Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET EMPLOYMENT REPORT, Initial Jobless Claims, Trade Balance; 9:45ET S&P Global US Services
PMI, S&P Global US Composite PMI; 10:00ET ISM Services Index, ISM Services Prices Paid, ISM Services New Orders, ISM Services Employment, Factory Orders, Durable Goods Orders, Cap Goods Orders; 11:00ET Fed’s Bostic speaks; 1:00ET US markets close early ahead
of Independence Day holiday

Highlights and News:  

• VIETNAM SAYS TRADE NEGOTIATORS STILL WORKING ON DETAILS OF DEAL
• CHINA OPPOSES ANY TRADE DEALS THAT INFRINGE ON CHINA’S INTEREST
• US Lifts Chip Design Export Curbs on China
  
• Bessent: Warns Countries Not to Drag Out Trade Deals; Meeting with EU Negotiator Today
• TRUMP VOWS TO ENFORCE SOLAR, WIND TAX CREDIT PHASEOUTS

Global stocks are at a record high as investors await key US jobs data while a trade deal between the United States and Vietnam provided a boost. Trump’s two-tiered
trade deal with Vietnam aims squarely at practices China has long used to skirt US tariffs, including “origin washing” of exports through their ports. Investors are also closely tracking the US fiscal situation, as House Republican leaders worked urgently
to secure enough support for Trump’s massive tax and spending package, with the process moving toward a final vote. Meanwhile, the US Commerce Department informed the world’s three leading chip design software providers — Synopsys, Cadence Design Systems and
Germany’s Siemens AG — that recent requirements to seek government licenses for business in China are no longer in place.

EQUITIES:   

US equity futures are muted ahead of the shortened session today and this morning’s employment report, which is expected to show a slowdown in US hiring against the backdrop of President
Trump’s trade war. Analysts are forecasting a rise of 110,000 jobs in June with the jobless rate ticking up to 4.3%. Traders are also waiting to see if President Trump’s tax and spending bill gets passed by Congress in the next 24 hours. Speaker Mike Johnson
is confident it’ll pass shortly. Trump said Jerome Powell should resign “immediately” after FHFA head Bill Pulte urged Congress to investigate the Fed chair, alleging his Senate testimony about the central bank’s planned renovations was “deceptive.” Shares
of chip design software firms are higher in premarket trading after the US lifted export restrictions on chip design software to China, signaling a thaw in trade tensions.

Futures ahead of the data/bell: E-Mini S&P +0.1%, Nasdaq +0.1%, Russell 2000 +0.8%, DJI +0.1%.

In pre-market trading, ASML (ASML) falls 1.6% after a Nikkei Asia report that Samsung Electronics is delaying completion of a chip factory in Texas, as it struggles
to find customers for the plant’s output. Datadog (DDOG) gains 9.6% as the company will replace Juniper Networks in the S&P 500, effective prior to the opening of trading on July 9. FedEx (FDX) climbs 1.2% after being double-upgraded at BNP Paribas Exane,
with the broker saying the stock is “arguably oversold.”  Synopsys (SNPS) gains 5% and Cadence Design (CDNS) rises 5% after the US lifted export license requirements for chip design software sales in China. Xponential Fitness (XPOF) soars 20% after saying
that after cooperating with an SEC probe, the regulator concluded its investigation without action.

European gauges are modestly higher after easing from early gains ahead of a key US jobs report. The Stoxx 600 remains in the green, with insurance and financial services
stocks outperforming, while telecoms and healthcare names lagged. Siemens gained 1% and was the single biggest boost to the index, as the US lifted export license requirements for chip design software sales in China. Novartis AG edged lower as the Swiss pharma
giant’s Cosentyx missed the primary endpoint in a study. Novartis AG’s drug Cosentyx failed in a late-stage study of patients suffering from inflammation in their blood vessels, a blow to the Swiss company’s efforts to find new uses for the blockbuster medicine.
UK markets rebounded from a sharp selloff as PM Keir Starmer tried to calm speculation about the possible exit of Chancellor Rachel Reeves. Stoxx 600 +0.1%, DAX +0.1%, CAC -0.1%, FTSE 100 +0.4%. Insurance +0.9%, Financial Services +0.7%, Retail +0.5%. Telecom
-0.5%, Healthcare -0.4%, Basic Resources -0.3%. 

Shares in Asia were mostly higher, boosted by a rally in South Korean stocks and technology names in the region.  The MSCI Asia Pacific Index rose 0.4%, with Samsung
Electronics, BHP Group and TSMC among the biggest contributors. South Korea’s Kospi Index closed near four-year high after its parliament passed an amendment to Commercial Act which aims to protect the rights of minority shareholders. Chinese stocks listed
in Hong Kong led decliners around the region. China’s services activity slipped more than forecast in June to reach a nine-month low. Vietnam’s key equity index edged lower despite the announcement of a deal with the US overnight. The sharp jump in tariffs
to 40% on transshipped goods could signal more supply chain disruptions ahead. Kospi +1.3%, Thailand +1%, Philippines +0.8%, CSI 300 +0.6%, Singapore +0.2%, Topix +0.1%. ASX 200 ~flat, Indonesia -0.05%, Vietnam -0.2%, Sensex -0.2%, Hang Seng Index -0.6%.

FIXED INCOME: 
 

US Treasuries rose after heavy selling on Wednesday, when concerns about the UK’s fiscal position dragged global bond markets lower. UK long-end yields are about
10bp lower on the day. US yields are 1bp-2bp richer across a steeper curve, with 2s10s and 5s30s spreads wider by about 1bp; 10-year is near 4.26%, about 2bp richer. For the June jobs report, median estimate for nonfarm payrolls increase is 106k; Bloomberg’s
crowd-sourced whisper number is 97k.

METALS: 

Gold is steady after three days of gains, with investors awaiting crucial US jobs data this morning that could influence the Federal Reserve’s monetary easing trajectory.
Concerns persist over the US deficit, as President Trump’s expansive tax and spending bill is projected to increase national debt by $3.4 trillion over ten years. If the House passes the legislation, gold’s safe-haven allure may strengthen. Spot gold -0.3%,
Silver +0.8%, Copper -0.2%.

ENERGY:   

Oil prices edge lower after jumping 3% on Wednesday as Iran suspended cooperation with the UN nuclear watchdog. Traders will be monitoring this weekend’s OPEC+ meeting
and today’s US jobs data that will give clues about the health of the world’s largest economy. Spreads on the nearest crude contracts are pointing to tight supplies with stockpiles at the key storage hub of Cushing, Oklahoma, sliding. In Canada, a wildfire
emerged in the Fort McMurray area, close to a major oil sands production site. BlackRock is considering a sale of its stake in the leasing rights to Saudi Aramco’s natural-gas pipeline network back to the energy giant, Bloomberg News reported. WTI -0.15%,
Brent -0.2%, US Nat Gas +1.7%, RBOB is flat.    

CURRENCIES: 

In currency markets, the dollar is steady ahead of the jobs report, hovering just above a three-year low. Sterling inches higher after suffering its worst performance
among major currencies on Wednesday. The yen eased as Japan’s annual wage negotiations concluded with the largest pay increase in 34 years. The BOJ’s rate hike cycle will resume after a temporary pause, board member Hajime Takata said. The Swiss franc slipped.
Swiss consumer prices unexpectedly increased in June, providing relief to the central bank after a drop below zero prompted it to halt positive borrowing costs. US$ Index +0.03%, GBPUSD +0.2%, EURUSD -0.05%, USDJPY +0.15%, AUDUSD -0.1%, NZDUSD -0.25%, USDCHF
+0.15%, USDCAD -0.05%, USDSEK +0.25%, USDNOK +0.1%.

Bitcoin +0.5%, 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
• BioXcel (BTAI) Raised to Buy at RX Securities; PT $4
• CES Energy (CEU CN) Raised to Outperform at National Bank; PT C$10.50
• FedEx (FDX) Raised to Outperform at BNPP Exane; PT $270
• Huntington Bancshares (HBAN) Raised to Outperform at Wolfe; PT $21
• Marvell Technology (MRVL) Raised to Buy at SinoPac; PT $89
• Meta (META) Raised to Hold at Needham
• Surge Energy (SGY CN) Raised to Outperform at Raymond James; PT C$8
• UPS (UPS) Raised to Neutral at BNPP Exane; PT $100
• Valley National (VLY) Raised to Overweight at Morgan Stanley; PT $11
• Whitecap Resources (WCP CN) Raised to Strong Buy at Raymond James
• Downgrades
• BCE (BCE CN) Cut to Neutral at CIBC; PT C$33
• Imperial Oil (IMO CN) Cut to Market Perform at Raymond James; PT C$107
• MDA Space (MDA CN) Cut to Sector Perform at Scotiabank; PT C$39
• NuVista Energy (NVA CN) Cut to Market Perform at Raymond James
• NV5 (NVEE) Cut to Hold at Maxim
• PNC Financial (PNC) Cut to Peerperform at Wolfe
• Rio Tinto (RIO LN) ADRs Cut to Hold at Berenberg; PT $62
• Theratechnologies (TH CN) Cut to Hold at Jones
• Two Harbors (TWO) Cut to Market Perform at Citizens
• Initiations
• Brightstar Lottery (BRSL) Reinstated Outperform at Macquarie; PT $37
• Emerson Electric (EMR) Rated New Overweight at Oxcap; PT $151.30
• Exchange Income (EIF CN) Rated New Buy at Desjardins; PT C$73
• Prairie Operating (PROP) Rated New Sector Weight at KeyBanc
• Primoris Services (PRIM) Rated New Buy at Janney Montgomery; PT $102
• Ralliant (RAL) Rated New Underperform at BofA; PT $48
• Telix Pharma (TLX AU) ADRs Rated New Buy at HC Wainwright; PT $23

Data sources: Bloomberg, Reuters, CQG

David Wienke