Daily Game Plan

by Contributor
on May 12, 2025

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

TODAY’S ECONOMIC DATA:  2:00ET Federal Budget Balance

Highlights and News:  

  • CHINA SAYS COMMITTED TO THE STABILITY OF SINO-US RELATIONS
  • US TO CUT TARIFFS ON CHINESE GOODS TO 30% FROM 145% FOR 90 DAYS
  • TRUMP SEEKING $1 TRILLION IN DEALS DURING GULF TRIP: AXIOS
  • BESSENT: UK, SWITZERLAND MOVED TO FRONT OF QUEUE TO TRADE DEAL
  • Hamas Says It Will Free Last Living American Hostage in Gaza

 

Global stocks rallied after the US and China agreed to a 90-day pause on tariffs, with the US reducing its levies from 145% to 30% and China reducing its duties from
125% to 10%. “We are in agreement that neither side wants to decouple,” Treasury Secretary Scott Bessent said, adding that “we had a very robust and productive discussion on steps forward on fentanyl” and that talks might lead to China buying more American-made
products. Bessent added that the tariff reductions don’t apply to sectoral duties imposed on all US trading partners, and the tariffs applied on China during the first Trump administration remain in place. China also said it would suspend or cancel its non-tariff
countermeasures imposed on the US since April 2. Pharmaceutical company stocks dropped globally after President Trump announced plans to mandate lower US prescription drug prices to match those in other nations. And after a weekend of hectic diplomacy, Ukraine’s
Zelenskiy said he will travel to Istanbul on May 15 where Russian President Putin has proposed direct negotiations between the two countries. Hamas said it will release the last living American hostage held in Gaza after renewed talks with the US over a truce
deal with Israel.

 

EQUITIES: 

US equity futures surged after China and the US agreed to cut tariffs and de-escalate their trade war. Shares in US drugmakers dropped after Trump said he plans to order a cut in US prescription
drug costs by mandating that Americans pay no more than people in countries that have the lowest price. Trump said drug prices will be cut by “59%, PLUS!” and predicted that pharmaceutical prices could drop 30% to 80% in the US. Treasury Secretary Scott Bessent
said that talks with China had been “very productive” and both countries had agreed to cut “reciprocal” tariffs by 115% for 90 days. That brings US tariffs on Chinese goods down to 30%, and Chinese tariffs on US imports to 10%. Bessent told CNBC’s “Squawk
Box” on Monday that he expects to meet once again with representatives from Beijing in the “next few weeks” to iron out a bigger agreement.

Futures ahead of the bell: E-Mini S&P +3.2%, Nasdaq +4%, Russell 2000 +4.7%, DJI +2.7%.

In pre-market trading, Apple (AAPL) rises 6% after the WSJ reported that the company is considering raising iPhone prices. Amazon (AMZN) +8%, Tesla (TSLA) +7.9%, Meta
Platforms (META) +6%, Nvidia (NVDA) +4%. Pharmaceutical stocks fall after US President Donald Trump said he planned to order a cut in US prescription drug costs to bring them in line with other countries. Semiconductor, travel, shipping and consumer stocks
rally on trade news. Advanced Micro Devices (AMD) +6%,  Delta Air Lines (DAL) +7%, United Parcel Service (UPS) +4%, Nike (NKE) +6%, Estee Lauder (EL) +6%. Precious metals mining stocks drop as gold falls, with demand for haven assets declining. ACI Worldwide
(ACIW) rises 5%, rebounding from a two-day rout, after DA Davidson upgraded the stock to buy. Johnson Controls (JCI) gains 2% after Deutsche Bank upgraded the company to buy. MAG Silver Corp. (MAG) climbs 12% after  Pan American Silver Corp. agreed to buy
the company. NRG Energy (NRG) gains 8% after agreeing to acquire natural gas-fired power assets from LS Power Equity Advisors. Sable Offshore Corp. (SOC) jumps 16% after the company and other energy firms alleged in a new lawsuit that Santa Barbara County
is illegally withholding permits to restart operations on dormant offshore platforms and onshore processing facilities. Shopify’s US-listed shares (SHOP) gains 9% after Nasdaq announced on Friday that the Canadian e-commerce platform will replace MongoDB in
the Nasdaq-100 Index prior to market open on May 19.

European gauges are higher in choppy trading. Miners, consumer products and autos are the strongest-performing sectors while pharmaceutical companies fall after President
Trump’s plan to cut US drug prices. European defense stocks slide on cooling geopolitical tensions as Russian President Putin offered to hold direct talks with Ukraine, while India and Pakistan agreed to an immediate ceasefire mediated by the US. Among individual
movers, UniCredit jumped over 4% after the Italian lender posted higher-than-expected first quarter net profit. Shipping giant Maersk surged as much as 13% on the tariff news. Other stocks in the Stoxx Europe 600 rising more than 5% include Danish electronics
manufacturer GN Store Nord, footwear maker Puma, building materials firm Arkema and mining giant Glencore. Stoxx 600 +0.9%, DAX +0.5%, CAC +1.3%, FTSE 100 +0.5%. Basic Resources +6%, Autos +4%, Travel & Leisure +3.3%, Technology +3.2%. Healthcare -2.3%, Utilities
-1.8%.

Shares in Asia rose after the US and China agreed to lower tariffs for 90 days. The MSCI Asia Pacific Index advanced 0.6%, with Tencent and Alibaba, as well as South
Korea’s Samsung Electronics, giving the biggest boosts. The onshore CSI 300 Index and Hong Kong indices all recouped their losses since President Trump announced sweeping tariffs on April 2. Shares in India jumped almost 4% and those in Pakistan rallied 9%
after the two nations agreed to an immediate ceasefire after four days that saw the worst fighting between the countries in half a century. Sensex +3.7%, Hang Seng Index +3%, Vietnam +1.3%, Kospi +1.2%, CSI 300 +1.2%, Taiwan +1%, Topix +0.3%, ASX 200 +0.03%.

FIXED INCOME: 
 

Treasuries hold steep losses led by short maturities amid a rebound in risk appetite after the US and China agreed to temporarily lower tariffs while in pursuit of
a trade agreement. Treasury curve is flatter after yields gapped higher at the Asia open. US front-end yields, off session highs, remain more than 9bp cheaper on the day, with 30-year higher by about 5bp; 2s10s spread is 2bp tighter, 5s30s more than 4bp tighter;
10-year near 4.45% is 6bp higher on the day.

 

METALS: 

Spot gold tumbled to near $3,220 an ounce, as the US and China agreed to temporarily slash the harsh tariffs imposed on each other and work together to limit economically
damaging trade spats. Traders are also eyeing the US Consumer Price Index data on Tuesday for fresh signals on the Federal Reserve’s monetary policy trajectory. Spot gold -2.9%, Silver -1.3%, Copper +0.3%.

 

 

ENERGY:   

 

Crude oil jumps 4% on hope economic growth will rebound from temporary US-China trade deal. The lower tariff rate will remain in place for 90 days as the world’s
two largest economy continue to negotiate. WTI +4%, Brent +3.7%, US Nat Gas -0.4%, RBOB +2.6%. 

 

CURRENCIES: 

In currency markets, the dollar heads for its best day in more than a month after the US and China agreed to temporarily lower tariffs. The agreement led to a decline
in traditional haven assets such as the Japanese yen and the Swiss franc. The euro falls as much as 1.5% versus the dollar, on track for its worst day this year. US$ Index +1.3%, GBPUSD -0.9%, EURUSD +1.3%, USDJPY +1.9%, AUDUSD +0.4%, NZDUSD -0.6%, USDCHF
+1.5%, USDCAD +0.3%, USDSEK +0.8%, USDNOK +0.7%, USDMXN +0.6%.

 

 

Bitcoin -0.4%, Ethereum +1.3%. 

 

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
    • AB InBev (ABI BB) ADRs Raised to Buy at Goldman; PT $88
    • ACI Worldwide (ACIW) Raised to Buy at DA Davidson; PT $60
    • Air Canada (AC CN) Raised to Outperform at RBC; PT C$25
    • Astera Labs (ALAB) Raised to Overweight at Morgan Stanley; PT $99
    • Cloudflare (NET) Raised to Outperform at CICC; PT $154
    • Conoco (COP) Raised to Buy at Mirae Asset Securities; PT $112
    • Decisive Dividend (DE CN) Raised to Buy at Cormark Securities; PT C$8.50
    • EBay (EBAY) Raised to Buy at Daiwa; PT $70
    • Federal Signal (FSS) Raised to Overweight at KeyBanc; PT $110
    • Forge Global (FRGE) Raised to Overweight at Piper Sandler; PT $30
    • Hilton Worldwide (HLT) Raised to Buy at Jefferies; PT $296
    • Johnson Controls (JCI) Raised to Buy at Deutsche Bank; PT $112
    • Knight Therapeutics (GUD CN) Raised to Buy at Paradigm Capital; PT C$6.45
    • Marriott Intl (MAR) Raised to Buy at Jefferies; PT $303
    • Monster Beverage (MNST) Raised to Outperform at CICC; PT $65
    • NuVista Energy (NVA CN) Raised to Buy at Desjardins; PT C$17
    • ON Semi (ON) Raised to Equal-Weight at Morgan Stanley; PT $39
    • SLR Investment Corp (SLRC) Raised to Buy at Ladenburg Thalmann
    • Stryker (SYK) Raised to Buy at Mirae Asset Securities; PT $445
    • Tamarack Valley Energy (TVE CN) Raised to Buy at Desjardins; PT C$5.25
    • Telus Digital Experience (TIXT CN) Raised to Outperform at National Bank
    • Teva (TEVA IT) ADRs Raised to Overweight at JPMorgan; PT $23
    • TotalEnergies (TTE FP) ADRs Raised to Overweight at Morgan Stanley
  • Downgrades
    • Algonquin Power (AQN CN) Cut to Market Perform at BMO; PT C$8.36
    • Amphastar (AMPH) Cut to Neutral at JPMorgan; PT $30
    • BP (BP/ LN) ADRs Cut to Underweight at Morgan Stanley; PT $26.50
    • Braskem (BRKM5 BZ) ADRs Cut to Neutral at Bradesco BBI; PT $4
    • Docebo (DCBO CN) Cut to Sector Perform at ATB Capital; PT C$45
      • Cut to Sector Perform at National Bank; PT C$35
    • DocGo (DCGO) Cut to Hold at Canaccord; PT $1.45
    • Equinor (EQNR NO) ADRs Cut to Equal-Weight at Morgan Stanley; PT $22.70
    • European Residential REIT (ERE-U CN) Cut to Hold at Desjardins; PT C$2.75
    • Hydro One (H CN) Cut to Sell at Veritas Investment Research Co
    • IBEX (IBEX) Cut to Neutral at Baird; PT $30
    • Iovance Biotherapeutics (IOVA) Cut to Hold at Truist Secs
    • Lucky Strike (LUCK) Cut to Neutral at Roth Capital Partners; PT $9
    • Micron (MU) Cut to Underperform at GF Securities; PT $74
    • Sandisk (SNDK) Cut to Underperform at GF Securities; PT $31
    • Target (TGT) Cut to Underperform at Bernstein; PT $82
    • TaskUS (TASK) Cut to Neutral at Baird; PT $16.50
      • Cut to Market Perform at William Blair
    • Warner Music (WMG) Cut to Neutral at Goldman; PT $28
  • Initiations
    • Amentum Holdings (AMTM) Rated New Market Outperform at Citizens; PT $30
    • Centrus Energy (LEU) Rated New Buy at President Capital Management
    • Orange County (OBT) Rated New Outperform at Hovde Group; PT $30.50
    • Primo Brands (PRMB) Rated New Outperform at Mizuho Securities; PT $43
    • Radiopharm (RAD AU) ADRs Rated New Buy at ThinkEquity; PT $15
    • Vale (VALE3 BZ) ADRs Rated New Outperform at CICC; PT $11.30

 

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

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