Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET PCE Price Index, Core PCE Price Index, Personal Income, Personal Spending; 9:15ET
Fed’s Hammack, Cook speak; 10:00ET U. of Mich. Sentiment; 11:00ET Kansas City Fed Services Activity

Highlights and News:  

• Stocks Gain After US-China Confirm Deal Reached
  
• BESSENT: NOW OUR TARIFFS ARE 30% ON CHINA, THEIRS ARE 10%
• White House plans to reach agreements with 10 major trading partners soon
• BESSENT: COULD HAVE TRADE WRAPPED UP BY US LABOR DAY
• US says deal with Beijing will expedite rare earth exports from China
• Semiconductor sector now reflects a record 12.1% of the S&P 500’s total market value
• Fed projected to turn profitable in 2026 after three years of losses
• Brazil supreme court rules digital platforms are liable for users’ posts
• Iran Dismisses US Claim of Nuclear Talks Resuming Next Week

Global stocks gained, with MSCI’s global shares index at a new high, as the US moved closer to trade deals with China and other major trading partners. China and
the US confirmed details of a trade framework, with China to review and approve eligible applications for export of controlled items and the US to cancel restrictive measures taken against China. The agreement codifies terms laid out in trade talks, including
China’s commitment to deliver rare earths, with both sides aiming to promote stable economic and trade ties. Meanwhile, Iran denied that nuclear talks with the US are scheduled to resume, diminishing prospects for diplomacy after President Trump suggested
a deal could come as early as next week. Next week’s key focal points include inflation data in South Korea, Indonesia and the Philippines as well as a US jobs report.

EQUITIES:   

US equity futures rise after the US and China finalized an understanding on trade. Commerce Secretary Howard Lutnick also indicated the US has plans to reach agreements with 10 major
trading partners in the coming week. Lutnick didn’t specify which nations would be part of that first wave of trade pacts. The Treasury Department has announced a deal with G-7 allies to exclude US companies from some taxes imposed by other countries in exchange
for removing the Section 899 “revenge tax” proposal from President Trump’s tax bill. Nike shares gained as much as 11% pre-market after an upbeat earnings call rekindled enthusiasm about the company’s turnaround efforts. The Fed’s preferred inflation gauge
— the core PCE price index — is expected to hold at 0.1% in May, with tariff pass-through partly offset by disinflation in services.

Futures ahead of the bell/data: E-Mini S&P +0.35%, Nasdaq +0.45%, Russell 2000 +0.45%, DJI +0.35%.

In pre-market trading, Amazon (AMZN) leads gains in the Magnificent Seven stocks, rising 1.2%, after receiving an upgrade from BNP Paribas Exane. Atlantic Union Bankshares
(AUB) surged 9.3% after the bank said it sold about $2 billion of its performing commercial real estate loans to Blackstone. Estee Lauder (EL) is up 2.9% after HSBC raised its recommendation to buy from hold and increased its price target to $99 from $80 as
it sees the cosmetics company at the end of a downgrade cycle. Li Auto ADRs (LI) drop 2.7% after the Chinese EV maker reduced its vehicle deliveries target for the second quarter, citing a sales system upgrade. Nike shares (NKE) rise 10% after forecasting
a smaller-than-expected drop in revenue for the current quarter, a sign that the sportswear company’s earnings trend may have hit an inflection point, analysts say. WR Berkley Corp. (WRB) edges down 0.7% after a TD Cowen analyst cut its recommendation to hold
from buy. Trade Desk (TTD) gains 3.2% as Evercore ISI Group upgrades from In-Line to Outperform and maintains the price target from $90.

European gauges gained as the US gets closer to reaching agreements with its major trading partners. The Stoxx 600 climbed almost 1% and is set for its first weekly
advance in three. Most sectors are in the green with auto, media and consumer products leading while miners lag. Data showed inflation inched up in France and Spain but not enough to worry ECB officials who remain confident in sustainably achieving their 2%
target this year. Among individual movers in Europe, sportswear stocks including Adidas AG, Puma SE and JD Sports Fashion rose after Nike’s fourth-quarter revenue beat expectations and said its yearlong sales decline is starting to ease. Knorr-Bremse fell
over 5% after its rating was downgraded at Citi and JPMorgan. Schneider Electric gained over 5% after reaffirming its full-year guidance. Stoxx 600 +0.9%, DAX +0.8%, CAC +1.4%, FTSE 100 +0.6%. Autos +1.9%, Media +1.6%, Industrial Goods +1.3%, Basic Resources
+0.1%. 

Shares in Asia were mostly higher, helped by positive developments on US-China trade and bets on Federal Reserve interest-rate cuts. The MSCI Asia Pacific Index rose
0.4%, with Xiaomi providing a boost as the release of its electric SUV saw strong demand. Japanese stocks led gains while South Korea and China lagged. Inflation in Tokyo slowed for the first time in four months, though remains above the Bank of Japan’s 2%
target. China’s industrial profits plummeted in May compared to the previous year, as factory activity weakened amid widespread economic pressures. Profits at China’s industrial firms fell 9.1%, snapping a two-month growth streak, National Bureau of Statistics
data showed. South Korea’s EV battery stocks, declined after an official at CATL, the world’s largest player in the sector, said overseas expansion is its top priority. Thai stocks dropped the most in the region, dragged by concerns about domestic political
turmoil ahead of a major anti-government rally. Nikkei 225 +1.4%, Philippines +1.2%, Singapore +0.7%, Vietnam +0.4%, Taiwan +0.4%, Sensex +0.35%. Hang Seng Index -0.2%, ASX 200 -0.4%, CSI 300 -0.6%, Kospi -0.7%, Thailand -2.2%.

FIXED INCOME: 
 

Treasures fall for the first time this week, pushing US 10-year yields up 3 bps to 4.27%, tracking similar downside price action in European bonds following Spanish
and French CPI prints. Individual investors in Japan are boosting their purchases of government bonds at the fastest pace in 18 years. The US session features May personal income and spending data, including PCE price indexes, and early month-end flows may
support long-end tenors. The swaps market has fully priced two further rate reductions this year and increased bets on a third. 2s10s spread is +0.5bp; 5s30s -0.5bp.

METALS: 

Spot gold falls ~1.5% and below $3,280/oz as demand for haven assets dwindles while investors awaited US inflation data for clues on the future trajectory of interest
rates. Some of the inflationary effect of tariffs may just be delayed, Minneapolis Fed Bank President Neel Kashkari said. A White House official said on Thursday that the U.S. has reached an agreement with China on how to expedite rare earths shipments to
the US.  Spot gold -1.4%, Silver -1.7%, Copper -0.9%.

ENERGY:   

Oil prices edge higher though they are headed for the biggest weekly decline in two years. OPEC+ group will make production decision directly at the July 6 meeting
– Russia’s deputy PM said. China hiked its imports of crude oil from Iran in June as independent Chinese refiners bought more discounted Iranian barrels. WTI +0.6%, Brent +0.5%, US Nat Gas +3%, RBOB -0.2%. 

CURRENCIES: 

In currency markets, the dollar is little changed while headed for its worst week in five as traders focus on the release of the Federal Reserve’s preferred measure
of inflation due this morning for further policy cues. The Swedish krona is leading gains against the dollar among the G-10’s. Taiwan’s dollar erased gains in a sharp move after surging past 29 per US dollar for the first time in three years. The euro is up
for a seventh straight day, its longest winning streak in a year. Sterling is up 2.2% this week, the best performance since early March. US$ Index +0.1%, GBPUSD +0.05%, EURUSD +0.1%, USDJPY +0.1%, AUDUSD -0.2%, NZDUSD +0.1%, USDCHF -0.2%, USDCAD +0.1%, USDSEK
-0.25%, USDNOK -0.15%.

Bitcoin -0.7%, Ethereum -0.1%.   

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
• Affiliated Managers (AMG) Raised to Buy at Goldman; PT $218
• Alphabet (GOOGL) Raised to Market Outperform at Citizens; PT $220
• Amazon (AMZN) Raised to Outperform at BNPP Exane; PT $254
• Autodesk (ADSK) Raised to Buy at Berenberg; PT $365
• Boeing (BA) Raised to Buy at Rothschild & Co Redburn; PT $275
• CAE (CAE CN) Raised to Outperform at CIBC; PT C$44
• Estee Lauder (EL) Raised to Buy at HSBC; PT $99
• Franklin Resources (BEN) Raised to Buy at Goldman; PT $29
• New Oriental Education (EDU) ADRs Raised to Buy at Citi; PT $77
• Nike (NKE) Raised to Buy at HSBC; PT $80
• Trade Desk (TTD) Raised to Outperform at Evercore ISI
• WisdomTree (WT) Raised to Neutral at Goldman; PT $11.90
• Downgrades
• AllianceBernstein (AB) Cut to Neutral at Goldman; PT $40
• Alphabet (GOOGL) Cut to Neutral at BNPP Exane; PT $172
• Bank of America (BAC) Cut to Neutral at Baird; PT $52
• JPMorgan (JPM) Cut to Underperform at Baird; PT $235
• Tal Education (TAL) ADRs Cut to Neutral at Citi; PT $11.54
• Uber (UBER) Cut to Hold at Canaccord; PT $84
• Verve Therapeutics (VERV) Cut to Market Perform at BMO; PT $13.50
• W R Berkley Corp (WRB) Cut to Hold at TD Cowen; PT $78
• Initiations
• A10 Networks (ATEN) Rated New Buy at Deutsche Bank; PT $22
• AltaGas (ALA CN) Rated New Buy at TD Cowen; PT C$45
• Armada Hoffler (AHH) Rated New Buy at Jefferies; PT $8
• Arq Inc (ARQ) Rated New Buy at Fearnley; PT $9.50
• Atco /Canada (ACO/X CN) Rated New Hold at TD Cowen; PT C$56
• Canadian Utilities (CU CN) Rated New Hold at TD Cowen; PT C$40
• Costamare (CMRE) Rated New Hold at Fearnley; PT $9.80
• Emcor (EME) Rated New Outperform at Baird; PT $560
• Emera (EMA CN) Rated New Buy at TD Cowen; PT C$69
• Fortis (FTS CN) Rated New Buy at TD Cowen; PT C$74
• Full Truck Alliance (YMM) ADRs Rated New Buy at EA Qianhai Securities
• Hydro One (H CN) Rated New Hold at TD Cowen; PT C$52
• James Hardie (JHX AU) ADRs Rated New Outperform at William Blair
• Pinterest (PINS) Rated New Buy at President Capital Management; PT $41
• Republic Bancorp (RBCAA) Rated New Market Perform at Raymond James
• S&T Bancorp (STBA) Rated New Market Perform at Hovde Group; PT $41
• Stellantis (STLA) Rated New Neutral at Grupo Santander; PT $10.89

Data sources: Bloomberg, Reuters, CQG

David Wienke