Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Jobless Claims, Chicago Fed Nat Activity Index; 9:45ET July S&P Global Manufacturing,
Services, and Composite PMIs; 10:00ET New Home Sales; 11:00ET Kansas City Fed Mfg Activity; 1:00ET US to sell $21 billion 10-year TIPS; 4:00ET Trump to visit the Federal Reserve

ECB: INFORMATION BROADLY IN LINE WITH INFLATION ASSESSMENT; ECB TO FOLLOW DATA-DEPENDENT, MEETING-BY-MEETING APPROACH

Highlights and News:  

• ECB expected to pause rate cutting cycle; One more rate cut seen as likely by year-end
• Columbia University to pay US government over $200 million to resolve Trump probes
• Trump to Tour Fed Construction Site Today
• Trump Says Countries Will Face Tariffs Ranging From 15% to 50%
• Musk Warns of ‘Rough’ Patch Amid Dismal Sales

Trade deal optimism lifted world stocks to fresh record highs, with the MSCI’s broadest index of world equities gaining for a seventh straight day. Britain and India
signed a landmark free trade agreement eliminating tariffs on products ranging from cars to alcohol. Meanwhile, the US and South Korea have discussed creating a fund to invest in American projects as part of a trade pact. Focus is also on the European Central
Bank’s final meeting before the summer break, where it is expected to pause after seven consecutive rate cuts as it waits for the fog surrounding Europe’s trade relations with the United States to clear. The European Commission president cautioned Chinese
leader Xi Jinping that EU-China relations were at an “inflection point.”  Tensions rose ahead of high-stakes trade talks in Beijing, following EU sanctions on Chinese banks accused of breaching a Russia trade embargo. Some Canadian senior officials say it’s
time to repair trade relations with China, arguing US tariff policy is pushing them to engage with Asia’s largest economy. Russia and Ukraine held brief peace talks, but the warring countries remain far apart with little progress made.

EQUITIES:   

US equity futures are mixed with S&P futures hovering near a record high on strong Alphabet earnings and reported progress toward US-EU trade deal. US trading partners will face tariffs
ranging from 15% to 50%, Trump said, as he sets rates ahead of an August 1 deadline. Delegations from the US and China are due to hold negotiations in Stockholm next week for their third round of trade talks. South Korea will propose at least $100 billion
of investment in the US to reach a trade deal, Yonhap reported. Nasdaq 100 futures got a lift after Alphabet said demand for AI boosted quarterly sales. Tesla shares fell overnight as the automaker reported one of its most difficult quarters in over a decade,
marked by a second consecutive revenue slide. Musk warned of a “few rough quarters” ahead for Tesla.

Futures ahead of the bell: E-Mini S&P +0.1%, Nasdaq +0.3%, Russell 2000 -0.3%, DJI -0.5%.

In pre-market trading, Alphabet (GOOGL) rises 3.6% after reporting second-quarter results that beat expectations with its cloud-computing unit delivering an almost
32% jump in second-quarter revenue. American Airlines (AAL) falls 4% after the carrier reinstated its forecast this year, providing a wide range of possible outcomes. American Eagle (AEO) is up 16%, putting the stock on track to extend gains, after the apparel
retailer announced a campaign headlined by actress Sydney Sweeney. ASGN (ASGN) rises 8% after the IT services company reported second-quarter results that beat expectations. Blackstone (BX) rises 2% after reporting a 25% jump in distributable earnings for
the second quarter. Community Health Systems Inc. (CYH) sinks 29% after the owner and operator of hospitals cut the top end of its year forecast range for adjusted Ebitda and announced the retirement of its CEO.  IBM shares fell over 5% after reporting second-quarter
results that featured a disappointing read on its software business.  Dow (DOW) slumps 9% after the chemicals producer reported earnings for the second quarter that missed estimates and cut it’s dividend. Las Vegas Sands (LVS) climbs 6% after the casino and
resorts operator reported a beat. MaxLinear (MXL) soars 25% after the semiconductor device company reported second-quarter results that beat expectations and gave a forecast. Mobileye Global (MBLY) gains 4% after the maker of software and hardware technology
for automobiles boosted its revenue forecast for the full year. ServiceNow (NOW) advances 6% after the software company reported second-quarter results that beat expectations and raised its full-year forecast for subscription revenue. T-Mobile (TMUS) gains
4% after the nation’s second largest wireless provider boosted its postpaid net customers guidance for the full year. Tractor Supply (TSCO) rises 3% after reporting comparable sales for the second quarter that beat the average analyst estimate. Viking Therapeutics
(VKTX) drops 8% after the obesity drug developer reported a second-quarter loss. West Pharmaceutical Services (WST) gains 23% after the company boosted its adjusted earnings per share guidance for the full year.

European gauges are mixed after giving up early gains on reports that US and EU are near a deal to set a 15% tariff on most products. Europe’s Stoxx 600 edges higher
on one of the busiest days in the earnings season. Telecoms and banks are the strongest-performing sectors, while technology and food & beverage sectors weigh. Germany’s export-reliant DAX jumped over 1% before paring gains. Better than expected results from
Deutsche Bank shares surge over 7% after the lender reported strong trading results, helping lift banking stocks to their highest since the 2008 global crash. Euro zone business activity grew more quickly than anticipated this month, driven by a strong upturn
in the dominant services sector and signs of continued recovery in manufacturing, according to a survey. Britain’s private sector lost momentum in July. Stoxx 600 +0.4%, DAX +0.4%, CAC -0.05%, FTSE 100 +1%. Telecom +2.1%, Banks +2%, Retail +1.6%, Media +1.1%.
Food & Bev -0.7%, Technology -0.7%.

Shares in Asia are mostly higher as investors bet that progress in trade deals will help clear the uncertainty that’s clouded the economic outlook. The MSCI Asia Pacific
Index rose 0.8%, with cyclical sectors, industrials and financials leading gains. Chip and tech-related shares also climbed after Alphabet reported strong second-quarter revenue growth. SK Hynix outlined plans to speed up spending on advanced memory chip production
capacity after reporting record earnings. Japanese stocks once again led gains in the region, extending Wednesday’s rally sparked by the announcement of a trade deal. The Topix climbed to an all-time high. Focus in Asia is on nations such as South Korea and
India that are yet to secure a deal. The Kospi pared almost all of its 1.7% early gain after the US proposed rescheduling a high-level trade meeting due to a scheduling conflict for Treasury Secretary Scott Bessent. Equities dropped in Thailand as investors
looked to cash in on recent gains amid an escalating border conflict with Cambodia. Topix +1.75%, Singapore +1%, Indonesia +0.8%, CSI 300 +0.7%, Vietnam +0.6%, Hang Seng Index +0.5%, Taiwan +0.25%, Kospi +0.2%. Philippines -0.3%, ASX 200 -0.3%, Thailand -0.6%,
Sensex -0.65%.

FIXED INCOME: 
 

Treasuries are modestly lower as US trading gets under way, with yields higher by ~2bps across the curve. The US session features weekly jobless claims data that’s
shown unexpected strength in job-market conditions for four straight weeks and an auction of 10-year inflation-protected Treasuries. The $21 billion 10-year TIPS new issue auction faces an array of challenges ranging from its record size to weaker-than-expected
demand for most of the six annual auctions of the tenor over the past two years.

METALS: 

Gold dipped to around $3,363 per ounce as rising appetite for risk in broader markets dented demand for safe-haven assets. Trump on Wednesday said the US is prepared
to lower threatened tariffs on European goods if the EU opens its market further to US companies. The progress on trade has helped drive Treasury yields higher, weighing on gold. Still, sentiment was tempered by Trump’s continued threats to impose between
15% and 50% duties on other countries, like South Korea and India, that are still trying to clinch agreements. Traders are also seeking clarity on the progress of negotiations with China, the world’s biggest metals consumer. Spot gold -0.7%, Silver -0.5%,
Copper futures +1.4%.

ENERGY:   

Oil prices rose on speculation the various trade deals would support global growth and after a sharper than expected decline in US crude inventories. Foreign oil
tankers were temporarily barred from loading at Russia’s main Black Sea ports due to new regulations, two industry sources said on Wednesday, effectively halting exports from Kazakhstan.  US exports of crude oil, liquefied natural gas, and coal reached a total
of zero last month amid the continuing trade war that had China impose retaliatory tariffs on US commodities, which led to a slump in purchases. Meanwhile, House Republicans are moving ahead with plans to pull US funding for the IEA, saying the group is no
longer objective on clean energy. WTI +0.8%, Brent +0.7%, US Nat Gas +1.3%, RBOB -0.1%.   

CURRENCIES: 

In currency markets, the dollar stabilized after an earlier dip triggered by Howard Lutnick telling Fox that Jerome Powell “has got to go.” Donald Trump will visit
the Fed today after criticizing its renovation costs. Sterling fell to a session low versus the dollar, underperforming G-10 peers, after PMIs showed the economy struggled to grow.  The euro headed for its first daily drop in five versus the dollar ahead of
the European Central Bank policy decision. The ECB is in wait-and-see mode with no change to rates or language expected at today’s meeting. Australian dollar gained after Reserve Bank of Australia Governor Michele Bullock downplayed market expectations of
an interest-rate cut. Thailand’s baht fell from the strongest level in more than three years after the government said Thai fighter jets attacked two Cambodian army posts. US$ Index +0.15%, GBPUSD -0.2%, EURUSD -0.15%, USDJPY -0.02%, AUDUSD +0.2%, NZDUSD +0.1%,
USDCHF +0.15%, USDCAD +0.1%, USDSEK +0.1%, USDNOK -0.02%.

Bitcoin +0.7%, 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
• Birkenstock (BIRK) Raised to Buy at Goldman; PT $60
• Boeing (BA) Raised to Outperform at KGI Securities; PT $266
• CB Financial Services (CBFV) Raised to Outperform at KBW; PT $39
• Credicorp (BAP) Raised to Neutral at Goldman; PT $225
• Crown Castle (CCI) Raised to Overweight at Wells Fargo; PT $125
• CSX (CSX) Raised to Buy at Deutsche Bank; PT $40
• General Dynamics (GD) Raised to Outperform at Wolfe; PT $360
• Icon (ICLR) Raised to Outperform at Baird
• Mercantile Bank (MBWM) Raised to Outperform at Raymond James; PT $55
• Northern Trust (NTRS) Raised to Peerperform at Wolfe
• Spotify (SPOT) Raised to Outperform at Oppenheimer; PT $800
• StorageVault Canada (SVI CN) Raised to Buy at Desjardins; PT C$5
• Travel + Leisure Co (TNL) Travel + Leisure Co Raised to Outperform at Mizuho Securities
• Varonis Systems (VRNS) Raised to Buy at Jefferies; PT $65
• Downgrades
• AT&T (T) Cut to Hold at HSBC; PT $30
• BankUnited (BKU) Cut to Neutral at Piper Sandler; PT $43
• BHP (BHP AU) ADRs Cut to Sell at Berenberg; PT $44
• Chubb (CB) Cut to Neutral at Piper Sandler; PT $283
• Community Health (CYH) Cut to Hold at Jefferies; PT $3
• Enovix (ENVX) Cut to Neutral at JPMorgan; PT $12
• Goosehead Insurance (GSHD) Cut to Neutral at Piper Sandler; PT $109
• Johnson Controls (JCI) Cut to Hold at Jefferies; PT $120
• KeyCorp (KEY) Cut to Neutral at Citi; PT $20
• Kraken Sonar (PNG CN) Cut to Hold at Canaccord; PT C$4
• MAG Silver (MAG CN) Cut to Neutral at HC Wainwright; PT C$29.94
• Saia (SAIA) Cut to Hold at Stifel; PT $306
• Tesla (TSLA) Cut to Hold at China Merchants; PT $361
• Cut to Sell at Punto Casa de Bolsa; PT $299.48
• Titan America (TTAM) Cut to Underperform at BofA
• Initiations
• Braze (BRZE) Rated New Outperform at Mizuho Securities; PT $40
• Elbit Systems (ESLT IT) Rated New Buy at BofA; PT $500
• Eupraxia Pharmaceuticals (EPRX CN) Rated New Overweight at Cantor; PT $11
• Hawkins (HWKN) Rated New Market Perform at Raymond James
• Intel (INTC) Rated New Buy at GF Securities; PT $34
• Kits Eyecare (KITS CN) Rated New Buy at Desjardins; PT C$23
• NFI Group (NFI CN) Reinstated Sector Outperform at Scotiabank; PT C$22
• Sagimet Biosciences (SGMT) Rated New Buy at Canaccord; PT $28
• Sarepta (SRPT) Reinstated Sell at Citi; PT $7
• UFP Industries (UFPI) Rated New Hold at Loop Capital; PT $112

Data sources: Bloomberg, Reuters, CQG

David Wienke