Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30et CPI*; 10:30ET Treasury Sec Bessent before House Ways & Means Committee; 1:00ET 10-Year
Note Auction

At 8:05ET – Trump post – OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA.
LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR
YOUR ATTENTION TO THIS MATTER!

Highlights and News:  

• US MAY CORE CPI RISES 0.1% M/M; EST. +0.3%; RISES 0.1% M/M; EST. +0.2%
• US, China Officials Agree on Plan That Awaits Xi, Trump Sign-Off
• Trump Says Deal With China is Done; tariffs on both countries remain at or above pre-trade war levels
• Lutnick: deal should resolve rare earth minerals, magnet curbs
  
• Musk says some of his posts about Trump ‘went too far’
• Authorities in Los Angeles carried out mass arrests after the mayor imposed a curfew
• CHINA VOWS TO ENHANCE COOPERATION WITH US
• Trump Tariffs Can Stay in Effect Longer, Appeals Court Says
  

Global stocks nudged higher in guarded response to the latest signs of progress in trade talks, as investors wait for more details.  The US and China have “agreed
a framework on trade” that would be taken back to their leaders. China and US should further make good use of trade negotiation mechanism to continuously enhance consensus, reduce misunderstandings, and strengthen cooperation, state broadcaster China Central
Television reports, citing Vice Premier He Lifeng. Lutnick said the agreement reached in London would remove restrictions on Chinese exports of rare earth minerals and magnets and some of the recent U.S. export restrictions “in a balanced way.” The EU believes
trade negotiations with the US could extend beyond Trump’s July 9 deadline and sees reaching an agreement on the principles of a deal by July 9 as a best-case scenario. The US is expected to respond to the latest round of negotiations in the coming days and
provide clarity on the next steps.

EQUITIES: 

US equity futures were showing limited response after the US and China negotiators reached a preliminary agreement to de-escalate trade tensions.
Futures reverse small losses to trade firmer after the CPI data came in friendly. China signaled willingness to continue trade negotiations following talks in London. Meanwhile, a federal appeals court has allowed President Trump to continue enforcing
his global tariffs. Futures edged lower, while investors turned their focus to a key inflation reading. Median forecasts are for the headline consumer price index to rise 0.2% and the core 0.3%, which would nudge the annual rates up to 2.5% and 2.9%, respectively.
Tesla shares advanced 1.5% premarket after CEO Elon Musk also said he regrets some of the posts he made last week about Trump.  Tesla set June 22 as a tentative launch date for its robotaxi service.  Shares of companies involved in quantum computing rose in
pre-market trading after Nvidia CEO Jensen Huang turned more bullish on the sector.  Lockheed Martin faces a setback as the US Air Force halved its F-35 request to Congress to 24 jets. Oracle, RH, Dollarama and Chewy report earnings today. Trump Says Deal
With China is Done; tariffs on both countries remain at or above pre-trade war levels.

Futures after of the CPI data: E-Mini S&P +0.4%, Nasdaq +0.5%, Russell 2000 +1.1%, DJI +0.2%.

In pre-market trading, Steel stocks fall as the US and Mexico close in on a deal that would remove 50% tariffs on steel imports up to a certain volume. Cleveland-Cliffs
(CLF) drops 5%, Nucor (NUE) -3%, Steel Dynamics (STLD) -1.6%. Chewy Inc. (CHWY) falls 6% after the pet food company posted first quarter results. Dave & Buster’s (PLAY) gains 6% after commentary that sales are improving, reassured analysts, even as the restaurant
and entertainment company’s first-quarter results came in lighter than expected. Etsy (ETSY) falls 3% after the online marketplace announced a proposed private offering of $650 million of convertible senior notes GameStop (GME) declines 5% after the video-game
retailer posted a 17% decrease in 1Q net sales. Getty Images (GETY) jumps 5% after Shutterstock shareholders approved their merger agreement. Shutterstock (SSTK) gains 5%. Lockheed Martin Corp. (LMT) slips 2% after the Air Force has cut in half its request
to Congress for its signature F-35s.

Russell 2000 futures have major resistance at the 2184 area.

European gauges are steady as investors awaited confirmation of progress in US-China trade talks and looked forward to a reading on American inflation. The European
Union believes trade negotiations with the US will extend beyond Trump’s July 9 deadline, even as the speed of the talks has increased over the past week.  Stoxx 600 is slightly lower as gains in banks are offset by losses in retail shares. Nvidia announced
a raft of projects to bolster AI infrastructure in Europe, including an expanded tie-up with Mistral. Strategists at Barclays see further tailwinds for small caps including positive EU economic surprises and improving credit transmission. Stoxx 600 -0.1%,
DAX +0.2%, CAC -0.1%, FTSE 100 +0.1%. Banks +0.5%, Personal Goods +0.3%. Retail -1.6%, Real Estate -0.6%, Healthcare -0.4%.

Shares in Asia rose, with sentiment lifted by a preliminary deal between the US and China to de-escalate trade tensions. Officials are expected to take the latest proposal
back to their respective leaders in Washington and Beijing. The MSCI Asia Pacific Index rose 0.3%, for a third day of gains. Chip stocks provided the biggest boost after TSMC posted a 40% increase in May revenue, in a sign of resilient AI demand. Most regional
gauges were in the green. Shares in South Korea led gains, while the benchmark CSI 300 Index climbed the most in nearly a month. Chinese defense stocks gained after a key customer, Pakistan, unveiled plans to raise its defense budget by 17%. Taiwanese insurance
stocks drop after four of six of the biggest life insurers reported a widened after-tax losses in May. Kospi +1.2%, Taiwan +1%, Hang Seng Index +0.8%, CSI 300 +0.8%, Nikkei 225 +0.5%, Philippines +0.5%, Thailand +0.2%, Sensex +0.15%, ASX 200 was little changed.
Vietnam -0.1%, Indonesia -0.1%, Singapore -0.4%. 

FIXED INCOME: 
 

Treasuries decline ahead of CPI data, with US 10-year yields rising 3 bps to 4.50%. Gilts lead a selloff in European government bonds, pushing UK 10-year yields up
~6 bps to 4.60%. Bunds pare declines after solid demand at a 10-year auction.  US yields are 1bp-4bp cheaper across a steeper curve, with 2s10s and 5s30s spreads +1bp.  Treasury auction cycle continues with $39 billion 10-year reopening, before concluding
Thursday with $22 billion bond reopening. WI 10-year yield near 4.50% is ~16bp cheaper than last month’s strong new-issue sale which stopped through by 1.2bp.

METALS: 

Gold inched up as investors reassessed trade relations between the US and China after a high-level meeting in London and trimmed their bets before a key US inflation
report. Gold has overtaken the euro as the world’s second most important reserve asset for central banks, driven by record purchases and soaring prices, according to the European Central Bank. Spot gold +0.3%, Silver -1%, Copper -2.1%.

ENERGY:   

Oil prices caught a bid as investors weigh the possibility of US-Iran nuclear talks falling apart. Trump told the NYP that he’s getting “less confident” about nuclear
talks with Iran. Iran’s semi-official Tasnim news agency said that the country is urging the IAEA to remain professional without heeding to “political pressures.” Though trade-related downside risk has subsided for oil, the market reaction has been subdued
as uncertainties remain about economic growth and oil demand impacts, Reuters reported, citing analysts. Oil extended gains after the Trump tweet that he considers the deal with China done. WTI +1.7%, Brent +1.4%, US Nat Gas +2.2%, RBOB +0.8%. 

CURRENCIES: 

The reaction in currency markets was muted as teams from the US and China concluded trade talks in London, hinting at a thaw in the trade war but offering scant detail. 
The dollar steadied ahead of inflation data, while sterling fluctuated ahead of a British government spending review. China’s onshore yuan was little changed. The yen slipped as Japan has no plans to buy back government bonds in July and speculation of this
is unrealistic, the finance ministry said. US$ Index -0.03%, GBPUSD -0.05%, EURUSD +0.05%, USDJPY +0.3%, AUDUSD -0.3%, NZDUSD -0.4%, USDCHF -0.05%, USDCAD +0.1%, USDSEK +0.1%, USDNOK +0.1%.

Bitcoin -0.5%, Ethereum +0.2%. Peter Thiel-backed crypto exchange Bullish confidentially filed for a US IPO, the FT reported.   

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
• First Solar (FSLR) Raised to Buy at Jefferies; PT $192
• J M Smucker (SJM) Raised to Buy at Jefferies; PT $115
• Micron (MU) Raised to Hold at GF Securities; PT $116
• Urban Outfitters (URBN) Raised to Outperform at Baird; PT $90
• Downgrades
• Arista Networks (ANET) Cut to Neutral at BNPP Exane; PT $106
• BILL Holdings Inc (BILL) Cut to Equal-Weight at Morgan Stanley; PT $55
• Etsy (ETSY) Cut to Sell at Arete; PT $43
• Ingram Micro (INGM) Cut to Equal-Weight at Morgan Stanley; PT $22
• Sunrun (RUN) Cut to Underperform at Jefferies; PT $5
• UnitedHealth (UNH) Cut to Neutral at Baird
• Initiations
• American Superconductor (AMSC) Rated New Buy at Clear Street; PT $44
• Avidity Biosciences (RNA) Reinstated Strong Buy at Raymond James
• Boyd Group Services (BYD CN) Rated New Overweight at Stephens; PT C$240
• Celestica (CLS CN) Rated New Outperform at BNPP Exane; PT C$205.17
• Coinbase (COIN) Rated New Outperform at William Blair
• Core Natural Resources (CNR) Rated New Buy at UBS; PT $80(Earlier)
• DoorDash (DASH) Rated New Hold at Stifel
• Gold Royalty (GROY) Rated New Buy at Canaccord; PT $3
• Mineralys Therapeutics (MLYS) Rated New Hold at Jefferies; PT $15
• Pharvaris (PHVS) Rated New Buy at Guggenheim; PT $32
• Summit Therapeutics (SMMT) Rated New Underperform at Leerink; PT $12
• TD SYNNEX (SNX) Rated New Overweight at Morgan Stanley; PT $145
• Uber (UBER) Rated New Buy at Stifel
• Western Copper (WRN CN) Rated New Buy at Stifel Canada; PT C$5.50

Data sources: Bloomberg, Reuters, CQG

David Wienke