Daily Game Plan

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

TODAY’S ECONOMIC DATA: 8:30ET August PPI; 10:00ET Wholesale Trade Sales, Wholesale Inventories;  1:00ET 10 Year
Note Auction                                                                                                                                                                                                                                                                                      

Highlights and News:  

• ORACLE SHARES RISE 30% AFTER COMPANY’S BLOWOUT REVENUE OUTLOOK
• Poland shoots down drones in its airspace during Russian attack on Ukraine
• First time a NATO member has fired shots in the conflict
• IDF issues another urgent evacuation warning for Gaza City residents
• US Mulls Severe Restrictions on Medicines from China: NYT
• Trump urges EU to impose 100% tariffs on China, India to pressure Putin

Global stocks rose, with technology shares leading after Oracle’s blowout revenue outlook. Uncertainty followed Poland’s downing of drones that violated its airspace
during a large-scale Russian assault in western Ukraine. It was the first time a NATO member has fired shots in the conflict. Polish Prime Minister Donald Tusk reported at least 19 violations of Polish airspace by suspected Russian drones during today’s attack
by Russia on Ukraine. Tusk said Poland is the closest it has been to open conflict since World War Two and asked to evoke Article 4 of NATO. Russia launched 502 attack and decoy drones plus 24 missiles in the latest overnight barrage, Ukraine’s air force said.
EU officials are currently in Washington to discuss coordination on new Russia sanctions with the US. Trump reportedly asked the EU to hit China and India with 100% tariffs to pressure Putin to end the war. Israel’s strike on Hamas in Qatar drew rare criticism
from Trump, who said he learned of the attack too late to stop it.

EQUITIES:   

US equity futures are mixed as S&P futures hover near record high and Nasdaq contracts edge firmer as Oracle’s blowout outlook keeps tech sentiment strong. Oracle shares soared to a record
in the pre-market after the company gave an aggressive outlook for its cloud business, stunning Wall Street and fueling optimism that the global AI infrastructure build-out is accelerating. With the latest leg of the stock rally driven by hopes that the Fed
will rapidly lower rates, investors believe that sticky wholesale and consumer inflation will remain sufficiently contained and give officials room to shore up the jobs market.  Barclays strategists raised their 2025 and 2026 targets for the S&P 500, citing
robust corporate earnings and stabilizing global economic growth. JPMorgan strategists see downside for the S&P 500 of almost 8% in the short term as expectations for interest rate cuts have become overblown and stock exposure elevated “at a time when inflation
prints are expected to ramp up.” JPMorgan, Fifth Third Bancorp and Barclays are among banks bracing for potentially hundreds of millions of dollars in combined losses from loans tied to subprime auto lender Tricolor.

Futures ahead of the data/bell: E-Mini S&P +0.3%, Nasdaq +0.3%, Russell 2000 -0.3, DJI -0.2%

In pre-market trading, Magnificent Seven stocks are mixed, with Nvidia outperforming after Oracle’s report. Stocks tied to AI computing infrastructure are rallying
after Oracle forecast faster-than-expected revenue growth in its cloud infrastructure unit. CoreWeave (CRWV) +7%, Arista Networks (ANET) +3%, AMD (AMD) +3%. Asset Entities (ASST) soars 121% after holders approved a merger with Vivek Ramaswamy’s Strive Enterprises,
marking the next step in creating a public Bitcoin treasury company. Bill Holdings (BILL) is up 6% after the Financial Times reports Elliott Management has built a large stake in the payments automation company. Fifth Third Bancorp (FITB) falls 3% after the
bank said it discovered allegedly fraudulent activity at one of its commercial borrowers. GameStop (GME) jumps 10% after the video-game retailer reported Hardware and Accessories net sales for the second quarter that beat. Nio ADRs (NIO) are down 8% after
the Chinese EV maker announced an equity offering of as much as 181.8 million class A shares. Oracle (ORCL) surges 32% after the software company gave a robust forecast for its cloud-infrastructure business, a sign of strong AI-related demand. Synopsys (SNPS)
shares are down 22% after the software company reported third-quarter results that featured a weak read on Design IP revenue. Travere Therapeutics (TVTX) soars 15% after the FDA informed the company that an advisory committee is no longer needed for its supplemental
drug application for the treatment of a rare kidney disorder.

European gauges started off stronger but then slipped after the Polish PM asked to evoke Article 4. Retailers lead gains after Zara-owner Inditex’s shares jumped after
a positive start to the third quarter reassured investors about growth prospects. Wegovy-maker Novo Nordisk said its plans to cut jobs and make other changes will save the firm around $1.26 billion annually. Tech shares gain after Oracle projected over half
a trillion dollars in booked cloud orders. Puig fell 6% after the Spanish beauty company reported results. France’s CAC 40 rose to a two-week high after President Emmanuel Macron appointed loyalist and former defense minister Sebastien Lecornu as prime minister
on Tuesday. Alstom gained as much as 7% after the French train maker struck a $1.17 billion deal with NJ Transit in the US.  The European central bank’s monetary policy verdict is due tomorrow, with economists expecting no change. Stoxx 600 +0.4%, DAX +0.1%,
CAC +0.5%, FTSE 100 +0.2%, Polish WIG20 Index -1.1%. Retail +1.5%, Aero & Defense +1.3%, Construction +0.7%. Travel & Leisure -0.8%, Chemicals -0.6%, Telecom -0.5%.

Shares in Asia were broadly higher, with the technology-dominated markets of South Korea and Taiwan leading gains to close at record highs. The MSCI Asia Pacific Index
advanced 0.9% to the highest level since February 2021. TSMC’s revenue rose 34% in August, signaling sustained global demand for cutting-edge AI silicon. The Kospi extends its seven-day rally to a new record, buoyed further by optimism that a proposal to lower
the threshold for capital-gains tax will be scrapped. Mainland China shares edged up but underperformed their regional peers, as sentiment softened after last week’s military parade. Chinese travel stocks rallied after data revealed strong travel demand for
the upcoming Golden Week. Australian lithium stocks declined as CATL prepares to resume production at a major mine in China sooner than investors expected. Kospi +1.7%, Taiwan +1.4%, Hang Seng Tech +1.3%, Singapore +1.1%, Hang Seng Index +1%, Indonesia +0.9%,
Nikkei 225 +0.9%, Sensex +0.4%, Vietnam +0.4%, ASX 200 +0.3%, CSI 300 +0.1%.

FIXED INCOME: 
 

Treasuries are narrowly mixed in early US trading with front-end yields slightly richer on the day and long-end underperforming, steepening the curve around the 10-year,
which is little changed. Focal points of US session include August PPI data in the morning and 10-year note reopening in early afternoon.  Front-end yields are 1bp-2bp richer on the day, long-end cheaper by similar amounts and the 10-year near 4.09%, widening
2s10s and 5s30s spreads steeper by 1bp-2bp. Money markets are projecting as many as three quarter-point rate cuts this year.

METALS: 

Gold hovered just below the new record as investors assessed heated tensions in the Middle East. Markets now expect the US Federal Reserve to reduce its lending rates
by 25 basis points on Wednesday next week, with a small probability of a 50-basis-point move, All eyes are on the US producer price inflation report, which is expected this morning, and the US consumer price inflation, which will be released on Thursday. Spot
gold +0.6%, Silver +0.6%, Copper futures +0.3%.

ENERGY:   

The oil market reacted to the Israeli strike, spiking briefly on escalation risks, but quickly retraced as markets judged the probability of escalation to be limited,
The EU is considering a faster phase-out of Russian fossil fuels as part of new sanctions against Moscow, European Commission chief Ursula von der Leyen said today. China’s secretive strategic oil reserve buying dominated Asia’s top oil summit, as its demand
remains crucial to supporting global markets. Global oil stockpiles have been swelling this year, with builds seen during a period when consumption typically runs strong, according to Goldman Sachs, which expects futures to drop to the $50s-a-barrel next year.
WTI +1.1%, Brent +1%, US Nat Gas -2%, RBOB +0.05%. 

CURRENCIES: 

In currency markets, the dollar is mixed versus its major peers ahead of producer price figures. PPI data today and CPI Thursday should counter or confirm current
dovish Fed pricing; risks of soft inflation prints have spurred exporters to buy the Aussie$ and kiwi atop G-10 currency leaderboard. The euro is slightly lower. Trump told European officials he’s willing to impose sweeping new tariffs on India and China to
push President Vladimir Putin to the negotiating table with Ukraine — but only if EU nations do so as well. US$ Index -0.01%, GBPUSD +0.02%, EURUSD -0.05%, USDJPY +0.1%, AUDUSD +0.3%, NZDUSD +0.3%, USDCHF +0.1%, USDCAD +0.1%, USDSEK -0.2%, USDNOK -0.5%.

Bitcoin +0.8%, 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
• Anglo American ADRs Raised to Hold at Berenberg; PT $15
• Baidu (BIDU) ADRs Raised to Buy at UOB Kay Hian; PT $150
• Equinox Gold (EQX CN) Raised to Outperform at RBC; PT C$17
• Gossamer Bio (GOSS) Raised to Buy at UBS; PT $9
• Iamgold (IMG CN) Raised to Outperform at RBC; PT C$19.36
• nCino (NCNO) Raised to Overweight at Morgan Stanley; PT $36
• Newmont Corp (NEM) Raised to Outperform at RBC; PT $95
• Nike (NKE) Raised to Buy at TD Cowen; PT $85
• Oracle (ORCL) Raised to Buy at BofA; PT $368
• Rocket Cos. (RKT) Raised to Buy at BofA
• Saia (SAIA) Raised to Positive at Susquehanna; PT $360
• Downgrades
• Acadia Health (ACHC) Cut to Neutral at BofA
• Bioceres Crop Solutions (BIOX) Cut to Hold at Canaccord; PT $2.50
• BXP (BXP) Cut to Neutral at Compass Point; PT $75
• Centerra Gold (CG CN) Cut to Sector Perform at RBC; PT C$14
• Coty (COTY) Cut to Hold at Berenberg
• HP Inc. (HPQ) Cut to Inline at Evercore ISI; PT $29
• Service Properties (SVC) Cut to Equal-Weight at Wells Fargo; PT $2.50
• Synopsys (SNPS) Cut to Neutral at Baird; PT $535
• Tourmaline Bio Inc (TRML) Cut to Neutral at HC Wainwright
• Cut to Neutral at Chardan Capital Markets
• Cut to Hold at Truist Secs; PT $48
• Cut to Hold at Jefferies; PT $47.50
• Trade Desk (TTD) Cut to Equal-Weight at Morgan Stanley; PT $50
• Initiations
• Ametek (AME) Rated New Equal-Weight at Barclays; PT $200
• Bakkt Holdings (BKKT) Rated New Buy at Clear Street; PT $14
• BankUnited (BKU) Rated New Overweight at Cantor; PT $44
• Citizens Financial (CFG) Rated New Overweight at Cantor; PT $61
• Comerica (CMA) Rated New Neutral at Cantor; PT $72
• Cullen/Frost (CFR) Reinstated Neutral at Cantor; PT $138
• East West Bancorp (EWBC) Reinstated Overweight at Cantor; PT $124
• Excelerate Energy (EE) Rated New Buy at DNB Carnegie; PT $31
• FB Financial (FBK) Rated New Overweight at Cantor; PT $61
• Firefly Aerospace (FLY) Rated New Buy at Roth Capital Partners; PT $60
• First Finl Bankshares (FFIN) Rated New Neutral at Cantor; PT $39
• Flagstar Financial (FLG) Rated New Overweight at Cantor; PT $15
• Home BancShares (HOMB) Rated New Neutral at Cantor; PT $32
• Janux Therapeutics (JANX) Resumed Buy at Stifel; PT $45
• Rated New Buy at Truist Secs; PT $100
• Live Oak Banc (LOB) Rated New Neutral at Cantor; PT $42
• M&T Bank (MTB) Rated New Overweight at Cantor; PT $228
• Microsoft (MSFT) Rated New Buy at China Merchants; PT $585
• Nubank (NU) Reinstated Buy at William O’Neil
• Prosperity Banc (PB) Rated New Overweight at Cantor; PT $78
• Ralliant (RAL) Rated New Outperform at Oppenheimer; PT $55
• Regions Financial (RF) Rated New Overweight at Cantor; PT $30
• Revvity (RVTY) Rated New Buy at Baptista Research; PT $111.40
• Syndax Pharmaceuticals (SNDX) Resumed Buy at Stifel; PT $44
• Take-Two (TTWO) Rated New Buy at William O’Neil
• Valley National (VLY) Reinstated Outperform at Hovde Group; PT $12.50
• Rated New Overweight at Cantor; PT $12
• Webster Financial (WBS) Rated New Overweight at Cantor; PT $70
• Zions (ZION) Reinstated Overweight at Cantor; PT $64

Data sources: Bloomberg, Reuters, CQG

David Wienke