Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET Personal Income, Personal Spending, PCE Price Index, Employment Cost Index, Initial
Jobless Claims; 9:45ET MNI Chicago PMI

US JUNE CORE PCE PRICE INDEX RISES 0.3% M/M: EST. +0.3%

Highlights and News:  

• Trump, Mexico’s Sheinbaum plan call on eve of tariff deadline
• Treasury Secretary Bessent: I am not sure what the case is for not cutting rates
• BESSENT: WILL SPEAK TO TRUMP THURSDAY ABOUT AUG 12 DEADLINE WITH CHINA
• Bessent: We Have Makings Of A Deal; Confident It Will Be Done
• Nvidia staff were summoned by Chinese authorities

Global stock markets are showing mixed performance with a generally positive bias in some regions, driven by strong corporate earnings and easing trade concerns,
though tempered by looming tariff deadlines. Trump announced tariffs of 15% on imports from South Korea and 25% on imports from India, while criticizing India’s purchases of Russian energy and weapons. South Korea also agreed to invest $350 billion in the
US in projects selected by Trump and to purchase energy products worth $100 billion. Trump also said he would impose a 25% tariff on India’s exports to the US starting Friday and threatened an additional penalty over the country’s energy purchases from Russia.
Trump and Mexican President Claudia Sheinbaum plan to speak by phone this morning as a Friday deadline to avoid a 30% tariff looms. Trump intensified his trade war with Canada a day ahead of his August 1 deadline for a tariff agreement, saying it would be
“very hard” to make a deal following Canada’s endorsement of Palestinian statehood.

EQUITIES:   

US equity futures are mostly higher as Big Tech earnings delivered on optimism around the AI boom, putting Microsoft Corp. on course to become the second company to reach a $4 trillion
market capitalization. Strong earnings from Meta Platforms and Microsoft saw their shares surge in post market. Small cap futures underperform while tech heavy Nasdaq futures jump over 1%. Microsoft said it will spend more than $30 billion in the current quarter
to build out the data centers powering its artificial intelligence services. Chinese authorities summoned Nvidia representatives to discuss alleged security risks related to its H20 artificial intelligence chips. The Fed’s preferred inflation gauge — the core
PCE deflator — is likely to show more rapid inflation than June’s CPI report. Apple and Amazon.com are due to report after the bell.  

Futures ahead of the data/bell: E-Mini S&P +0.9%, Nasdaq +1.3%, Russell 2000 -0.6%, DJI +0.2%.

In pre-market trading, Meta Platforms (META) surges 11% after Facebook’s parent company gave a strong revenue forecast and reported second-quarter results that beat
analysts’ expectations. Microsoft (MSFT) shares rally 8% after the software giant reported very strong results, with notable strength in its cloud business and Azure product. Amazon (AMZN) +3%, Nvidia (NVDA) +2%, Apple (AAPL) -0.1%, , Tesla (TSLA) -0.2%, Alphabet
(GOOGL) -0.4%. Alignment Healthcare (ALHC) rises 21% after the Medicare Advantage company said 2Q health plan memberships increased 28% from a year ago, topping estimates. Applied Digital (APLD) rallies 21% as the digital infrastructure company reports better-than-expected
quarterly revenue and says cloud infrastructure provider CoreWeave to lease an additional 150MW of capacity at the North Dakota data center campus. CoreWeave (CRWV) shares jump 10%. Arm Holdings Plc (ARM) falls 6% after the company gave a lower-than-expected
profit forecast. Carvana (CVNA) soars 15% after the online car retailer reported revenue during the second quarter that exceeded analyst estimates. Confluent (CFLT) falls 29% as analysts, including at Stifel, downgrade the application software company’s stock,
citing a tough outlook for revenue growth amid cloud usage optimization and lackluster customer additions. CVS Health (CVS) rises 7% after the company boosted its adjusted earnings-per-share guidance for the full year, following second-quarter results that
also topped expectations. Datadog Inc. (DDOG) is down 3% as a filing showed Chief Executive Officer Olivier Pomel sold shares of the software company. EBay (EBAY) jumps 14% after the online auction company reported second-quarter results that beat expectations.
PTC Inc. (PTC) rises 7% after the software company reported third-quarter results that beat expectations and raised its full-year forecast. Norwegian Cruise (NCLH) jumps 8% after the cruise operator reported adjusted Ebitda for the second quarter that beat
the average analyst estimate. Qualcomm (QCOM) falls 6% after the chipmaker reported its third-quarter results and gave an outlook. Shake Shack (SHAK) falls 8% after the burger chain providing a 3Q revenue outlook that disappointed. TransMedics (TMDX) rises
17% after the biotechnology company reported diluted EPS for the second quarter that beat. Western Digital (WDC) jumps 8% after the computer-storage company beat fourth quarter estimates.

European gauges erase initial gains as miners weighed during one of the busiest days of the year for corporate results. Rolls-Royce shares soar to a record after the
aircraft-engine maker raised its outlook for the year, while AB InBev plunges on its latest results. BBVA jumps 9% after the Spanish lender beat estimates and improved its guidance. Safran gained over 4% after it raised its full-year guidance for free cash
flow, revenue growth and operating income well above analysts’ expectations. Argenx surges as much as 16% after the biotech company reported Vyvgart sales for Q2 that analysts called a “significant beat.” Societe Generale shares jumped as much as 8.5% after
the French lender reported an upbeat 2Q set of earnings. Sanofi shares drop ~4% after the French drugmaker reported weaker-than-expected earnings. Accor shares fall as much as 13% after the hotel operator unveiled disappointing guidance. Eramet slid over 9%
after the mining and metallurgy firm reported weaker-than-expected results. Stoxx 600 -0.1%, DAX -0.1%, CAC -0.3%, FTSE 100 +0.4%. Aero & Defense +3%, Banks +1.1%, Industrials +0.7%. Basic Resources -3.6%, Food & Bev -2%.

Shares in Asia fell as disappointment over outcomes from a key political meeting swamped shares in China. The MSCI Asia Pacific Index fell 0.4% for a fifth-straight
daily decline. Samsung Electronics was among the biggest drags after disappointing earnings. Stocks in Tokyo bucked the regional drop, maintaining gains after the Bank of Japan kept policy rate unchanged. Equity benchmarks in Hong Kong and mainland China declined
more than 1% amid weak economic data. Chinese semiconductor stocks advanced in afternoon trading after the mainland authorities summoned Nvidia representatives to discuss alleged security risks linked to its H20 artificial intelligence chips. Indian shares
erased some of its earlier losses as Trump said both sides were still in discussions on trade after he threatened at least 25% tariff on imports. South Korean stocks swung from a gain to a loss as investors shrugged off a relatively light 15% US tariff. CSI
300 -1.8%, Hang Seng Index -1.6%, Singapore -1.1%, Philippines -1%, Indonesia -0.9%, Sensex -0.4%, Vietnam -0.3%, Kospi -0.3%, ASX 200 -0.15%, Thailand -0.15%. Nikkei 225 +1%, Taiwan +0.3%.

FIXED INCOME: 
 

Treasuries rose across the curve, helping to reverse some of their pullback Wednesday after Fed Chair Jerome Powell said no decision had been made about easing policy
in September. US yields are mostly richer by 1bp-4bp with 2-year yield +1bp, flattening 2s10s curve by 2bp, 5s30s by 1bp; US 10-year yields are down ~3 bps at 4.340%. US session has busy economic data calendar, and flows tied to month-end index rebalancing
may provide support. 

METALS: 

Gold rose, reversing some of the previous session’s losses as traders pulled back bets on a September rate cut from the US Federal Reserve. Spot gold rises $32 to
around $3,307/oz. Comex copper slumped, briefly dropping below LME prices, after Trump’s exemption of refined copper from tariffs caught investors by surprise. Massive volumes now sit in US warehouses, and there’s already speculation about potential re-exports.
Meanwhile, global copper demand is growing quicker than expected, fueled by massive investments to upgrade and expand power grids worldwide. Spot gold +0.9%, Silver -1.5%, Copper futures -21%.

ENERGY:   

Oil prices eased while trading in a narrow range overnight ahead of an Aug. 1 tariff deadline and after the US threatened to impose tariffs on India due to its ties
with Russia. Russia’s Deputy Prime Minister and Saudi Arabian Energy Minister met to discuss the oil market and cooperation within the framework of the OPEC+. The talks took place as eight key members of OPEC+ are expected to decide this weekend on another
jumbo production hike for September, which would complete the resumption of 2.2 million-barrel a day of supply a year ahead of schedule. Refiners in China and India may not cut Russian crude imports despite sanctions, Goldman said, noting they accounted for
about 45% of purchases this year. WTI -0.3%, Brent -0.4%, US Nat Gas -0.2%, RBOB -0.6%. 

CURRENCIES: 

In currency markets, Japanese yen is weaker against the dollar, having erased an earlier gain after BOJ Governor Ueda reduced expectations of a near-term rate increase.
The dollar is steady after a five-day winning streak ahead of key US inflation data.  After its weakest first-half performance since 1973, the dollar is now on track for its first monthly gain of the year, bolstered by the Fed’s decision to hold rates steady,
stronger-than-expected US economic growth, and diminishing concerns over a trade war. Fed Chair Jerome Powell also hinted on Wednesday that interest rates may stay elevated for longer, helping push the dollar index higher and trimming overall losses for the
year to ~7%. The euro rose as traders cut bets on a final quarter-point ECB rate cut this year. India’s rupee plunged toward a record low after Trump slapped steeper-than-expected tariffs on Indian goods, with analysts warning of sustained pressure on the
country’s growth. US$ Index -0.03%, GBPUSD +0.02%, EURUSD +0.4%, USDJPY +0.25%, AUDUSD +0.2%, NZDUSD +0.2%, USDCHF -0.4%, USDCAD +0.05%, USDSEK -0.5%, USDNOK -0.35%.

Bitcoin %, Ethereum %. 

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
• Appfolio (APPF) Raised to Market Perform at KBW; PT $267
• Canadian Pacific Kansas (CP CN) Raised to Outperform at National Bank
• Capital Power (CPX CN) Raised to Outperform at RBC; PT C$67
• Cheesecake Factory (CAKE) Raised to Buy at CFRA
• CoreWeave (CRWV) Raised to Buy at Citi; PT $160
• EBay (EBAY) Raised to Outperform at BMO; PT $102
• Embraer (EMBR3 BZ) ADRs Raised to Outperform at Wolfe; PT $64
• Hudson Technologies (HDSN) Raised to Buy at Canaccord; PT $10.50
• Hyatt (H) Raised to Buy at CFRA
• Ionis Pharma (IONS) Raised to Overweight at Morgan Stanley; PT $62
• Microsoft (MSFT) Raised to Buy at Punto Casa de Bolsa; PT $646.54
• Raised to Overweight at KeyBanc; PT $630
• Nucor (NUE) Raised to Buy at Jefferies; PT $170
• Stifel Financial (SF) Raised to Buy at Citi; PT $135
• Teradyne (TER) Raised to Equal-Weight at Morgan Stanley; PT $100
• Tigo Energy (TYGO) Raised to Buy at Roth Capital Partners; PT $3
• Zegna Group (ZGN) Raised to Neutral at Mediobanca SpA; PT $9
• Downgrades
• Albany International (AIN) Cut to Neutral at Baird; PT $79
• Align Technology (ALGN) Cut to Equal-Weight at Morgan Stanley; PT $154
• Boeing (BA) Cut to Neutral at President Capital Management; PT $235
• Caesars Entertainment (CZR) Cut to Sell at CFRA
• Carlisle (CSL) Cut to Hold at Loop Capital; PT $395
• Celestica (CLS CN) Cut to Hold at GF Securities; PT C$267.89
• Chart Industries (GTLS) Cut to Hold at TD Cowen; PT $210
• Confluent (CFLT) Cut to Neutral at Stifel; PT $21
• Cut to Equal-Weight at Capital One; PT $21
• CyberArk (CYBR) Cut to Equal-Weight at Stephens; PT $440
• Cut to Neutral at Wedbush; PT $450
• Cut to Neutral at Guggenheim
• Cut to Sector Perform at RBC; PT $448
• Cut to Neutral at Piper Sandler; PT $448
• Cut to Hold at Stifel; PT $444
• Cut to Neutral at BTIG
• Illinois Tool (ITW) Cut to Hold at Truist Secs; PT $283
• Lam Research (LRCX) Cut to Hold at Summit Insights
• MP Materials (MP) Cut to Equal-Weight at Morgan Stanley; PT $65
• New Oriental Education (EDU) ADRs Cut to Add at SWS Research
• ADRs Cut to Hold at HSBC
• Novo (NOVOB DC) ADRs Cut to Hold at HSBC; PT $57
• Palo Alto Networks (PANW) Cut to Sector Weight at KeyBanc
• Pulmonx (LUNG) Cut to Neutral at Piper Sandler; PT $2.50
• SPS Commerce (SPSC) Cut to Hold at Loop Capital; PT $120
• Tradeweb (TW) Cut to Neutral at Goldman; PT $136
• Trane Technologies (TT) Cut to Hold at HSBC; PT $460
• UnitedHealth (UNH) Cut to Underperform at Baird; PT $198
• VF Corp (VFC) Cut to Underperform at BNPP Exane; PT $10
• Vodafone (VOD LN) ADRs Cut to Sell at Goldman; PT $10.09
• VYNE Therapeutics Inc (VYNE) Cut to Neutral at BTIG
• ZimVie (ZIMV) Cut to Neutral at B Riley; PT $19
• Initiations
• CytomX (CTMX) Rated New Outperform at Oppenheimer; PT $7
• Galaxy Digital (GLXY) Rated New Neutral at Goldman; PT $30
• Lexeo Therapeutics (LXEO) Rated New Outperform at Oppenheimer; PT $20
• LVMH (MC FP) ADRs Rated New Neutral at BNPP Exane; PT $120
• NN (NNBR) Rated New Buy at B Riley; PT $4
• Okyo Pharma (OKYO) Rated New Buy at Lucid Capital Markets; PT $13
• Rio Tinto (RIO LN) ADRs Rated New Outperform at BNPP Exane; PT $77
• Sandoz Group (SDZ SW) ADRs Rated New Neutral at BNPP Exane; PT $56
• Structure Therapeutics (GPCR) ADRs Rated New Buy at Clear Street
• TransUnion (TRU) Rated New Outperform at Baptista Research; PT $113.90
• VF Corp (VFC) Rated New Outperform at KGI Securities; PT $14.80
• Westinghouse Air Brake (WAB) Rated New Hold at Baptista Research

Data sources: Bloomberg, Reuters, CQG

David Wienke