Daily Game Plan

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

TODAY’S ECONOMIC DATA:   11:00ET Fed’s Waller speaks; 1:00ET 20yr bond auction; 2:00ET FOMC Meeting Minutes; 3:00ET
Fed’s Bostick speaks

Highlights and News:  

• Bessent Says China Tariff Status Quo ‘Working Pretty Well’
• Israel to Start Call-Up of 60,000 Reservists for Gaza Offensive
• Target Picks Insider as CEO to Lead Turnaround; Shares Sink
  
• McDonald’s to Cut Combo Meal Prices
• Hertz Global to Sell Used Cars via Amazon
  
• The White House launched its own account on TikTok
• For first time in history a NEW home in US costs $33,500 LESS than an EXISTING home: Reventure

Global stocks inch up after US Treasury Secretary Scott Bessent indicated the US is satisfied with the current tariff set up with China, saying “we’re very happy”
with the situation with China and “the status quo is working pretty well”. The euro-zone economy is likely to see slower growth this quarter, according to ECB President Christine Lagarde.  UK inflation climbed to an 18-month high due to surging food, fuel
and transport prices, putting the Bank of England under pressure to reconsider the pace of interest-rate cuts. Sweden’s central bank kept interest rates steady to counter a recent spike in inflation and restated the prospect for another cut that may come as
soon as next month to support a struggling economy. Japan’s exports fell by a bigger-than-expected 2.6% in July, the steepest drop in more than four years. New Zealand cut rates by 25bps as expected and Indonesia surprised with a cut. Israel’s military is
calling up about 60,000 more reserve soldiers to join the war against Hamas in Gaza, a sign that preparations are underway for a stepped up offensive.

EQUITIES: Reminder: MSCI Rebalance moved to Tuesday Aug 26th – not Friday Aug 29th
 

US equity futures are off their lows in muted trading with Nasdaq 100 futures underperforming after logging its second-worst drop since April. While most members of the Magnificent Seven
extended declines in premarket trading, Nvidia rose 0.2% after Tuesday’s 3.5% retreat. Palantir Technologies dropped 0.7% after falling by the most since June. Investors pared back positions in big tech amid growing concern that the recent record-breaking
rally has run too far, too fast and has leaned heavily on a few growth leaders. That momentum will get a further test this week as focus turns to Jackson Hole, Wyoming, where Fed Chair Jerome Powell is set to speak on Friday. Investors also await Nvidia’s
earnings next week for indications on the health of the artificial intelligence boom. The three worst performing stocks in the Dow this year are the three that are up the most over the last week; UNH, CRM, MRK.       

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.2%, Russell 2000 -0.1%, DJI -0.01%

In pre-market trading, Analog Devices (ADI) rises 3% after the semiconductor-device company reported adjusted earnings per share for the third quarter that beat estimates.
Celldex Therapeutics (CLDX) falls 18% after the drug developer said it was discontinuing development of barzolvolimab in eosinophilic esophagitis after a Phase 2 study. Custom Truck One Source (CTOS) declines 4% after being downgraded at JPMorgan to underweight
from neutral. Dayforce (DAY) rises 2% after the software firm said it’s in advanced discussions with Thoma Bravo regarding a potential acquisition for $70 per share. Estee Lauder (EL) falls 7% after issuing an annual adjusted EPS forecast that trails expectations. Hertz (HTZ)
rises 10% after CNBC reported that the car-rental company will start selling pre-owned cars on Amazon Autos. Shares of Carvana (CVNA) decline 5%, while CarMax (KMX) drops 4%. La-Z-Boy (LZB) falls 22% after the home furniture retailer posted weaker-than-expected
first-quarter adjusted earnings. Lowe’s Cos. (LOW) rises 3% after agreeing to buy Foundation Building Materials for about $8.8 billion in cash as it expands further beyond home-improvement supplies. Novavax (NVAX) drops 7% after BofA Global Research downgraded
the vaccine maker to underperform from neutral. Rocket Pharmaceuticals (RCKT) falls 18% after announcing that the FDA lifted the clinical hold on the Phase 2 trial of RP-A501 for the treatment of Danon disease. Target Corp. (TGT) drops 10% after saying management
still sees a sales decline of low-single digit percentage. The company also named veteran Michael Fiddelke as its next chief executive officer, betting that the insider will rejuvenate sales and help the storied retailer regain its footing. Toll Brothers (TOL)
is down 2% after the luxury builder’s quarterly orders missed estimates.

The inaugural World Humanoid Robot Games in Beijing. REUTERS

European gauges erased some or all of their early losses to trade mixed, with Germany’s DAX still lower on the day after the selloff in technology heavyweights in the
US weighs on sentiment. European defense stocks remain under pressure this morning after Putin “agreed to begin the next phase of the peace process,” according to the White House. The Stoxx 600 edges into the green as food & beverage stocks outperform, while
aero & defense and travel shares lag. Emmi gains over 6% after the Swiss dairy producer published solid results. Convatec shares rise as much as 6% after the medical equipment manufacturer announced the start of a buyback program. Sensirion rises as much as
11% after the semiconductor device manufacturer posted results that beat analysts’ estimates. Ithaca Energy jumped over 9% after the UK oil and gas company boosted its production forecast for the full year. Alcon drops over 11% in Zurich, after delivering
sales growth below expectations. Stoxx 600 +0.2%, DAX -0.3%, CAC +0.2%, FTSE 100 +0.6%. Food & Bev +1.4%, Personal Goods +1%. Aero & Defense -0.8%, Travel -0.5%, Basic Resources -0.4%.

Shares in Asia were mixed to lower, with the MSCI Asia Pacific Index falling 0.7% as technology shares tracked declines in US peers. Taiwan and Japan led declines while
China topped the leaderboard. New Zealand stocks climbed after the nation’s central bank lowered its benchmark interest rate by 25 basis points. Indonesian shares gained as the central bank surprised markets by cutting its benchmark rate for a second straight
month and signaling more easing was on the table. Baidu’s revenue fell, hurt by an economic downturn that’s capping its ability to fight bigger rivals in AI and make inroads in new growth areas. Shares of Chinese pop toy maker Pop Mart International Group
rose to a record after its founder and CEO said the company could easily surpass its annual sales projection. CSI 300 +1.1%, Indonesia +1%, Thailand +1%, Vietnam +0.6%, Sensex +0.25%, ASX 200 +0.25%, Hang Seng Index +0.2%. Taiwan -3%, Nikkei 225 -1.5%, Kospi
-0.7%.

FIXED INCOME: 
 

Treasuries are narrowly mixed with the yield curve slightly flatter in early US trading. 10-year is lower by about 1bp near 4.30%. US session features 20-year new-issue
auction at 1:00ET and release of minutes of Fed’s July meeting at 2pm. Week’s major focal point is Fed Chair Powell’s Jackson Hole speech on Friday. Fed Governor Christopher Waller, one of those who dissented at that meeting, is due to speak at 11:00 am ET.

METALS: 

Gold edged higher as traders weigh the outlook for US monetary policy ahead of a key speech by Federal Reserve Chair Jerome Powell. Markets are watching US and European
efforts toward a landmark meeting between Presidents Putin and Zelenskiy, with any signs of a Russia-Ukraine ceasefire potentially easing demand for gold as a haven. The CEOs of Rio Tinto and BHP met with Trump to discuss the Resolution copper project in Arizona,
a venture that may meet a quarter of US demand for decades. Spot gold +0.6%, Silver -0.2%, Copper futures ~flat.

ENERGY:   

Oil prices rose as supply concerns are resurfacing while peace talks ending Russia’s invasion of Ukraine are likely to take longer, leaving in place sanctions on
Russian crude. Trump said on Tuesday he discussed holding possible talks between Zelenskiy and Putin in Hungary with the country’s Prime Minister Viktor Orban. Russia has not confirmed it will take part in talks with Zelenskiy. In the US, BP said on Tuesday
operations at its 440,000-barrel-per-day refinery in Whiting, Indiana, were affected due to flooding caused by a severe thunderstorm overnight, potentially weighing on the facility’s crude demand. The site is a key fuel producer for the Midwest market. WTI
rude futures for September delivery, set to expire today. WTI +1.4%, Brent +1.2%, US Nat Gas -1%, RBOB +0.9%. 

CURRENCIES: 

In currency markets, the dollar is mixed versus G-10 peers as traders turned their focus to the release of Federal Reserve meeting minutes later today. The kiwi lags,
down more than 1% after the RBNZ cut rates to a three-year low and flagged further easing. The krona is little changed after the Riksbank held policy as expected. Sterling erased a drop after the inflation report topped estimates before drifting lower.  US$
Index +0.01%, GBPUSD -0.1%, EURUSD -0.05%, USDJPY -0.1%, AUDUSD -0.3%, NZDUSD -1.1%, USDCHF -0.05%, USDCAD is flat, USDSEK is flat, USDNOK -0.2%.

Bitcoin ~flat, Ethereum +0.7%. 

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
• Bank OZK (OZK) Raised to Overweight at Stephens; PT $65
• Hormel (HRL) Raised to Overweight at JPMorgan; PT $34
• J M Smucker (SJM) Raised to Overweight at JPMorgan; PT $129
• McCormick (MKC) Raised to Overweight at JPMorgan; PT $83
• Nubank (NU) Raised to Buy at Citi; PT $18
• Upstart (UPST) Raised to Overweight at JPMorgan; PT $88
• Vita Coco (COCO) Raised to Overweight at Piper Sandler; PT $39
• Downgrades
• Abercrombie & Fitch (ANF) Cut to Neutral at Citi; PT $105
• Applied Materials (AMAT) Cut to Neutral at Daiwa; PT $170
• Atmus Filtration (ATMU) Cut to Neutral at JPMorgan; PT $46
• Cameco (CCO CN) Cut to Neutral at President Capital Management; PT C$86
• CompoSecure (CMPO) Cut to Underweight at JPMorgan; PT $16
• Custom Truck (CTOS) Cut to Underweight at JPMorgan; PT $5.50
• Edenor (EDN AR) ADRs Cut to Equal-Weight at Morgan Stanley; PT $36
• Gap (GAP) Cut to Neutral at Citi; PT $22
• General Mills (GIS) Cut to Underweight at JPMorgan; PT $45
• Goodyear (GT) Cut to Hold at HSBC; PT $9.50
• Healthpeak Properties (DOC) Cut to Hold at Deutsche Bank; PT $18
• Kaspi.kz (KSPI KZ) ADRs Cut to Neutral at JPMorgan; PT $96
• Kroger (KR) Cut to Neutral at JPMorgan; PT $75
• Novavax (NVAX) Cut to Underperform at BofA; PT $7
• Orchestra BioMed (OBIO) Cut to Neutral at BTIG
• Plymouth (PLYM) Cut to Market Perform at Citizens
• Riskified (RSKD) Cut to Underweight at JPMorgan
• Urban Outfitters (URBN) Cut to Neutral at Citi; PT $76
• Initiations
• Astera Labs (ALAB) Rated New Underperform at Baptista Research
• Celestica (CLS CN) Rated New Outperform at CICC; PT C$318.85
• Eaton Corp (ETN) Rated New Neutral at Rothschild & Co Redburn; PT $335
• Establishment Labs (ESTA) Rated New Buy at Canaccord; PT $60
• Figma (FIG) Rated New Overweight at Piper Sandler; PT $85
• Go Residential REIT (GO/U CN) Rated New Outperform at CIBC; PT $24
• Iberdrola (IBE SM) ADRs Rated New Hold at Berenberg; PT $82
• Insmed (INSM) Rated New Outperform at William Blair
• IperionX (IPX AU) ADRs Rated New Buy at Roth Capital Partners; PT $64
• Kyverna Therapeutics (KYTX) Rated New Outperform at William Blair
• Leidos (LDOS) Rated New Underperform at Baptista Research; PT $183.20
• Meta (META) Rated New Buy at GF Securities; PT $928.50
• News Corp (NWSA) Rated New Hold at Baptista Research; PT $37.60
• Roper (ROP) Rated New Buy at Citi; PT $626
• Soleno (SLNO) Rated New Overweight at Wells Fargo; PT $123
• Suncor (SU CN) Rated New Outperform at Baptista Research
• Toast (TOST) Rated New Outperform at Baptista Research; PT $50.50
• Vertiv Holdings (VRT) Rated New Neutral at Rothschild & Co Redburn
• Zedcor Inc (ZDC CN) Rated New Buy at Stifel Canada; PT C$7

Data sources: Bloomberg, Reuters, CQG

David Wienke