Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET
ADP Employment Change; 8:30ET GDP Price Index, Core PCE Price Index, Personal Consumption, Treasury Quarterly Refunding Announcement; 9:45ET Bank of Canada Rate Decision; 10:00ET
Pending Home Sales; 2:00ET FOMC Rate Decision  

US 2Q CORE PCE RISES ANNUALIZED 2.5% Q/Q; EST. +2.3%. US 2Q GDP RISES ANNUALIZED 3.0% Q/Q; EST. +2.6%.

Highlights and News:  

• Tsunami waves hit Hawaii after earthquake off Russia triggers evacuations across Pacific
• Kremlin Claims Russia Has Been Under Heavy Sanctions for Years and Has Achieved “Immunity”
• CHINA’S WANG WENTAO MEETS EXECUTIVES FROM US FIRMS
  
• TRUMP: INDIA WILL BE PAYING TARIFF OF 25%, PLUS A PENALTY FOR BUYING FROM RUSSIA
  
• PALO ALTO NETWORKS TO BUY CYBERARK FOR ABOUT $25B CASH, STOCK
  
• US credit card debt has hit an all-time high of $1.1 trillion
• UCLA will pay over $6 million to settle discrimination complaints by Jewish students and faculty

Global stocks edged higher ahead of the Federal Reserve’s policy announcement, with investors cautious after two days of trade talks between the US and China concluded
without any major breakthroughs. Investors are also awaiting several central bank decisions, economic reports, and corporate earnings over the coming days, as well as President Trump’s August 1 tariff deadline. With the Bank of Japan expected to keep policy
unchanged on Thursday, the markets will analyze its comments to gauge when the next rate increase will come. India is among those bracing for higher US tariffs, likely between 20% and 25% on some exports, as it holds off on fresh trade concessions ahead of
the August 1 deadline, government sources said. A powerful magnitude 8.8 earthquake off Russia’s Far Eastern Kamchatka Peninsula triggered tsunami waves of up to 16 feet nearby. It sparked evacuation orders as far away as Hawaii and across the Pacific.  The
initial waves to hit Japan were small. The Bank of Canada looks set to stand pat with its policy rate at 2.75% this morning.

EQUITIES:   

US equity futures inch higher in the lead-up to the Federal Reserve interest-rate decision and key tech earnings. Fed policymakers are largely expected to hold rates steady for a fifth
consecutive meeting. Before the Fed, GDP figures will provide insight into the health of the American economy ahead of Friday’s key payrolls report. Megacaps Microsoft and Meta are due to report earnings today that will set the tone for the rest of the week
and the earnings season. Starbucks gained in premarket trading as investors focused on positive signs in its turnaround plan despite a sales miss. Hawaii’s tsunami warning was downgraded to advisory after a major earthquake off Russia’s coast. Tsunami warning
remains in effect for Northern California. Palo Alto Networks (PANW -7% pre-market) agreed to buy CyberArk for about $25 billion in cash and stock, with CyberArk holders getting $45 cash and 2.2005 Palo Alto shares per share.

Futures ahead of the data/bell: E-Mini S&P +0.1%, Nasdaq +0.1%, Russell 2000 +0.4%, DJI +0.05%.

In pre-market trading, AtriCure (ATRC) jump 10% after the medical-device firm forecast full-year adjusted Ebitda and revenue ahead of expectations. Etsy (ETSY) climbs
6% after the online marketplace posted 2Q gross merchandise sales that beat. Harley-Davidson (HOG) rises 8% after the motorcycle company also confirmed a deal where HDFS agreed to sell a 4.9% interest to KKR and PIMCO. Humana (HUM) rises 7% after the health
insurer raised its profit guidance for the year. LendingClub (LC) soars 24% after the financial services company forecast new originations for the third quarter, and its guidance beat the average analyst estimate. Peloton Interactive (PTON) shares rise 7%
after UBS upgraded to buy. Qorvo (QRVO) rises 9% after the Apple supplier reported stronger-than-expected earnings and gave an upbeat forecast. Seagate Technology (STX) falls 6% after the computer-hardware manufacturer gave an outlook that was described as
disappointing. SoFi Technologies Inc. (SOFI) drops 8% after the provider of consumer financial services said it’s selling $1.5 billion of stock. Starbucks (SBUX) is up 4% after the coffee chain reported net revenue for the third quarter that beat. Teradyne
(TER) rises 6% after the chip manufacturer reported adjusted earnings per share for the second quarter that beat. VF Corp. (VFC) soars 15% after the apparel and shoe company reported fiscal first-quarter earnings that beat. Visa Inc. (V) is down 1.5% after
the world’s biggest payments network left its earnings outlook unchanged for the rest of the fiscal year. Meta leads gains among Magnificent Seven stocks ahead of its earnings.

European gauges are mixed, mostly reversing earlier losses after data showed the euro-area economy unexpectedly grew by 0.1% in the second quarter. Spain, France and
Ireland continued to perform above expectations, offsetting weakness in Germany and Italy, data from Eurostat indicated. Euro-zone wage growth is set to slow sharply into next year, the ECB said. The Euro Stoxx 600 is just barely in positive territory with
gains in food, banks and construction offsetting losses in chemicals and autos. Mercedes-Benz and Porsche fell after cutting profit forecasts, citing tariff pressure. German sportswear maker Adidas (-7%) and French luxury group Kering (+4%) both flagged that
tariffs were having an impact on costs and pricing. UBS Group posted higher-than-expected profit in the second quarter. Santander fell after it reported an unexpected €467 million charge at its Brazilian business, overshadowing a record profit last quarter
and a new share buyback. HSBC fell after missing estimates.  Defense contractor BAE Systems raised its earnings outlook for the full year. Glencore raised its long-term profit forecast for its commodity trading unit and announced plans to cut about $1 billion
of costs. Stoxx 600 +0.1%, DAX +0.1%, CAC +0.5%, FTSE 100 -0.4%. Banks +0.8%, Construction +0.6%, Food & Bev +0.6%. Chemicals –0.8%, Autos -0.7%.

Shares in Asia were mixed as investors turned their focus to key monetary policy decisions from Japan and the US.  The MSCI Asia Pacific Index gained 0.2%, snapping
a three-day decline, with chipmakers TSMC and Samsung Electronics among the top contributors. Equities advanced in tech-heavy South Korea and Taiwan. Tesla signed a $4.3 billion deal to buy LFP batteries from LG Energy, its second South Korea tie-up this month.
Benchmarks in Hong Kong traded lower as trade talks between Beijing and Washington were set to continue ahead of the expiry of a tariff truce in two weeks. Adding an extra 90 days is one option, Treasury Secretary Scott Bessent said. Separately, the US also
said that India may be hit with a tariff rate of 20% to 25%. Taiwan +1.1%, Vietnam +0.9%, Thailand +0.8%, Kospi +0.7%, ASX 200 +0.6%, Topix +0.4%, Sensex +0.2%, Shanghai Composite +0.2%. Hang Seng Index -1.4%, Indonesia -0.9%, Singapore -0.2%, Philippines
-0.1%, CSI 300 was flat.

FIXED INCOME: 
 

Treasury yields are slightly higher ahead of the quarterly refunding and Fed decision. The market anticipates the Fed will keep rates on hold despite pressure from
the White House to lower borrowing costs. 10-year yield is +3bps around 4.34%; 2-year yield +1.5bp ~3.88%; curve steeper by 1bp. Today’s heavy event calendar starts with ADP print, followed by GDP estimate and the refunding announcement, where Treasury officials
may clarify the scope for favoring sales of short-maturity bills vs longer-maturity notes and bonds. For the Fed policy announcement, swaps market prices in near-zero odds of a rate and about 15bp of easing for the September policy meeting. Governors Waller
and Bowman are potential dissenters for an unchanged policy stance, which would be the first time since 1993 that two governors voted against a policy decision. Benchmark Treasuries still look cheap despite the recent rally, according to Bloomberg’s MLIV Pulse
Survey. A new model that incorporates four key variables — including the fed funds rate and inflation swaps — estimates fair value at 4.15%.

METALS: 

Gold held a small advance while silver fell ahead of the Federal Reserve’s interest-rate decision. Traders will be watching key indicators, from jobs and inflation
to economic activity, to gauge how Fed officials may position themselves ahead of their September meeting, where a rate cut looks likely. Spot gold traded near $3,330 an ounce, following a 0.4% gain on Tuesday. China’s gold-backed ETFs are seeing record outflows
this month as investors shift into local equities. Spot gold +0.1%, Silver -0.8%, Copper futures -0.05%.

ENERGY:   

Oil prices dipped slightly as investors awaited developments on Trump’s tighter deadline for Russia to end the war in Ukraine and his tariff threats to countries
that trade its oil. JP Morgan analysts wrote that while China was unlikely to comply with US sanctions, India has signaled it would do so, which could affect 2.3 million barrels per day of Russian oil exports. The US warned China, the largest buyer of Russian
oil, that it could face huge tariffs if it kept buying. US distillate stockpiles jumped by 4.2 million barrels last week, the API reported. That would take total holdings to the highest in four months if officially confirmed today. Meeting this weekend, OPEC+
members are expected to decide on production levels for September on Sunday. WTI -0.4%, Brent -0.4%, US Nat Gas -0.6%, RBOB -0.4%. 

CURRENCIES: 

In currency markets, the US dollar index edges higher, trying to extend a four-day winning streak as investors cautiously await the Fed’s policy meeting. With policy
expected to remain on hold, traders are focused on the number of policymakers that dissent. The yen inches higher on potential repatriation flows after a powerful earthquake struck off Russia’s Far Eastern Peninsula and generated a tsunami, prompting evacuation
warnings along most of Japan’s east coast. The euro is slightly lower, on course for its first monthly drop on the year. Aussie$ lead G-10 losses. Australia’s core inflation cooled in the three months through June, strengthening the case for the Reserve Bank
to ease monetary policy as early as August. The South Korean won rose after local media reported the US demanded appreciation of the currency during trade talks. The loonie eases ahead of the Bank of Canada rate decision. US$ Index +0.15%, GBPUSD +0.1%, EURUSD
-0.15%, USDJPY -0.1%, AUDUSD -0.4%, NZDUSD -0.2%, USDCHF +0.1%, USDCAD +0.1%, USDSEK +0.15%, USDNOK +0.1%.

Bitcoin +0.05%, Ethereum -0.2%.  A cryptocurrency working group formed by President Trump is set to release a report today that is expected to outline the administration’s
stances on tokenization and market-defining crypto legislation. Crypto exchange Kraken is seeking to raise about $500 million at a $15 billion valuation, The Information 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
• Aon PLC (AON) Raised to Buy at Jefferies; PT $426
• Ares Capital (ARCC) Raised to Buy at B Riley; PT $23.50
• Brown & Brown (BRO) Raised to Buy at BofA; PT $130
• Ecolab (ECL) Raised to Outperform at Baird; PT $300
• Exagen (XGN) Raised to Overweight at KeyBanc; PT $12
• Ormat (ORA) Raised to Outperform at Baird; PT $103
• Peloton (PTON) Raised to Buy at UBS; PT $11
• PNC Financial (PNC) Raised to Outperform at Oppenheimer; PT $238
• RAPT Therapeutics (RAPT) Raised to Neutral at JPMorgan; PT $14
• Seagate (STX) Raised to Overweight at Cantor; PT $175
• Spotify (SPOT) Raised to Hold at DZ Bank; PT $652
• Supernus (SUPN) Raised to Overweight at Cantor; PT $42
• TPG (TPG) Raised to Outperform at BNPP Exane; PT $69
• Veralto (VLTO) Raised to Outperform at Wolfe; PT $123
• Downgrades
• Adaptimmune (ADAP) ADRs Cut to Neutral at Guggenheim
• Albemarle (ALB) Cut to Sector Weight at KeyBanc
• AMD (AMD) Cut to Sell at DZ Bank; PT $150
• American Tower (AMT) Cut to Hold at HSBC; PT $235
• Baker Hughes (BKR) Cut to Neutral at Seaport Global Securities
• Booking (BKNG) Cut to Neutral at Wedbush; PT $5,900
• Borr Drilling (BORR) Cut to Hold at Fearnley; PT $2.50
• Chart Industries (GTLS) Cut to Neutral at Seaport Global Securities
• Cut to Hold at HSBC; PT $210
• Cut to Market Perform at Raymond James
• NeoGenomics (NEO) Cut to Neutral at BTIG
• Cut to Sell at Nephron Research; PT $3.50
• Neogen (NEOG) Cut to Market Perform at William Blair
• Norfolk Southern (NSC) Cut to Hold at Benchmark
• Cut to Neutral at JPMorgan; PT $288
• Cut to Inline at Evercore ISI; PT $289
• Seadrill (SDRL) Cut to Hold at Fearnley; PT $32
• Secure Waste (SES CN) Cut to Market Perform at BMO; PT C$18
• Union Pacific (UNP) Cut to Neutral at Citi; PT $250
• Universal Health (UHS) Cut to Underweight at Cantor; PT $227
• UPS (UPS) Cut to Hold at Vertical Research; PT $103
• Cut to Neutral at BofA; PT $98
• Valaris (VAL) Cut to Hold at Fearnley; PT $52
• Initiations
• Blackstone (BX) Rated New Buy at DBS Bank; PT $190
• Edgewise Therapeutics (EWTX) Rated New Strong Buy at Raymond James
• Graco (GGG) Rated New Hold at Baptista Research; PT $94.10
• Lennox (LII) Rated New Hold at Baptista Research; PT $721.90
• National Vision (EYE) Rated New Buy at Roth Capital Partners; PT $36
• Roche (ROG SW) ADRs Rated New Outperform at BNPP Exane; PT $47
• Spotify (SPOT) Rated New Neutral at President Capital Management
• TE Connectivity (TEL) Rated New Hold at Baptista Research; PT $235.90

Data sources: Bloomberg, Reuters, CQG

David Wienke