Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET Initial Jobless Claims,
Nonfarm Productivity, Unit Labor Costs; 10:00ET Wholesale Trade Sales, US/UK Trade Announcement; 11:00ET NY Fed 1-Yr Inflation Expectations; 30-Year Auction

BOE CUTS KEY RATE BY 25BPS TO 4.25%; EST. 4.250%.  5 POLICY MAKERS VOTED FOR QUARTER-POINT CUT, 2 FOR HALF, 2 FOR NO CHANGE

Highlights and News:  

• Trump Expected to Unveil US-UK Trade Pact
• Trump post: The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come. Because
  of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!
• A state of emergency has been declared in Islamabad, Pakistan’s capital
• ISRAEL SAYS STRUCK HEZBOLLAH WEAPONS, TUNNELS IN SOUTH LEBANON
• Putin Signs New Investments Treaty with China Today: Prepare Joint Projects Worth $200B
• EU Proposes Tariffs on €95B of US Goods if Talks Fail

Global stocks rose after President Trump teased the announcement that the US and Britain are set to unveil an agreement today to reduce tariffs on certain goods,
marking the first of his promised deals. He also promised several other deals to come. The Bank of England cuts rates to 4.25% as widely expected. The Riksbank and Norges Bank kept interest rates unchanged, with the Riksbank signaling a bias toward easing
and Norges Bank reiterating that cuts may start later this year. Brazil’s central bank raised its interest rate by a half-point to 14.75%, the highest level since 2006. Investors are also anxiously awaiting planned talks between US and Chinese officials in
Switzerland on Saturday. While there was little international fallout from the conflict between India and Pakistan, investors were monitoring signs of escalation. Pakistan’s army said it shot down 12 drones from India, while New Delhi said it thwarted a number
of drone and missile strikes in its territory. A state of emergency has been declared in Islamabad, Pakistan’s capital.

EQUITIES: 

US equity futures extend yesterday’s late surge on news the Trump administration plans to rescind some Biden-era AI chip curbs as part of a broader effort to revise global semiconductor
trade restrictions. Intel Corp. rose more than 3% in premarket trading, while peers such as Nvidia and Micron Technology also gained. Fortinet dropped about 10% after results from the security software firm undershot estimates, while chip-design company Arm
Holdings fell 11% after a disappointing sales forecast. Drugmakers including Eli Lilly & Co. and Moderna slipped after a report that Trump plans to revive efforts to dramatically slash drug costs.
Cryptocurrency exposed stocks rise as Bitcoin approaches the $100,000 mark for the first time since February as global trade tensions show signs of easing.

Futures ahead of the bell: E-Mini S&P +0.9%, Nasdaq +1.25%, Russell 2000 +1.3%, DJI +0.7%.

In pre-market trading, AppLovin (APP) climbs 14% after the AI-powered advertisement platform reported first-quarter results that beat expectations. Arm Holdings (ARM)
drops 9% after giving a disappointing sales forecast. Carvana (CVNA) rises 4% after the online used-car retailer doubled its profits in the first quarter with record vehicle volume. Coherent (COHR) gains 6% after the semiconductor device company reported third-quarter
results that beat expectations. Dave Inc. (DAVE) rises 28% after the digital banking services company boosted its revenue and adjusted Ebitda forecast for the full year. Eli Lilly (LLY) drops 1.5% and AbbVie (ABBV) dips 1.7% following a Politico report that
President Donald Trump plans to revive an effort to dramatically slash drug costs by tying the amount the government pays for some medicines to lower prices abroad. Fluence Energy Inc. (FLNC) falls 15% after the provider of energy storage systems cut its total
revenue guidance range for the full year. Krispy Kreme Inc. (DNUT) falls 19% after saying the company will no longer pay quarterly cash dividends. Magnite Inc. (MGNI) rises 11% after the advertising technology company reported first-quarter results that beat.
MercadoLibre (MELI) climbs 8% after the e-commerce and fintech giant beat analysts’ expectations. Peloton Interactive (PTON) falls 4% after reporting that revenue sank 13% last quarter. Shopify Inc. (SHOP) slips 8% after projected sales in the current quarter
that just met expectations. Tapestry Inc. (TPR) gains 9% after the handbag maker raised its annual outlook. Tutor Perini Corp. (TPC) climbs 15% after the construction company boosted its year profit outlook.

European gauges are higher, snapping a two-day decline on the trade deal headlines. The Stoxx 600 is near highs of the day, with chip stocks among the top gainers while
utilities underperform. Britain’s domestically focused FTSE 250 index rose to a two-month high. Chip stocks rallied on a report that the White House plans to rescind some Biden-era curbs. Among other individual stocks, Siemens Energy AG gained 2.7% after it
said the impact of tariffs was going to be limited. Danish container giant A.P. Moller-Maersk A/S fell 0.8% after it lowered its forecast for the global transport market, rattled by the trade war. Stoxx 600 +0.9%, DAX +1.1%, CAC +1.2%, FTSE 100 +0.3%, FTSE
250 +1.1%. Technology +2.6%, Industrial Goods +2.2%, Retail +2%. Utilities -1.2%, Real Estate -0.5%.

Shares in Asia were mixed to lower as earnings caution in Japan outweighed optimism over signs of easing trade tensions. The MSCI Asia Pacific Index fell 0.6%, reversing
an earlier 0.3% gain. Japanese firms Nintendo and Toyota Motor Corp. were among the biggest drags, with the carmaker expecting a $1.3 billion profit hit in just two months on tariffs. Nintendo projected weaker-than-expected initial sales of the Switch 2. Trading
was halted in Pakistan after its benchmark KSE-30 Index slumped on intensifying military conflict with India. Markets were higher in Hong Kong, China and South Korea as signs of progress in trade negotiations supported sentiment. The confirmation of US-China
trade talks starting this weekend boosted optimism that the global tariff war has entered a de-escalation stage. Asia’s semiconductor-related stocks rise after a report that the Trump administration plans to rescind Biden-era curbs for the industry. New Zealand
-2%, Indonesia -1.4%, Philippines -1.2%, Thailand -1.1%, Sensex -0.5%, Singapore -0.4%, Taiwan was flat. Vietnam +1.5%, CSI 300 +0.6%, Nikkei 225 +0.4%, Hang Seng Index +0.4%, Kospi +0.2%, ASX 200 +0.2%, Topix +0.1%.

FIXED INCOME: 
 

Treasuries are cheaper across the curve as market sentiment improved after Trump claimed that a trade agreement with the UK will be announced at 10am EST. Rate-sensitive
two-year Treasury yields rose about five basis points as traders trimmed the odds of a July cut to around 80%. They still expect three interest-rate reductions in the remainder of 2025 but fully price the first move only for September. 10-year at 4.30%: 5s30s
curve flatter by 3bps and 2s10s flatten 1.5bps.  This week’s Treasury auction cycle concludes with $25 billion 30-year new issue, following strong demand for 10-year notes Tuesday.

METALS: 

Gold slips as the dollar rose and President Trump promised a “major” trade deal, boosting optimism about trade negotiations. Bullion traded near $3,340 an ounce,
after losing 2% in the previous session. China’s central bank has approved foreign exchange purchases by some commercial banks to pay for gold imports under recently increased quotas. Copper fell as the dollar rose after the US Federal Reserve kept interest
rates on hold. Chinese copper demand is strong, with import premiums hitting $100 a ton, the highest since December 2023, sources said. Spot gold -0.6%, Silver -0.1%, Copper -1.2%.

ENERGY:   

Oil rose, supported by hopes of a breakthrough in looming trade talks between the United States and China, the world’s two largest oil consumers.  Trump is expected
to announce a deal with the UK that may signal the direction his global trade war will take. TASS is reporting that Russia will boost oil, gas and LNG supplies to China this year. Occidental and APA joined a slew of shale producers announcing spending cuts
in the Permian basin on lower crude prices. WTI +1.8%, Brent +1.6%, US Nat Gas +1.3%, RBOB +1.1%. 

CURRENCIES: 

In currency markets, the US Dollar Index gained as markets pushed out the chance of near-term rate cuts after the Federal Reserve’s signal that it’s in no hurry to
ease monetary policy. Sterling rises as the BOE rate decision questions a June cut because the surprises in the announcement were mainly hawkish, with a three-way vote split and two policy makers arguing for no change in rates. The “gradual and careful” language
also remains. US$ Index +0.4%, GBPUSD +0.35%, EURUSD +0.05%, USDJPY +0.6%, AUDUSD -0.1%, NZDUSD -0.25%, USDCHF +0.15%, USDCAD +0.3%, USDSEK -0.3%, USDNOK -0.1%, USDMXN -0.1%.

Bitcoin +2.8%, Ethereum +9.2%.  Bitcoin rose toward the $100,000 mark for the first time since February, as market sentiment improved and Treasuries and gold prices
dropped.

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
• AG Growth International (AFN CN) Raised to Outperform at RBC; PT C$50
• AMD (AMD) Raised to Buy at DZ Bank; PT $118
• American States Water (AWR) Raised to Equal-Weight at Wells Fargo
• Certara (CERT) Raised to Overweight at Barclays; PT $14
• Charles River (CRL) Raised to Outperform at Evercore ISI
• Decisive Dividend (DE CN) Raised to Buy at Canaccord; PT C$7
• Disney (DIS) Raised to Buy at President Capital Management; PT $137
• International Flavors (IFF) Raised to Overweight at Barclays; PT $84
• Mosaic (MOS) Raised to Outperform at RBC; PT $40
• National Vision (EYE) Raised to Buy at BofA; PT $22
• OppFi (OPFI) Raised to Market Outperform at Citizens; PT $13.50
• Rockwell Automation (ROK) Raised to Neutral at JPMorgan; PT $271
• Taboola (TBLA) Raised to Buy at B Riley; PT $4
• Tamarack Valley Energy (TVE CN) Raised to Outperform at Raymond James
• Downgrades
• Archer-Daniels-Midland (ADM) Cut to Underperform at BofA; PT $45
• AvidXchange (AVDX) Cut to Neutral at BTIG
• Axalta (AXTA) Cut to Neutral at JPMorgan; PT $32
• Coty (COTY) Cut to Hold at Deutsche Bank; PT $6
• Cut to Hold at Canaccord; PT $5
• Geron (GERN) Cut to Sector Perform at Scotiabank; PT $1.50
• Hain Celestial (HAIN) Cut to Market Perform at Bernstein; PT $1.50
• Hillenbrand (HI) Cut to Sector Weight at KeyBanc
• Minto Apartment (MI-U CN) Cut to Market Perform at Raymond James; PT C$15
• Cut to Sector Perform at National Bank; PT C$14
• Myriad Genetics (MYGN) Cut to Peerperform at Wolfe
• Seres (MCRB) Cut to Neutral at Chardan Capital Markets; PT $6
• ShaMaran Petroleum (SNM CN) Cut to Neutral at SpareBank
• Uber (UBER) Cut to Neutral at Wedbush; PT $85
• Initiations
• Arthur J Gallagher (AJG) Rated New Buy at William O’Neil
• Centessa Pharmaceuticals (CNTA) US Rated New Buy at Chardan Capital Markets; PT $30
• Fluor (FLR) Rated New Buy at President Capital Management; PT $42
• Halozyme (HALO) Rated New Buy at William O’Neil
• Summit Therapeutics (SMMT) Rated New Buy at TD Cowen

Data sources: Bloomberg, Reuters, CQG

David Wienke