Daily Game Plan

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

DATA/HEADLINES 8:30ET Weekly Jobless Claims; 10:00ET Factory Orders, Durable Goods Orders

US 3Q Non-Farm Productivity +4.7%; Consensus +4.3%. US 3Q Unit Labor Costs -0.8%; Consensus +0.7%.

TODAY’S HIGHLIGHTS:  

• Legendary basketball coach Bob Knight dies at 83
  
• Bank of England Keeps Rates On Hold For Second Successive Meeting As Expected
  

Global shares and bonds extended a rally as comments from Federal Reserve chief fueled optimism that US interest rates have finally peaked, while anticipating a comparable
signal from the Bank of England today. While the Fed left the door open to another increase after pausing Wednesday, officials hinted that a run-up in long-term Treasury yields reduces the impetus to tighten policy further. The MSCI World index rose 0.6%.
Brazil’s central bank cut rates by 50 bps and Norway’s central bank held its benchmark rate at 4.25%. On the war front, Israel said its forces are pushing deeper into Gaza, including making advances into Gaza City in the north, amid heavy fighting against
Hamas. Biden said Israel and Hamas should “pause” fighting to allow time to free more hostages from Gaza. Hamas said 600 more foreigners and dual nationals, including 400 American citizens, are expected to leave Gaza today.                            

EQUITIES: 
   

US equity futures extend Wednesday’s gains after the Fed held interest rates steady and the Treasury announced plans to slow the pace of increases in quarterly long-term
securities sales. It’s been a strong week for earnings so far. 72% that have reported this week have beaten EPS estimates while 60% have beaten sales estimates.  Investors are now awaiting results from Apple after the bell, with investor focus on the China
outlook given weak early sales.  The next focal point will be employment data on Friday, which analysts expect to show the economy added 180,000 jobs in October, slowing from a 336,000 increase the previous month.              

Futures ahead of the bell: E-Mini S&P +0.7%, Nasdaq +1.1%, Russell 2000 +1.25%, Dow +0.5%.

In pre-market trading, Starbucks (SBUX) rose 6% after sales surpassed expectations. Moderna (MRNA) fell 7% on a bigger-than-expected loss of $3.6 billion due to Covid inventory write-downs.
Eli Lilly fell after cutting its EPS outlook. DoorDash (DASH) jumps 11% after third-quarter results beat expectations. Camping World (CWH) gains 7% after the retailer of new and used RVs posted a 3Q profit that topped estimates. Confluent (CFLT) slumps 35%
after the software company narrowed its total revenue guidance for the full year. Elf Beauty (ELF) surges 14% after the cosmetics brand boosted its full-year guidance. Etsy (ETSY) shares fall about 5% after the e-commerce company provided a weak gross merchandise
sales outlook. Fastly (FSLY) gains 14% after the infrastructure software company narrowed its adjusted loss-per-share forecast for the year. Lemonade Inc. (LMND) jumps 14% after the insurance company boosted its revenue guidance. Palantir Technologies (PLTR)
rises 12% after posting its fourth consecutive quarter of profitability. Peloton (PTON) falls 7% after the fitness company said it expects revenue to fall. Roku (ROKU) climbs 18% after reporting third-quarter results that beat expectations. Solar stocks fall
after solar equipment-makers SolarEdge (SEDG) and Sunrun (RUN) missed 3Q sales estimates.

European gauges rose into the Bank of England rate decision. The BOE left rates unchanged and said ‘restrictive’ policy is likely needed for an extended period. BOE’s Bailey said it is
much too early to be thinking about rate cuts. The final euro area manufacturing PMI came in at 43.1 in October, down from 43.4 in September. Swiss inflation stalled in October, strengthening the case for the SNB to hold next month. Europe’s STOXX 600 is on
course for its first four-day run of gains since July, with rate sensitive real estate stocks leading today’s advance.  Novo Nordisk A/S rose after reporting that third-quarter sales surged amid the frenzy for its blockbuster obesity and diabetes drugs. Shell
gained after accelerating the pace of share buybacks as its third-quarter profit rose. Stoxx 600 +1.5%, DAX +1.6%, CAC +1.9%, FTSE 100 +1.2%. REITs +5.8%, Technology +3.7%, Construction +3%.                 

Stocks in Asia rallied, with heavyweight tech shares getting an added boost from Advanced Micro Devices’ strong sales forecast. The MSCI Asia Pacific Index climbed 1.4% with TSMC, Samsung
Electronics and Alibaba leading gains. Shares in mainland China declined, bucking the regional trend, with mixed signals on its economic recovery.  Chinese financial regulators are investigating a month-end liquidity crunch that saw short-term money rates
surge to as much as 50% earlier this week, asking institutions to explain why they borrowed at extremely high rates.  Japan’s PM Fumio Kishida announced an economic package worth more than ¥17 trillion ($113 billion) as his administration tries to shore up
falling support. Vietnam +3.4%, Taiwan +2.2%, Kospi +1.8%, Thailand +1.7%, Nikkei 225 +1.1%, ASX 200 +0.9%, Sensex +0.8%, Hang Seng +0.75%. China’s CSI 300 -0.4%.            

FIXED INCOME: 
 

Treasuries were slightly higher, with yields down across the curve, adding to Wednesday’s session gains spurred by the Treasury’s refunding details and Fed Chair
Jerome Powell’s press conference. US yields richer by up to 7bp across long-end of the curve, which outperforms, flattening 5s30s, 2s10s spreads by 2bp and 4bp on the day; 10-year yields around 4.685% and near bottom of days range into early US session.  Markets
have priced in a 70% chance that the tightening is now over and US rate cuts could begin as soon as June.       

METALS: 
   

Gold edged higher, following a three-day decline, as investors cut bets on further monetary tightening following a Federal Reserve meeting.  Gold is still near $2,000 an ounce after jumping
7.3% in October on fears the Israel-Hamas war would morph into a regional conflict. While the war has so far remained contained, bullion has retained most of its earlier gains. Spot gold +0.3%, silver +0.2%.    

ENERGY:  

Oil prices climbed along with broader financial markets after the Federal Reserve hinted it might be done with raising interest rates, buoying a shaky demand outlook.
Brent crude oil rose past $85 a barrel, after sliding around 5% over the previous three sessions. US crude exports dropped in October as demand from Asia and Europe faded, causing inventories to build on the Gulf Coast.  China’s crude demand jumped to 16.8
million b/d in October as consumption “decoupled” from its economy, JPMorgan said. Still, global usage was about 100,000 b/d below expectations. WTI +1%, Brent +0.9%, US Nat Gas -1.6%, RBOB +0.8%.      

CURRENCIES:   

The dollar is back-pedaling, much to the relief of the Japanese yen and the dozens of emerging market currencies that have been suffering this year. The yen held
gains as Reuters reported the BOJ plans to gradually exit its ultra-easy monetary policy next year. The South Korean won led emerging-market currencies higher. The dollar extended its Fed-induced decline while the pound firmed as traders focus on the Bank
of England policy decision.  Risk-sensitive currencies trade better bid, with the New Zealand dollar outperforming its Group-of-10 peers. US$ Index -0.75%, GBPUSD +0.55%, USDJPY -0.5%, EURUSD +0.8%, AUDUSD +0.7%, NZDUSD +1%.

Bitcoin -0.3%, Ethereum -1.1%.   

TECHNICAL LEVELS: 

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
• Amgen (AMGN) Raised to Buy at Truist Secs; PT $320
• Cemex (CEMEXCPO MM) ADRs Raised to Buy at Citi; PT $8.20
• Clorox (CLX) Raised to Buy at Citi; PT $150
• Generac (GNRC) Raised to Buy at Stifel; PT $135
• Janus Henderson (JHG) Raised to Market Perform at KBW; PT $26
• KB Home (KBH) Raised to Buy at Seaport Global Securities
• MDC Holdings (MDC) Raised to Buy at Seaport Global Securities
• Meritage Homes (MTH) Raised to Buy at Seaport Global Securities
• Methanex (MX CN) Raised to Neutral at UBS; PT $45
• Rayonier (RYN) Raised to Buy at Seaport Global Securities; PT $32
• Roku (ROKU) Raised to Hold at Pivotal; PT $75
• Silicon Labs (SLAB) Raised to Equal-Weight at Barclays
• Taylor Morrison (TMHC) Raised to Buy at Seaport Global Securities
• TE Connectivity (TEL) Raised to Buy at CFRA
• Toll Brothers (TOL) Raised to Buy at Seaport Global Securities
• Trade Desk (TTD) Raised to Neutral at New Street Research; PT $69
• TTM Tech (TTMI) Raised to Buy at Truist Secs; PT $16.50
• Downgrades
• Bristol Myers (BMY) Cut to Neutral at Daiwa; PT $54
• Community Healthcare Trust (CHCT) Cut to Inline at Evercore ISI; PT $32
• Confluent (CFLT) Cut to Underperform at BofA; PT $24
• Envista Holdings (NVST) Cut to Neutral at Piper Sandler; PT $25
• Estee Lauder (EL) Cut to Market Perform at Telsey; PT $115
• Cut to Sector Perform at RBC; PT $115
• InflaRx (IFRX) Cut to Market Perform at LifeSci Capital
• Iqvia (IQV) Cut to Neutral at Baird; PT $202
• Oneok (OKE) Cut to Hold at Truist Secs; PT $68
• Paycom Software (PAYC) Cut to Peerperform at Wolfe
• Procore Technologies (PCOR) Cut to Perform at Oppenheimer
• Cut to Hold at Jefferies; PT $55
• Qorvo (QRVO) Cut to Hold at Summit Insights
• SolarEdge (SEDG) Cut to Neutral at Guggenheim
• Cut to Market Perform at BMO; PT $68
• Cut to Hold at Truist Secs; PT $70
• Sunrun (RUN) Cut to Market Perform at Northland; PT $12
• Cut to Market Perform at BMO; PT $12
• Initiations
• Adverum Bio (ADVM) Rated New Buy at Mizuho Securities; PT $2
• Amazon (AMZN) Rated New Buy at HSBC; PT $160
• Apellis Pharma (APLS) Rated New Neutral at Mizuho Securities; PT $42
• Eyepoint (EYPT) Rated New Buy at Mizuho Securities; PT $20
• Immatics (IMTX) Rated New Overweight at Cantor
• Immunocore (IMCR) ADRs Rated New Overweight at Cantor
• Merus BV (MRUS) Rated New Buy at Canaccord; PT $45
• MoonLake Immunotherapeutics (MLTX) Rated New Buy at Stifel; PT $74
• Okyo Pharma (OKYO) Rated New Buy at HC Wainwright; PT $4
• WK Kellogg (KLG) Rated New Neutral at JPMorgan; PT $11

Data sources: Bloomberg, Reuters, CQG