Daily Game Plan

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

DATA/HEADLINES  8:00ET Fed’s Goolsbee speaks;  8:30ET Trade Balance; 9:15ET Fed’s Barr speaks; 9:50ET Fed’s Schmid
speaks; 10:00ET Fed’s Waller speaks;  12:00ET Fed’s Williams speaks; 1:25ET Fed’s Logan speaks; 3:00ET Consumer Credit; 1:00ET 3-year note auction

TODAY’S HIGHLIGHTS:  

• King Charles III delivers the first King’s Speech in more than 70 years
• Netanyahu says Israel will have ‘overall security’ role in Gaza for ‘indefinite period’
  
• Elon Musk’s Neuralink is ready for human testing,
  seeking a volunteer willing to have a chunk of their skull removed so a robot can insert a series of electrodes and super thin wires into their brain  

World shares lost steam overnight with the MSCI world equity index slipping 0.3% as investor enthusiasm about a peak in global interest rates faded. China’s imports
unexpectedly grew in October while exports contracted at a quicker pace, in a mixed set of indicators that underscore the ongoing risks that the world’s second-largest economy is grappling with. Trade with China’s major peers continued to contract, with exports
to Southeast Asia, its largest trade partner, down 15.1%. The IMF raised its projections for China’s GDP growth to 5.4% this year and 4.6% next.  On the war front, Israel gave civilians still trapped inside encircled Gaza City a four hour window to leave on
Tuesday, and residents escaping said they passed tanks in position to likely begin storming the city.                              

EQUITIES: 
   

US equity futures were back in the red after the Fed’s Neel Kashkari told the WSJ that overtightening monetary policy is preferable to doing too little. The Nasdaq
had logged a seventh straight session of gains on Monday, capping its longest streak since January. Downside risks are better priced after the recent pullback in global equities, according to HSBC strategists. They see a 10% upside from current levels. Citi
suggests little room for further gains. Meanwhile, earnings season continues…               

Futures ahead of the bell: E-Mini S&P -0.2%, Nasdaq -0.1%, Russell 2000 -0.5%, Dow -0.3%.

In pre-market trading, Uber slipped 2% as revenue fell short, citing accounting changes, overshadowing a beat on gross bookings and profit. Adtran (ADTN) falls 13% after the communications
equipment company reported third-quarter results that missed expectations and management suspended the dividend. Alteryx (AYX) rises 17% after the software company reported better-than-expected results. Clover Health (CLOV) drops 11% after reporting third
quarter revenue that missed.  Coherus Bio (CHRS) tumbles 20% as the biotech company cut its net product forecast. Crescent Point (CPG) falls 5% after the Canadian oil producer said it will buy Hammerhead Energy for about C$2.55 billion. DigitalOcean (DOCN)
gains 7% as Goldman Sachs double-upgrades its rating on the cloud computing firm to buy. Hims & Hers Health (HIMS) jumps 6% after reporting third-quarter revenue that beat. Perrigo (PRGO) slips 5% after the health-care firm trimmed the higher end of its profit
outlook for the full year. Planet Fitness (PLNT) jumps 8% after the fitness center operator reported third-quarter earnings per share that beat the average analyst estimate. RingCentral (RNG) climbs 7% after the communications software provider narrowed its
software subscription revenue guidance for the full year. TransMedics (TMDX) surges 42% after the organ transplant company boosted its sales forecast for the full year. TripAdvisor (TRIP) gains 10% after the online travel company reported third-quarter adjusted
earnings that came ahead of estimates. Ventyx (VTYX) sinks 75% after the biotech said it’s terminating its Phase 2 trial of VTX958 in plaque psoriasis and psoriatic arthritis. Vimeo (VMEO) rises 10% after the video software company boosted its guidance for
the full year.

European indices are lower following data that showed German industrial production fell more than expected in September. Production fell in September by 1.4% compared with the previous
month versus expectations for a 0.1% decline.  UK grocery inflation fell to single digits for the first time in 16 months, 9.7% from 11%, data showed. Oil producers dragged down European equity benchmarks, with Shell Plc and BP Plc sliding more than 1%. UBS
shares climbed 3% as stronger-than-expected client inflows and progress in cost savings overshadowed its first quarterly loss in six years. Watches of Switzerland Group, the top UK Rolex retailer, jumped 10% after saying it expects to more than double sales
and profits by 2028.  Cyclical sectors like miners, autos and banks fell, while financial services stocks and technology outperformed. Stoxx 600 -0.3%, DAX -0.2%, CAC -0.5%, FTSE 100 -0.1%. Energy -1.8%, Basic Resources –1.5%, Autos -1.2%. Financial Services
+1%, Technology +0.7%.                       

Asia bourses were lower, with Japan and Hong Kong losing more than 1% and South Korea’s Kospi sliding over 2% after Monday’s surge. The MSCI Asia Pacific Index fell 1.3%, with Alibaba,
Tencent and AIA Group among the top laggards. Data out of China showed exports shrank 6.4% from a year earlier in October, worse than a 3.3% expected fall.  Imports snapped eleven straight months of decline, rising 3.0% easily beating forecasts for a 4.8%
contraction. Chinese stocks fell following the data, which reinforced concerns about a fragile and uneven recovery. Kospi -2.3%, Hang Seng Index -1.6%, Nikkei 225 -1.3%, Vietnam -0.9%, Thailand -0.6%, CSI 300 -0.35%, Sensex was flat. Philippines +0.9%, Taiwan
+0.2%.

FIXED INCOME: 
 

Bond markets rallied, led by the UK, as Bank of England Chief Economist Huw Pill hinted rate cuts may be on the table by the middle of 2024 and German industrial
output figures suggested that recession isn’t far off.  US Treasuries are slightly richer across the curve, following the wider gains across European rates. US yields richer by less than 2bp across the curve. The US session includes at least seven Fed officials
scheduled to speak and $48b 3-year note sale.  WI 3-year yield is around 4.685% ahead of auction, ~5.5bp richer than the October result, which tailed by 1.7bp. 10 year yield ~4.625%. FED’S GOOLSBEE: AS LONG AS WE ARE MAKING PROGRESS ON INFLATION, TOPIC IS
THEN ONLY HOW LONG WE KEEP RATES AT THIS LEVEL.                  

METALS: 
   

Gold dropped to the lowest in almost two weeks on a fading Middle East war-risk premium and an increase in the dollar. Bullion has been gradually unwinding gains following the Hamas attack
on Israel in early October as the conflict shows little sign of spilling over.  Gold dropped as much as 0.8% on Tuesday, pressured by the stronger US dollar. Minneapolis Fed President Neel Kashkari on Monday said it’s too soon to declare victory over inflation
and that over-tightening monetary policy is preferable to doing too little. Spot gold -1%, silver -2.1%.

ENERGY:  

Oil prices hit fresh 2-1/2-month lows as mixed economic data from China offset the impact of Saudi Arabia and Russia extending output cuts.  WTI crude fell below
$80 per barrel for the first time since August after disappointing Chinese export readings. The decline was helped by signs from Israel that it’s open to pauses in the Gaza fighting.  Expectations of crude run reductions by China-based refiners between November
and December could also limit oil demand and exacerbate price declines.  OPEC+ said at a European Crude Conference that it sees a healthy global economy growing, with the US doing very well, although Europe is struggling.  WTI -2%, Brent -2%, US Nat Gas -3.5%,
RBOB -2%.

CURRENCIES:   

The dollar gained for a second consecutive day but still close to a near two-month low ahead of Federal Reserve officials’ speeches. Minneapolis Fed President Neel
Kashkari emphasized that it’s premature to declare victory over inflation. Elsewhere, the Reserve Bank of Australia raised its policy interest rate again, as expected, by another quarter point to a 12-year high of 4.35%. But the Aussie dollar skidded lower
as the RBA appeared to signal it’s now on pause along with other major central banks. USD/NOK rallied to a one-week high as oil prices fell due to uncertainties in demand and doubts about the Fed’s tightening policies despite Saudi Arabia and Russia extending
supply cuts. US$ Index +0.4%, GBPUSD -0.3%, EURUSD -0.3%, USDJPY +0.3%, AUDUSD -1.1%, USDNOK +0.9%, NZDUSD -0.8%.   

Bitcoin -0.8%, Ethereum -0.9%. 

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
• Appian (APPN) Raised to Buy at DA Davidson
• DigitalOcean (DOCN) Raised to Buy at Goldman; PT $33
• HP Inc (HPQ) Raised to Buy at Edward Jones
• MacroGenics (MGNX) Raised to Buy at Guggenheim; PT $12
• Monday.com (MNDY) Raised to Buy at DA Davidson; PT $170
• Spirit Realty (SRC) Raised to Neutral at BNPP Exane; PT $46
• Ventas (VTR) Raised to Outperform at Wedbush; PT $51
• Downgrades
• Adtran Holdings (ADTN) Cut to Neutral at Rosenblatt Securities Inc
• Ameresco (AMRC) Cut to Market Perform at William Blair
• Cut to Market Perform at Oppenheimer
• Codexis (CDXS) Cut to Hold at Benchmark
• Eversource (ES) Cut to Inline at Evercore ISI; PT $65
• Femsa (FEMSAUBD MM) ADRs Cut to Market Perform at Itau BBA; PT $127
• Fluor (FLR) Cut to Hold at CFRA
• Foot Locker (FL) Cut to Inline at Evercore ISI; PT $23
• Forrester Research (FORR) Cut to Market Perform at Barrington Research
• Gol (GOLL4 BZ) ADRs Cut to Neutral at Seaport Global Securities
• Kennedy-Wilson (KW) Cut to Underperform at BofA
• Mirati Therapeutics (MRTX) Cut to Market Perform at Leerink; PT $58
• Cut to Hold at Stifel; PT $59
• Northwestern (NWE) Cut to Neutral at Ladenburg Thalmann; PT $51
• Olo Inc (OLO) Cut to Market Perform at William Blair
• Peloton (PTON) Cut to Hold at Deutsche Bank
• Re/Max (RMAX) Cut to Underweight at Morgan Stanley; PT $9
• Sangamo (SGMO) Cut to Hold at Truist Secs
• Sonos (SONO) Cut to Neutral at BofA
• UDR (UDR) Cut to Equal-Weight at Wells Fargo; PT $34
• Ventyx Bio (VTYX) Cut to Neutral at HC Wainwright
• Cut to Equal-Weight at Wells Fargo; PT $8
• Zentalis (ZNTL) Cut to Market Perform at Leerink; PT $15
• Initiations
• Bridgebio (BBIO) Rated New Buy at Citi; PT $42
• Burlington Stores (BURL) Rated New Outperform at Evercore ISI; PT $150
• CI&T Inc (CINT) Rated New Buy at Banco BTG Pactual; PT $8
• Cytokinetics (CYTK) Rated New Buy at B Riley; PT $66
• Gap (GPS) Rated New Outperform at Evercore ISI; PT $17
• Home Depot (HD) Reinstated Sector Perform at RBC; PT $303
• Lowe’s (LOW) Reinstated Sector Perform at RBC; PT $194
• Macy’s (M) Rated New Inline at Evercore ISI; PT $13
• New Oriental Education (EDU) US Rated New Overweight at Morgan Stanley
• Nike (NKE) Rated New Outperform at Evercore ISI; PT $124
• On Holding (ONON) Rated New Outperform at Evercore ISI; PT $38
• Qualcomm (QCOM) Rated New Outperform at CICC; PT $136
• Revolve Group (RVLV) Rated New Inline at Evercore ISI; PT $14
• Ross Stores (ROST) Rated New Outperform at Evercore ISI; PT $140
• Savara (SVRA) Rated New Buy at Guggenheim; PT $7
• Tal Education (TAL) ADRs Rated New Overweight at Morgan Stanley

Data sources: Bloomberg, Reuters, CQG