Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Durable Goods Orders, Cap Goods; 9:00ET FHFA House Price Index, House Price Purchase
Index; 9:30ET Fed’s Barkin speaks; 10:00ET Conf. Board Consumer Confidence; 10:30ET Dallas Fed Manf. Activity; 1:00ET 2-Year Auction

Highlights and News:  

• EU to Focus on Critical Sectors in Bid to Avoid Trump’s Tariffs
• HASSETT ON TRADE DEALS: WE WILL SEE FEW MORE DEALS, EVEN THIS WEEK
• Goldman Sachs economists expect tariff-related inflation to be short-lived
• Russia Starts Major Navy Drills in the Baltic Sea
  
• JPMorgan remains tactically bullish on equities
• Trump Media plans to raise $3 billion to buy cryptocurrencies
• TRUMP ADMIN PLANS TO CUT REMAINING $100M HARVARD CONTRACTS: NYT
  

Global stocks rise after President Trump said he would extend the deadline for the European Union to face 50% tariffs until July 9. The EU is seeking to accelerate
trade talks with the US, focusing on critical sectors and tariff/non-tariff barriers. Meanwhile, Japanese government bonds lead a global long-end rally after Bloomberg News reported the country’s finance ministry has asked market participants for their views
on the appropriate amount of government debt issuance, sparking speculation that it may reduce issuance of super-long bonds. France’s inflation rate dropped further below the European Central Bank’s 2% target, hitting a more than four-year low at 0.6% and
strengthening the case that borrowing costs can be cut further.  

EQUITIES: 

US equity futures surge after the long weekend brought another rapid turnaround in Trump’s tariff threats. Tensions between the United States and the European bloc cooled as Trump rolled
back his threat of steep tariffs against the EU. Most megacap and growth stocks jumped in premarket trading.  JPMorgan sees last week’s pullback as healthy and expects markets to move higher, supported by stable macro data, strong earnings, and easing trade
tensions. In corporate news, Salesforce is expected to pay $25 per share for Informatica in a roughly $8 billion deal set to be announced today, the WSJ reported. Trump Media plans to raise $3 billion to buy cryptocurrencies, the FT reported.

Futures ahead of the bell: E-Mini S&P +1.4%, Nasdaq +1.5%, Russell 2000 +1.6%, DJI +1.3%.

In pre-market trading, gold mining stocks are lower following peers in the rest of the world as gold extends a slide on weakening demand for haven assets. Barrick Mining
(B) -1.9%; Newmont -2.5%. Block (XYZ) gains 2.6% after BNP Paribas Exane upgraded the firm to outperform. Informatica (INFA) rises 5% as Salesforce is said to be reviving talks to acquire the software company. PDD ADRs (PDD) drops 18% after the budget shopping
site reported the lowest adj. operating margin in three years. Rocket Pharmaceuticals (RCKT) sinks 62% after a patient participating in a Phase 2 trial passed away. Trump Media (DJT) climbs 8% after the Financial Times reported that the company plans to raise
$3 billion to buy cryptocurrencies. Magnificent Seven stocks: Tesla (TSLA) +2.2%, Nvidia (NVDA) +2.5%, Meta Platforms (META) +1.9%, Amazon (AMZN) +1.6%, Alphabet (GOOGL) +1.5%, Apple (AAPL) +1.6%, Microsoft (MSFT) +1.1%.

European gauges are firm as the EU moved to speed up trade talks with the US. The Stoxx Europe 600 Index was up 0.5%, with technology, travel and leisure and industrial
sectors leading the advance. Utilities were clear laggards with E.On shares falling as much as 2.1% after the German utility firm was downgraded by analysts at Citigroup following a stellar rally in the shares since the start of the year. Elementis shares
jumped as much as 17% after the specialty chemicals company struck a deal to offload its talc business. Meanwhile, auto shares recouped early losses triggered by data showing European car sales dipped in April, with consumers holding off on larger purchases
amid global trade uncertainty. Consumer prices in France rose 0.6% from a year ago in May, the weakest pace since December 2020, as energy costs sank. Swiss exports to the US plummeted by 36% in April, showing the fallout from Trump’s tariff policy. Stoxx
600 +0.4%, DAX +0.7%, CAC +0.2%, FTSE 100 +0.8%. Aero & Defense +1.7%, Technology +1.1%, Industrials +1%, Travel +1%. Utilities -0.4%, Insurance -0.3%.

Shares in Asia were mostly lower as investors continued to assess the global trade climate after Trump deferred 50% tariffs on European Union imports. The MSCI Asia
Pacific Index fell 0.3%, weighed down by losses in technology shares. Benchmark gauges dropped in Taiwan, India and mainland China, while Japanese and Hong Kong shares advanced. Asian equities have been outperforming with the MSCI regional benchmark on track
to beat a gauge of global equities for the fourth month in a row, the longest such streak since 2017. BYD shares slumped after its sweeping price cuts stoked concern of another wave of discounting in China’s EV market. Shares of Chinese drugmakers rose, as
many of them present at the American Society of Clinical Oncology conference. Thailand -1.3%, Taiwan -0.9%, Sensex -0.8%, CSI 300 -0.5%, Kospi -0.3%, Philippines -0.1%. Indonesia +0.1%, Hang Seng Index +0.4%, Nikkei 225 +0.5%, Vietnam +0.5%, ASX 200 +0.6%.

FIXED INCOME: 
 

Treasuries advanced after Japan indicated it’s considering a reduction in bond issuance, fueling speculation that demand for US bonds could rise. The yield on 30-year
Treasuries fell seven basis points to move below 5%. Treasuries bull flattened as 2/30yr curve is flatter by 6bps and 2s10s flatter by 3bps. 10-year yields trade lower by around 4.5bp at 4.47%. Treasury auctions resume with $69 billion 2-year note sale at
1pm EST, with $70 billion 5-year and $44 billion 7-year note auctions Wednesday and Thursday.  

METALS: 

Gold declines as the dollar gained strength and demand for safe-haven assets waned, with investors also considering the potential for better US-EU trade relations.
Spot gold fell more than 1% after Brussels said it would accelerate negotiations with Washington to avoid a trans-Atlantic trade war. Gold-backed exchange-traded funds registered five straight weeks of outflows since peaking at the highest in more than a year
in mid-April.  Spot gold -1.6%, Silver -1.8%, Copper -1.8%.

ENERGY:   

Oil prices fluctuated as the market waits for the outcome of an OPEC+ meeting on supply policy and potential easing of trade tensions between the EU and US. OPEC+
is expected to decide on July production levels at a video-conference on May 31, with a possible output increase of 411,000 barrels per day. Brent trades just above $64 a barrel after a quiet session on Monday due to holidays in London and New York. WTI -0.1%,
Brent -0.05%, US Nat Gas -1.6%, RBOB +0.3%. 

CURRENCIES: 

In currency markets, the dollar strengthened versus all Group-of-10 peers, as markets digested news of the Japanese government considering reducing debt issuance.
Bank of Japan Governor Ueda gave the yen a boost initially after indicating his intention to continue raising the benchmark interest rate if the economy improves as expected. The yen weakened as Japanese bond yields tumbled. The euro fell as France’s inflation
rate dropped further below the European Central Bank’s 2% target, reaching a more than four-year low and adding to arguments that borrowing costs can be cut further.  US$ Index +0.4%, GBPUSD -0.1%, EURUSD -0.3%, USDJPY +0.9%, AUDUSD -0.6%, NZDUSD -0.7%, USDCHF
+0.7%, USDCAD +0.2%, USDSEK +0.6%, USDNOK +0.4%.

Bitcoin -0.1%, Ethereum +3.0%. 

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
• BCE (BCE CN) Raised to Hold at Accountability Research; PT C$31
• BellRing Brands (BRBR) Raised to Buy at DA Davidson; PT $85
• Block (XYZ) Raised to Outperform at BNPP Exane; PT $72
• Commercial Metals (CMC) Raised to Outperform at Wolfe; PT $50
• Cummins (CMI) Raised to Buy at Goldman; PT $431
• Envista Holdings (NVST) Raised to Outperform at Baird; PT $23
• Hormel (HRL) Raised to Neutral at BNPP Exane; PT $30
• Kyverna Therapeutics (KYTX) Raised to Buy at HC Wainwright; PT $5
• Southwest Air (LUV) Raised to Hold at Jefferies; PT $33
• Terex (TEX) Raised to Buy at Goldman; PT $60
• Wingstop (WING) Raised to Buy at Truist Secs; PT $400
• Downgrades
• Atmus Filtration (ATMU) Cut to Neutral at Goldman; PT $39
• CoreWeave (CRWV) Cut to Equal-Weight at Barclays; PT $100
• Deckers Outdoor (DECK) Cut to Neutral at KGI Securities; PT $110
• Globus Medical (GMED) Cut to Neutral at BTIG
• Jack in the Box (JACK) Cut to Hold at Truist Secs; PT $22
• KBR (KBR) Cut to Neutral at Goldman; PT $55
• Leidos (LDOS) Cut to Neutral at Baird; PT $163
• Merck & Co (MRK) Cut to Hold at Mirae Asset Securities; PT $91
• MINISO (MNSO) ADRs Cut to Hold at Deutsche Bank; PT $20
• National Storage (NSA) Cut to Underweight at Morgan Stanley; PT $30
• Prime Medicine (PRME) Cut to Neutral at Citi; PT $1.50
• Prothena (PRTA) Cut to Hold at Jefferies; PT $6
• Cut to Market Perform at Oppenheimer
• RB Global (RBA CN) Cut to Sector Perform at National Bank; PT C$157.95
• UNITY Biotech (UBX) Cut to Neutral at HC Wainwright; PT $2
• US Steel (X) Cut to Peerperform at Wolfe
• Cut to Hold at Jefferies; PT $55
• Wajax (WJX CN) Cut to Hold at TD Cowen; PT C$24
• Initiations
• CAMP4 Therapeutics (CAMP) Rated New Outperform at Wedbush; PT $8
• Discovery Silver Corp (DSV CN) Rated New Outperform at Raymond James
• Dlocal (DLO) Reinstated Buy at Citi; PT $14.60
• Expro Group Holdings NV (XPRO) Rated New Overweight at Wells Fargo
• Haleon (HLN LN) ADRs Rated New Outperform at BNPP Exane; PT $13.40
• Niagen Bioscience Inc (NAGE) Rated New Buy at Canaccord; PT $13
• Premium Brands (PBH CN) Rated New Buy at Canaccord; PT C$100
• Sandisk (SNDK) Rated New Buy at Benchmark; PT $58
• Soundhound (SOUN) Rated New Overweight at Piper Sandler; PT $12
• TerraVest Capital (TVK CN) Rated New Market Perform at BMO; PT C$180

Data sources: Bloomberg, Reuters, CQG

David Wienke