Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Philadelphia Fed Non-Manufacturing Activity, Current Account Balance; 9:00ET FHFA
House Price Index; 9:15ET Fed’s Hammack speaks; 10:00ET Richmond Fed Manufact. Index, Richmond Fed Business Conditions, Conf. Board Consumer Confidence, Conf. Board Present Situation, Fed’s Powell speaks; 12:30ET Fed’s Williams speaks; 1:00ET 2-Year Auction;
1:45ET Fed’s Kashkari speaks; 4:00ET Fed’s Barr speaks

Highlights and News:  

• Israel Accuses Iran of Breaching Truce Trump Said Was in Effect
• QATAR SAYS ISRAEL ATTACK ON IRAN COMPLICATED GAZA TRUCE TALKS
• TRUMP ASKED ABOUT CEASEFIRE: I THINK THEY BOTH VIOLATED IT
• TRUMP: DON’T WANT TO SEE REGIME CHANGE
• ZELENSKIY, TRUMP MEETING PLANNED FOR WEDNESDAY: AFP
• Iraq Says Drones Attacked Military Bases Overnight
• Trump Calls for Rate Cuts Before Powell Testimony

Global stocks surged after President Trump said a ceasefire between Israel and Iran was in place, following Iran’s token retaliation against a US military base and
signaled it was done for now. Prime Minister Netanyahu confirmed Israel agreed to a truce as long as Iran did not launch further attacks, and said his country’s achieved its war goals in Iran. Hours later, Israel accused Iran of breaking the ceasefire, while
Tehran denied firing missiles at Israel after the truce. Trump later said Israel to him they will not attack Iran, and the ceasefire is back in effect. On trade, two sources told Reuters that Japan’s tariff negotiator was arranging his seventh visit to the
United States for as early as June 26.  

EQUITIES:   

US equity futures are maintaining gains as a ceasefire announced by President Trump between Israel and Iran faces early challenges, with accusations of a violation following a missile
strike into Israel. Trump ordered Israel to stop dropping bombs on Iran, calling it a “major violation” and telling both countries to “calm down”. Meanwhile, markets are awaiting Fed Chair Jerome Powell’s testimony before the House Financial Services Committee
later today. So far, Powell has remained cautious about signaling any near-term rate cuts. Senate Republicans are coming around to the $40,000 cap on state and local tax deduction key House lawmakers demand in President Trump’s massive tax package, but they
want to lower the income threshold. In corporate news, Starbucks denied a Caixin report that it’s considering the full sale of its China business. Tesla’s robotaxis are under scrutiny after they appeared to violate traffic laws during their first day offering
paid rides. Jensen Huang started selling Nvidia stock as part of a $865 million plan.

Futures ahead of the bell: E-Mini S&P +0.7%, Nasdaq +0.9%, Russell 2000 +0.8%, DJI +0.6%.

In pre-market trading, Airline stocks are higher, and energy shares lower after President Trump’s ceasefire announcement, spurring optimism over a potential easing
of airspace disruptions in the Middle East. Circle Internet Group (CRCL) fell 1.9% after the stablecoin issuer was initiated at Compass Point Research & Trading with a recommendation of neutral as competition is expected to increase after US stablecoin legislation
was passed. CommScope shares (COMM) are up 2.2%, after Deutsche Bank added the communications equipment company to its catalyst call-buy list. Lyft shares (LYFT) rise as much as 5.4% as TD Cowen raised to buy from hold citing multiple growth levers. Mastercard (MA
+2.7%) deepens its partnership with Fiserv (FI +4.4%) to integrate its new FIUSD token across a range of Mastercard products and services. NextDecade Corp. (NEXT) gains 4.6% after TD Cowen raised the recommendation to buy from hold. Teladoc Health (TDOC) rises
5.2%, putting the stock on track to extend gains after Citron Research said the market is underestimating the value of the virtual health-care platform. Tesla (TSLA) is outperforming fellow Magnificent 7 stocks, rising 2.2%, after launching its much-anticipated
driverless taxi service to a handful of riders. Uber Technologies (UBER) rose 3.5% as it’s set to begin offering its customers driverless Waymo rides in Atlanta.

European gauges rallied, lifted by airline shares, after President Trump announced a ceasefire between Iran and Israel, easing worries about a prolonged conflict. Europe’s
Stoxx 600 gained 1.3% in early trade, with travel stocks leading the rally. EasyJet Plc rose 6%, TUI AG advanced 6.9% and IAG SA was 5.8% higher. Energy stocks are the biggest laggards as oil prices extended Monday’s declines. The DAX outperforms. German companies
are the most optimistic about the economy in over two years, driven by an expected boost in public spending. An expectations index by the Ifo institute rose to 90.7 in June, better than anticipated, and the highest since April 2023. Germany will borrow about
a fifth more than planned in the coming months to fund a surge in spending. Among individual stocks, Lindt & Spruengli AG shares fell as much as 4.4% after Bank of America analysts downgraded the chocolate maker to neutral from buy. Holcim Ltd. advanced 6.5%
after Morgan Stanley upgraded the stock following its US unit spinoff.  Stoxx 600 +1.2%, DAX +1.7%, CAC +1.1%, FTSE 100 +0.3%. Travel & Leisure +3.8%, Construction +3.2%, Banks +2.7%, Retail +1.9%. Energy -1.9%.

Shares in Asia were broadly higher, led by technology shares, with an immediate rotation back into growth stocks and away from sectors such as oil and defense. The
MSCI Asia Pacific Index jumped 2.3%, the most since April 10. Semiconductor names including TSMC, Samsung Electronics and SK Hynix were the top contributors. South Korea’s benchmark Kospi index surged 3%, extending its outperformance to Asian peers this year.
Kospi’s year-to-date advance is over 29%, about 19 percentage points more than the MSCI Asia Pacific Index’s 2025 gain. Index provider MSCI Inc. is scheduled to release its market reclassification report today, which includes status changes. Investors are
watching to see if it adds South Korea to the watchlist for an upgrade to developed-market status. Thailand +3.5%, Kospi +3%, Taiwan +2.1%, Hang Seng Index +2.1%, Indonesia +1.2%, Philippines +1.2%, CSI 300 +1.2%, Nikkei 225 +1.1%, ASX 200 +0.95%, Vietnam
+0.6%, Sensex +0.2%.

FIXED INCOME: 
 

Treasuries are narrowly mixed with the yield curve steeper in early US session. 10-year Treasury yield is steady around 4.345%, having declined 5 bps overnight. 2s10s
and 5s30s spreads wider by 2bp-3bp, extending Monday’s move. 5s30s spread topped at 99.98bp, approaching year’s high 100.9bp, reached May 22.  The Fed’s Bostic said that inflation remains a risk, and he sees a need for just one 25bps cut in late 2025. Fed
Vice Chair for Supervision Michelle Bowman said the time to cut interest rates was getting nearer as risks to the job market may be on the rise. Fed Chair Jerome Powell will have his own chance to comment when appearing before Congress later today. Treasury
auction cycle starts with $69 billion 2-year note sale and includes $70 billion 5-year Wednesday and $44 billion 7-year Thursday. 

METALS: 

Gold fell over 1% to a two-week low after Trump’s announcement of a ceasefire between Israel and Iran diminished bullion’s safe-haven appeal. Investors will closely
monitor Fed Chair Jerome Powell’s testimony to the US Congress later today, looking for clues about the US interest rate path. Spot gold -1.4%, Silver +0.1%, Copper +1.3%.

ENERGY:   

Oil continued to decline, reaching a two-week low overnight, after Israel accepted Trump’s ceasefire proposal with Iran, easing concerns about Middle East supply
disruptions. Oil prices pared some losses after Israel accused Iran of breaching the ceasefire. Crude plunged yesterday when it became clear the strikes on Qatar weren’t deadly, with traders taking it as a sign that Iran had no intention of escalating tensions
with Washington. Escalating tensions in the Middle East has removed some focus from Trump’s tariffs war, which threatens to dampen global economic growth. WTI -3.5%, Brent -3.5%, US Nat Gas -1.7%, RBOB -3%. 

CURRENCIES: 

In currency markets, the dollar dropped after the announcement of a ceasefire and hit fresh session lows even after Israel accused Iran of breaching the agreement.
Following dovish comments from Fed Vice Chair Michelle Bowman, traders turn focus to Chair Jerome Powell’s testimony before Congress later today. The yen and euro benefited from the slide in oil prices as both the EU and Japan rely heavily on imports of oil
and liquefied natural gas. The PBOC set the strongest yuan fixing since November as the dollar fell. US$ Index -0.4%, GBPUSD +0.6%, EURUSD +0.2%, USDJPY -0.75%, AUDUSD +0.7%, NZDUSD +0.8%, USDCHF -0.5%, USDCAD -0.15%, USDSEK -0.7%, USDNOK +0.1%.

Bitcoin +1.4%, Ethereum +2.8%.   

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
• Artemis Gold (ARTG CN) Raised to Buy at Paradigm Capital; PT C$32
• Capital Southwest (CSWC) Raised to Market Outperform at Citizens
• Electronic Arts (EA) Raised to Buy at Roth Capital Partners; PT $185
• Essex Property (ESS) Raised to Outperform at Raymond James; PT $315
• Exelixis (EXEL) Raised to Overweight at Stephens; PT $60
• Lyft (LYFT) Raised to Buy at TD Cowen; PT $21
• MakeMyTrip (MMYT) Raised to Outperform at Macquarie; PT $110
• New Oriental Education (EDU) ADRs Raised to Overweight at JPMorgan
• NextDecade (NEXT) Raised to Buy at TD Cowen; PT $11
• Downgrades
• Advance Auto (AAP) Cut to Sell at Goldman; PT $46
• Alibaba (BABA) ADRs Cut to Neutral at Arete; PT $153
• Couchbase (BASE) Cut to Neutral at Stifel; PT $24.50
• Dollar General (DG) Cut to Neutral at Goldman; PT $116
• JD.com (JD) ADRs Cut to Neutral at Arete; PT $45
• Lundin Gold (LUG CN) Cut to Sector Perform at National Bank; PT C$89
• Mid-America (MAA) Cut to Market Perform at Raymond James
• Ollie’s Bargain (OLLI) Cut to Hold at Loop Capital; PT $130
• Oscar Health (OSCR) Cut to Market Perform at Raymond James
• RH (RH) Cut to Sell at Goldman; PT $179
• SM Energy (SM) Cut to Underperform at Raymond James
• Vital Energy (VTLE) Cut to Underperform at Raymond James
• Initiations
• A O Smith Corp (AOS) Rated New Neutral at JPMorgan; PT $70
• Alaris Equity Partners (AD-U CN) Rated New Outperform at Raymond James
• Allegion (ALLE) Rated New Overweight at JPMorgan; PT $170
• Amrize (AMRZ) Rated New Buy at Truist Secs; PT $60
• Rated New Neutral at UBS; PT $53
• Amylyx Pharmaceuticals (AMLX) Rated New Buy at Guggenheim; PT $17
• Armstrong World (AWI) Reinstated Overweight at JPMorgan; PT $200
• Avidity Biosciences (RNA) Rated New Outperform at Bernstein; PT $50
• Backblaze (BLZE) Reinstated Market Outperform at Citizens; PT $7
• Cardiff Oncology Inc (CRDF) Rated New Hold at Jefferies; PT $3.50
• Carlisle (CSL) Rated New Overweight at JPMorgan; PT $500
• Ceribell (CBLL) Rated New Buy at BTIG; PT $30
• Circle Internet (CRCL) Rated New Neutral at Compass Point; PT $205
• CSW Industrials (CSW) Rated New Neutral at JPMorgan; PT $320
• Dyne Therapeutics (DYN) Rated New Market Perform at Bernstein; PT $13
• EQT Corp (EQT) Rated New Buy at Roth Capital Partners; PT $69
• Group 1 Automotive (GPI) Rated New Hold at Benchmark
• Kratos (KTOS) Rated New Buy at Stifel; PT $52
• Mettler-Toledo (MTD) Rated New Overweight at Barclays; PT $1,325
• Montrose Environmental (MEG) Rated New Buy at Clear Street; PT $34
• Qiagen (QIA GR) Rated New Overweight at Barclays; PT $55
• Repligen (RGEN) Rated New Overweight at Barclays; PT $150
• Teledyne (TDY) Reinstated Buy at Stifel; PT $626
• Texas Instruments (TXN) Rated New Buy at GF Securities; PT $240
• West Pharma (WST) Rated New Equal-Weight at Barclays; PT $245
• Zedcor Inc (ZDC CN) Rated New Outperform at National Bank; PT C$5

Data sources: Bloomberg, Reuters, CQG

David Wienke