (HL) Cut to Market Perform at BMO; PT $5.50
• Huntsman (HUN) Cut to Equal-Weight at Wells Fargo; PT $13
• Microsoft (MSFT) Cut to Accumulate at Phillip Secs; PT $480
• Onto Innovation Inc (ONTO) Cut to Neutral at Cantor; PT $135
• Parsons (PSN) Cut to Hold at Jefferies; PT $65
• Shopify (SHOP CN) Cut to Neutral at BNPP Exane; PT $100
• Spotify (SPOT) Cut to Reduce at Phillip Secs; PT $600
• Timken (TKR) Cut to Neutral at DA Davidson; PT $71
• Initiations
• AST SpaceMobile (ASTS) Rated New Perform at Oppenheimer
• CoreWeave (CRWV) Rated New Neutral at MoffettNathanson LLC
• EHang Holdings (EH) ADRs Rated New Buy at Jefferies; PT $30.40
• Iridium Communications (IRDM) Rated New Outperform at Oppenheimer
• Jade Biosciences Inc (JBIO) Rated New Buy at Stifel; PT $19
• Marti Technologies (MRT) Rated New Buy at Benchmark; PT $5
• Meta (META) Rated New Buy at Sealand Securities
• Okta (OKTA) Rated New Buy at Loop Capital; PT $140
• Roper (ROP) Rated New Outperform at William Blair

Data sources: Bloomberg, Reuters, CQG

David Wienke