Daily Game Plan

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

TODAY’S ECONOMIC DATA:   10:00ET Factory Orders, Durable Goods Orders, Cap Goods, JOLTS Job Openings; 12:45ET Fed’s
Goolsbee speaks; 1:00ET Fed’s Cook speaks; 3:30ET Fed’s Logan speaks

Highlights and News:  

• OECD Cuts Global Growth Outlook
  
• China’s manufacturing sector had its worst slump since September 2022, Caixin said
• Meta to Buy Nuclear Power from Constellation Energy to Run Data Centers
• UK, US WORKING ON IMPLEMENTATION TIMELINE OF TARIFF DEAL: PARES
• China’s Premier Li: China welcomes Japanese and other foreign companies

Global stocks wavered as erratic US trade policies clouded market sentiment and investors turned cautious ahead of key developments later in the week. China’s factory
activity contracted in May for the first time in eight months, according to a private-sector survey released today, suggesting tariffs are beginning to impact manufacturers. The Trump administration wants countries to provide their best offer on trade negotiations
by tomorrow as officials seek to accelerate talks with multiple partners. The OECD now forecasts global economic growth to slow to 2.9% this year from 3.3% in 2024, with the US rate of expansion expected to tumble to 1.6% from 2.8%.  Far-right politician Geert
Wilders withdrew his Freedom Party from the Netherlands’ governing coalition, causing the government to collapse, and likely leading to a snap election. Data showed euro zone inflation eased below the European Central Bank’s 2% target last month, underpinning
expectations for another interest rate cut this week.

EQUITIES: 

US equity futures recover from losses as a warning by the OECD about global economic growth reinforced concern over the impact of the Trump administration’s trade war. The US is among
the economies hardest hit by Trump’s trade policies, the OECD said. A report due this morning is forecast to show a decline in job openings to the fewest since 2020. Trump is eager to land more trade deals but talks with China and Europe remain stalled amid
communications breakdowns and new tariff threats. The White House said Trump and Xi are “likely” to speak this week, although China hasn’t confirmed any decision on talks. In corporate news, Constellation Energy agreed to sell power from an Illinois nuclear
plant to Meta Platforms, a deal that could spur construction of a new reactor at the site as artificial intelligence sends power demand soaring.

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.05%, Russell 2000 +0.25%, DJI -0.2%.

In pre-market trading, Block shares (XYZ) rise 3% after the digital payments provider was upgraded to outperform from inline at Evercore ISI. Bumble (BMBL) falls 5%
after JPMorgan downgrades to underweight from neutral. Credo Technology shares (CRDO) advance 13% after the company reported revenue for the fourth quarter that beat. Dollar General (DG) rises 8% after the retailer reported first-quarter profit and sales that
topped expectations, and management boosted its comparable sales forecast for the full year. MoonLake Immunotherapeutics shares (MLTX) jump 22% after the Financial Times reported that Merck held talks to buy the Swiss biotech firm. Nuclear stocks (CEG +9%)
gain after Constellation Energy agreed to sell power from an operating nuclear plant in Illinois to Meta Platforms. Pinterest (PINS) gains 3.8% after JPMorgan raises rating to overweight from neutral. Signet Jewelers shares (SIG) climb 13% after the owner
of Kay Jewelers boosted its adjusted earnings per share forecast for the full year.

European gauges trimmed earlier declines as euro-area inflation eased more than expected. Consumer prices in the euro area rose 1.9% from a year ago in May, down from
2.2% in April and below the 2% median estimate. Core CPI slowed to 2.3% from 2.7%. The Stoxx 600 remains in the red with miners leading declines after disappointing economic data from China. Defensive sectors such as real estate and telecoms outperform. Political
turmoil in Europe is picking up again. The Dutch coalition collapsed after it failed to reach an agreement over far-right lawmaker Geert Wilders’ Freedom Party’s plan to curb migration. Among individual stocks, UBS Group AG rose 2.7% after Jefferies upgraded
the rating of the bank to buy from hold, citing a potential turning point on capital requirements. Stoxx 600 -0.2%, DAX +0.1%, CAC -0.3%, FTSE 100 +0.1%. Aero & Defense +1.3%, Real Estate +0.4%, Telecom +0.25%. Basic Resources -1.5%, Media -0.9%, Banks -0.8%.

Shares in Asia were mostly higher as investors looked ahead to a potential conversation this week between President Trump and China’s Xi Jinping to dial down the recent
flare-up in trade tensions. The MSCI Asia Pacific Index rose 0.2%, with Hong Kong leading gains. Concerns over persistent weakness in China’s economy kept a lid on sentiment, after private factory data showed the worst slump in over two years. Chinese pharmaceutical
stocks rose as a slew of recent M&A deals in the sector boosted investor sentiment. Blockchain and cross-border payment stocks in Hong Kong gained, with stablecoin legislation expected to come into effect this year that may help Hong Kong become an international
Web3 and digital finance center. South Korean markets were closed for a presidential election. Hang Seng Index +1.5%, Philippines +0.9%, Vietnam +0.8%, ASX 200 +0.6%, Taiwan +0.6%, CSI 300 +0.3%, Singapore +0.1%. Topix -0.2%, Indonesia -0.3%, Sensex -0.8%.

FIXED INCOME: 
 

Treasuries climbed after a Japanese sale of 10-year debt received ample demand. US 10-year yield eases 3 basis points to 4.41% and the curve spreads are little changed.
US session includes April JOLTS job openings and factory orders data. IG dollar new-issue slate includes NAB 3-part issue. Other potential offerings include Autodesk, which held fixed-income investor calls Monday.

METALS: 

Gold retreated from a four-week high, after gaining more than 2.5% yesterday, its biggest daily jump in four weeks. Job indicators including a report on May employment
are scheduled to be released on Friday, while markets monitor US trade negotiations. Spot gold -0.7%, Silver -1.3%, Copper -1.4%.

ENERGY:   

Oil prices rise for a second day due to supply disruptions from Canada’s wildfires, which countered OPEC’s latest supply increase. The wildfires in Alberta have shut
down almost 350,000 barrels a day of heavy crude production, more than three quarters of the amount of oil OPEC and its allies agreed to add back to the market. Oil inventories have risen sharply across the world in recent weeks, a sign of the pressure that
higher output from OPEC+ could place on the global crude market as the year progresses. Despite seasonal refinery work and low refined fuel inventories, global crude inventories are building at the fastest pace since 2020. WTI +0.8%, Brent +0.7%, US Nat Gas
+0.1%, RBOB +0.3%. 

CURRENCIES: 

In currency markets, the dollar recoups some of yesterday’s losses while the yen weakens to above 143-handle after Governor Ueda says BOJ is not pre-determined on
raising rates. The Swiss franc slipped after Swiss inflation turned negative in May, marking the first decline in consumer prices for more than four years and adding pressure on the SNB to cut its interest rate later this month. Scandinavian currencies led
losses, alongside the Aussie and kiwi dollars. The Australian and New Zealand dollars were weighed down by a survey showing China’s manufacturing sector experienced its worst slump since September 2022. The euro slips after euro-area inflation eased more than
expected, dipping below the ECB’s 2% target and supporting the case for interest rates to be lowered further. US$ Index +0.4%, GBPUSD -0.3%, EURUSD -0.4%, USDJPY +0.25%, AUDUSD -0.6%, NZDUSD -0.6%, USDCHF +0.4%, USDCAD +0.15%, USDSEK +0.7%, USDNOK +0.4%.

Bitcoin +0.4%, Ethereum +2.5%.   

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
• Advance Auto (AAP) Raised to Neutral at Redburn; PT $45
• Block (XYZ) Raised to Outperform at Evercore ISI; PT $75
• Cardinal Health (CAH) Raised to Overweight at Wells Fargo; PT $179
• Cencora (COR) Raised to Overweight at Wells Fargo; PT $337
• Kymera (KYMR) Raised to Buy at B Riley; PT $60
• Raised to Overweight at Morgan Stanley; PT $79
• Raised to Buy at BofA; PT $51
• Oshkosh (OSK) Raised to Buy at Truist Secs; PT $127
• Pinterest (PINS) Raised to Overweight at JPMorgan; PT $40
• Woodward (WWD) Raised to Buy at Deutsche Bank; PT $291
• Downgrades
• Blueprint Medicines (BPMC) Cut to Equal-Weight at Stephens; PT $135
• Cut to Market Perform at Citizens
• Cut to Hold at TD Cowen; PT $130
• Cut to Peerperform at Wolfe
• Borr Drilling (BORR) Cut to Neutral at SpareBank; PT $2
• Bumble (BMBL) Cut to Underweight at JPMorgan; PT $5
• Cemex (CEMEXCPO MM) ADRs Cut to Market Perform at Itau BBA; PT $7.50
• GSK (GSK LN) ADRs Cut to Hold at Berenberg; PT $41
• Imperial Oil (IMO CN) Cut to Sell at Desjardins; PT C$89
• InterRent REIT (IIP-U CN) Cut to Hold at Desjardins; PT C$14
• MAC Copper Ltd (MTAL) Cut to Market Perform at BMO; PT $12.25
• Parkland (PKI CN) Cut to Market Perform at BMO; PT C$42
• Rio Tinto (RIO LN) ADRs Cut to Hold at Jefferies; PT $63
• Sprout Social (SPT) Cut to Neutral at Cantor; PT $24
• Tamarack Valley Energy (TVE CN) Cut to Hold at Desjardins; PT C$5
• Whitecap Resources (WCP CN) Cut to Hold at Desjardins; PT C$10
• Initiations
• ASGN (ASGN) Reinstated Equal-Weight at Wells Fargo; PT $56
• Axsome Therapeutics (AXSM) Rated New Outperform at Oppenheimer; PT $185
• Badger Meter (BMI) Rated New Market Perform at Raymond James
• Booking (BKNG) Reinstated Buy at William O’Neil
• Cameco (CCO CN) Reinstated Buy at William O’Neil
• EVgo (EVGO) Rated New Equal-Weight at Morgan Stanley; PT $4
• Maple Leaf Foods (MFI CN) Rated New Buy at Stifel Canada; PT C$36.50
• Reckitt (RKT LN) ADRs Rated New Outperform at BNPP Exane; PT $17.30
• Reddit (RDDT) Rated New Sector Perform at RBC; PT $125
• Rubicon Organics (ROMJ CN) Rated New Overweight at Zuanic
• Salesforce Inc (CRM) Rated New Overweight at Cantor; PT $325
• Uranium Energy (UEC) Rated New Outperform at BMO; PT $7.75
• Wheaton Precious Metals (WPM CN) Rated New Buy at William O’Neil

Data sources: Bloomberg, Reuters, CQG

David Wienke