Daily Game Plan

by Contributor
on May 19, 2025

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

TODAY’S ECONOMIC DATA:  ET
8:30: Fed’s Bostic Speaks, Fed’s Member Williams Speaks, 8:45 a.m: Fed’s Jefferson speaks, 11:30 a.m.: US to sell $76 billion 13-week bills, $68 billion 26-week bills, 1:15 p.m: Fed’s Logan speaks, 1:30 p.m: Fed’s Kashkari speaks

 

Highlights and News:  

 

  • Mexican Navy training ship that hit Brooklyn Bridge, killing 2 crew members, was moving in the ‘wrong direction,’ city official says.
  • Former President Joe Biden has been diagnosed with prostate cancer, his personal office announced Sunday.
  • World No. 1 Scottie Scheffler won his first PGA Championship at Quail Hollow Club in Charlotte,
    North Carolina on Sunday.

 

 

Global stocks fell sharply after Moody’s downgraded the U.S. credit rating due to a growing budget deficit.  Asian and European stocks declined amid weak Chinese
data and tech selloffs, oil prices slipped on geopolitical and trade tensions, and precious metals rose on safe-haven demand. The Fed warned of economic ripple effects, while Morgan Stanley urged buying the dip. Political developments included a House committee
advancing Trump’s tax and spending plan with Medicaid cuts and his planned call with Putin on Ukraine. Meanwhile, Blackstone will acquire TXNM Energy, the owner of New Mexico’s largest utility, for an enterprise value of $11.5 billion. Nvidia’s CEO, Jensen
Huang, stated there is no evidence that the company’s chips are being diverted to China. Apple insiders warn that the company’s struggles with AI could threaten everything from the iPhone’s dominance to its future product lineup.

 

 

EQUITIES: 

 

US equity futures declined sharply after Moody’s downgraded the U.S. credit rating, with S&P 500 futures down 1.1%, Nasdaq 100 futures falling 1.4%, and Dow futures
off 0.6%, while the MSCI World Index edged up 0.1%. The Magnificent Seven tech giants slipped, led by Tesla (-3.5%), Nvidia (-2.7%), Meta (-1.9%), and Alphabet (-1.8%), amid a broad risk-off mood. Cryptocurrency-linked stocks including Coinbase, Robinhood,
and MicroStrategy fell as Bitcoin weakened. Alibaba ADRs dropped 2.3% following reports of U.S. concerns over Apple’s potential deal with the Chinese tech giant, while Novavax shares surged 12% after the FDA approved its Covid-19 vaccine for older adults and
high-risk groups. Reddit shares declined 6.4% after Wells Fargo downgraded the stock due to increased competition from Google’s expanding AI search features. UnitedHealth rose 4.8% despite a downgrade to hold, and healthcare and gold-related stocks like Anglogold
and Newmont gained ground.

 

Futures ahead of the bell: E-Mini S&P -1.1%, Nasdaq -1.4%, Russell 2000 -1.3%, DJI -0.5%.

 

 

European stocks fell as Moody’s downgrade of the U.S. credit rating dampened global sentiment, dragging equities lower across the region. The Stoxx Europe 600 Index
-0.6%, with most sectors in the red, led by declines in miners and luxury names after weaker-than-expected Chinese retail sales.
Meanwhile, Ryanair surged 5.4% to a record high, buoyed by strong travel demand this summer. A number of stocks also traded ex-dividend, adding to the pressure. Despite the pullback,
the index remains +7.5% YTD, outpacing the S&P 500’s +1.3%. Stoxx 600 -0.6%, FTSE 100 -0.2%, DAX -0.4%, CAC 40 -0.6%.

 

 

Asian stocks fell as Moody’s U.S. downgrade, a tech selloff, and weak Chinese consumption data weighed on sentiment. The MSCI Asia Pacific Index -0.4%, dragged by
chipmakers TSMC and Samsung, while Alibaba slid on U.S. concerns over its AI partnership with Apple. China’s retail sales missed expectations, and Treasury Secretary Bessent’s tough trade talk added to caution after last week’s rally. Japan’s Nikkei -0.7%,
Topix -0.1%; China’s CSI 300 -0.4%; Hang Seng Index -0.3%, Taiwan’s Taiex -1.5%; South Korea’s Kospi -1.2%, Kospi 200 -1.4%; Australia’s ASX 200 -0.6%; New Zealand’s NZX 50 -1.2%; India’s Nifty 50 flat; Singapore’s STI -0.3%; Malaysia’s KLCI -1%; Philippines’
-0.1%; Indonesia’s JCI +0.2%.

 

 

 

FIXED INCOME:   

 

Treasuries extended their slide into Monday’s early U.S. session, deepening losses from Friday after Moody’s downgraded the U.S. government’s credit rating. The selloff
was led by long-dated bonds, with 30-year yields rising above 5% and steepening the yield curve; the 10-year yield climbed to around 4.55%. European rates also moved higher, while U.S. stock futures fell—S&P 500 down 1.1% and Nasdaq 100 off 1.5%. Dealers expect
around $25 billion in new investment-grade issuance this week, with auctions of 20-year bonds and 10-year TIPS ahead.

 

 

 

 METALS: 

 

Gold prices climbed over 1% on Monday, supported by a softer dollar and safe-haven demand. Analysts expect ongoing short-term fluctuations but see structural tailwinds
from U.S. fiscal policies and diversification away from the dollar that could push gold to new highs in coming years. Alongside gold, silver, palladium, and platinum also gained. Gold +1.3%, Silver +1%.

 

 

 

 

ENERGY: 

 

Oil prices edged lower as talks to end the war in Ukraine and the recent US credit rating downgrade weighed on markets. Despite the bearish backdrop—including ongoing
US-China trade tensions, Trump’s trade war threatening demand, and OPEC+ returning shuttered production—Brent’s decline was relatively modest, supported by expectations that a softer dollar could bolster global oil demand. Crude prices remain down over 10%
this year amid concerns over a slowing US economy, geopolitical tensions, and a forecasted oversupplied market later in 2025. Meanwhile, a scheduled call between Presidents Trump and Putin added uncertainty, with Russia unlikely to make concessions given its
perceived upper hand in the conflict. WTI -0.9%, Brent -0.9%, Nat Gas -3.6%.

 

 

 

CURRENCIES: 

 

In currency markets, the U.S. Dollar Index declined against a range of currencies, hitting a ten-day low against the safe-haven yen. The euro and sterling strengthened
amid EU-UK talks and Australia’s dollar also rose ahead of an expected rate cut. China on Monday called on the United States to take responsible policy measures to maintain the stability of the international financial and economic system and safeguard the
interests of investors, while U.S. Treasury Secretary Scott Bessent warned tariffs could rise if trade partners don’t negotiate in “good faith.” US$ Index -0.8%, GBPUSD +0.8%, EURUSD +0.9%, USDJPY -0.4%, AUDUSD +0.7%, NZDUSD +0.5%, USDCHF -0.5%, USDCAD -0.1%.

 

 

 

 

 

  • Upgrades
  • Downgrades
    • Biohaven (BHVN) Cut to Sector Perform at RBC; PT $21
    • Borr Drilling (BORR) Cut to Hold at Arctic Securities; PT $2
    • BP (BP/ LN) ADRs Cut to Hold at Jefferies; PT $29
    • BRF (BRFS3 BZ) ADRs Cut to Equal-Weight at Barclays; PT $3.50
    • Endava (DAVA) ADRs Cut to Neutral at JPMorgan
    • GE Aerospace (GE) Cut to Neutral at Northcoast
    • Helmerich & Payne (HP) Cut to Neutral at Citi; PT $19
    • Inozyme (INZY) Cut to Hold at TD Cowen; PT $4
      • Cut to Neutral
        at Piper Sandler; PT $4
    • Jack in the Box (JACK) Cut to Sell at Northcoast
    • Nabors (NBR) Cut to Underweight at Barclays; PT $28
    • Netflix (NFLX) Cut to Neutral at JPMorgan; PT $1,220
    • NexPoint Residential (NXRT) Cut to Market Perform at Citizens
    • Patterson-UTI (PTEN) Cut to Neutral at Citi; PT $6.50
    • Reddit (RDDT) Cut to Equal-Weight at Wells Fargo; PT $115
    • Shake Shack (SHAK) Cut to Hold at TD Cowen; PT $105
    • UnitedHealth (UNH) Cut to Hold at TD Cowen; PT $308

 

 

 

Colors within the report: Green is
always the 200 period (day, week). Red is always 21, Blue
= 50, Brown = 100 *Stars
have added importance 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

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