Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Jobless Claims, Trade Balance, Exports, Imports; 10:00ET Wholesale Inventories, Wholesale
Trade; 1:00ET 30-year bond auction

Highlights and News:  

• Russia says Ukraine launched major drone attack, including on Moscow
• Lilly’s Experimental Shot Cuts Body Weight by 23% in Study
• US nuclear-capable bombers join Japanese jets in show of force after China-Russia drills
• Dark-Fleet Tanker At Epicenter Of Iran’s Shadow Oil Trade Seized By US Commandos
• Ukraine Allies to Meet Today as Kyiv Sends Draft Plan to Trump
• Microsoft Plans New Agentic AI Model Release on Friday
  

Global stocks dipped in mostly cautious trading, primarily driven by renewed concerns over escalating AI infrastructure spending following Oracle Corp.’s earnings
miss and raised capital expenditure guidance of $50 billion for 2026. Oracle forecast sales and profit that missed analyst estimates on Wednesday, while saying that spending would be higher than the $35 billion figure the company estimated in September. This
has triggered a broad retreat from risk assets, particularly in technology-heavy indices, though some dip-buying has limited deeper losses. Meanwhile, Russia said that Ukraine had launched a major aerial attack overnight with at least 287 drones downed over
several regions including Moscow. US nuclear-capable bombers flew over the Sea of Japan alongside Japanese fighter jets on Wednesday in a show of force following Chinese and Russian drills around Japan and South Korea. Elsewhere, more than 30 US sanctioned
oil vessels doing business in Venezuela could face punishment by Washington after the Coast Guard seized a supertanker carrying Venezuelan crude for export.

EQUITIES: 

US equity futures trimmed earlier overnight losses as dip buyers emerged following a widespread pullback in risk assets triggered by concerns over Oracle Corp.’s massive, planned spending
on AI infrastructure. Oracle’s closely watched metric for future cloud contracts also missed Wall Street estimates. The results reignited investor concerns over stretched tech valuations and the uncertain payoff from massive AI infrastructure spending, echoing
the worries that drove weeks of market volatility in November. Elsewhere in AI, Microsoft’s CEO said the company will unveil a new model on Friday that is “going to take agents to the next level.”  Yesterday’s rate cut boosted stocks, but markets are now pricing
in only one more cut in 2026 amid sticky inflation and labor market risks.  US non-farm payrolls due December 16 could sway sentiment. Expect volatility ahead of earnings from Broadcom, Costco, and others today. A next-generation obesity shot from Eli Lilly
& Co. helped patients lose almost a quarter of their body weight, potentially making the experimental drug the most potent weight-loss medicine yet.

Futures ahead of the bell: E-Mini S&P -0.35%, Nasdaq -0.6%, Russell 2000 -0.05%, DJI ~flat.

In pre-market trading, Ciena shares (CIEN) rise 10% after it forecast first-quarter revenue that beat the average analyst estimate. Eli Lilly & Co. (LLY) gains 1.2%
after a next-generation obesity shot helped patients lose almost a quarter of their body weight in 68 weeks. Gemini Space Station Inc. shares (GEMI) rise 14% after the crypto exchange founded by the Winklevoss twins said it received a Designated Contract Market
license from the Commodity Futures Trading Commission. Netflix (NFLX) rises 1.1% as Bernstein says it needs to make sure it has an exit strategy in case the bidding war for Warner Bros. “turns irrational.” Oracle (ORCL) falls 13% after the company forecast
3Q cloud sales growth below analyst estimates. Planet Labs shares (PL) soar 20% after the satellite imaging firm raised its FY sales and margin outlook. Roku shares (ROKU) are up 3.5% after Jefferies raises the stock to buy from hold, seeing upside to consensus
estimate on platform revenues next year.

Traders will get another read on the strength of the AI trade when Broadcom reports after the close. The stock has surged more than 200% from its April low.

European gauges edged higher as investors weighed a slate of upbeat earnings updates against renewed jitters around high artificial intelligence spending. Construction
and bank sectors outperforms, while utilities lag. Software stocks, including SAP SE and Sage Group were down after US tech giant Oracle Corp. reported disappointing cloud sales and a jump in AI-related spending. Nilfisk shares surge as much as 35%, the most
on record, after the cleaning products manufacturer received a takeover offer from Freudenberg Group. Ceres Power shares sink as much as 15% after Grizzly Research discloses that it’s short the clean-energy technology stock. Stoxx 600 +0.3%, DAX +0.25%, CAC
+0.6%, FTSE 100 +0.02%. Construction +1.3%, Banks +1.1%, Retail +0.9%. Utilities -0.7%. 

Shares in Asia erase early gains, with the MSCI Asia Pacific Index falling 0.6%, dragged by a slide in technology shares as disappointing earnings from Oracle offset
optimism over the Federal Reserve’s rate cut. SK Hynix declined after Korea Exchange issued an alert on the stock and prohibited margin trading after big gains. Hang Seng was little changed despite broad tech weakness. Meanwhile, Mexico’s Congress granted
final approval to new tariffs on imports from Asia, largely aligning with U.S. efforts to erect tougher trade barriers against China. In Tokyo, stocks fell sharply as investors braced for next week’s Bank of Japan policy meeting, where a rate hike is now widely
anticipated. Taiwan -1.3%, Thailand -1.3%, Vietnam -1.2%, Topix -0.9%, CSI 300 -0.9%, Kospi -0.6%, Hang Seng Index -0.05%. ASX 200 +0.15%, Singapore +0.2%, Philippines +0.5%, Sensex +0.5%.

FIXED INCOME: 
 

Treasuries hold small gains in early US session, broadly holding Wednesday’s curve-steepening rally that followed the FOMC rate decision. OIS contracts price in around
50% odds of another 25bp rate cut in March. Trading of short-term rate products remains in focus as the Fed’s plan, also announced Wednesday, to buy $40 billion of Treasury bills per month for reserve management starting Friday spurred record volumes in SOFR-fed
funds basis and supported front-end swap spreads. Yields are 1bp-2bp richer on the day with belly outperforming. 10-year yield eases two basis points to 4.13%; 5s30s curve +1.5bps, 2s10s curve -0.5bps. Week’s Treasury auction cycle concludes with $22 billion
30-year bond reopening at 1:00ET.

METALS: 

Gold edged lower as traders looked for clues on the Fed’s outlook for interest rates after Wednesday’s loosening showed a lack of unanimity among policymakers. Spot
silver is higher around $62.20 an ounce, having earlier touched a record high of $62.88, taking its year-to-date surge to 115% amid robust industrial demand, shrinking inventories, and its recent inclusion on the US critical minerals list. Investors are now
looking out for November’s non-farm payrolls and unemployment rate data, due on December 16, for further clues on the Fed’s next move. Spot gold -0.5%, Silver +0.5%, Copper futures +1.1%.

ENERGY:   

Oil prices eased as investors turned their attention back to Russia-Ukraine peace negotiations and watched for any fallout from the US seizure of a sanctioned tanker
carrying Venezuelan crude. Experts and analysts say the new US sanctions targeting Venezuela-origin crude cargoes are likely to cause near-term delays in exports and may deter some shipowners from participating, as Washington had previously avoided directly
disrupted Venezuela’s oil exports, which are typically transported via third-party vessels by intermediaries. Russia’s defense ministry said at least 40 Ukrainian drones were shot down over the Moscow region during a major aerial attack. The extent of the
damage was not immediately clear, but flights were diverted from all of Moscow main airports. The IEA trimmed estimates for a global oil supply surplus this year and next for the first time in several months as demand strengthens and output growth slows. WTI
-1.1%, Brent -1.1%, US Nat Gas -3.5%, RBOB -0.6%. 

CURRENCIES: 

In currency markets, the Swiss franc led gains in the Group-of-10 currencies after The Swiss National Bank kept its interest rate at zero, judging that a weakened
inflation outlook doesn’t yet justify a return to negative borrowing costs. The dollar erases an early advance as risk sentiment improves after the London open. Aussie dollar slumps as local yields fall following a surprise employment drop. The yen is a touch
firmer, while yuan holds ground after the PBOC strengthens daily fixing by most since September. US$ Index -0.3%, GBPUSD +0.02%, EURUSD +0.15%, USDJPY -0.3%, AUDUSD -0.3%, NZDUSD -0.05%, USDCHF -0.45%, USDCAD +0.05%, USDSEK -0.1%, USDNOK +0.1%.

Bitcoin -2.5%, Ethereum -4.2%.   

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
• Bausch + Lomb (BLCO CN) Bausch + Lomb Raised to Buy at Citi; PT $20
• BCE (BCE CN) Raised to Outperform at BMO; PT C$37
• Capital Power (CPX CN) Raised to Outperform at ATB Capital; PT C$75
• Dlocal (DLO) Raised to Buy at Truist Secs; PT $16
• DTE Energy (DTE) Raised to Buy at Jefferies; PT $150
• Fortrea Holdings (FTRE) Raised to Buy at Citi
• Global-e Online (GLBE) Raised to Hold at Truist Secs; PT $41
• JB Hunt (JBHT) Raised to Buy at Deutsche Bank; PT $227
• JBS (JBS) Raised to Outperform at Grupo Santander; PT $17
• Penumbra (PEN) Raised to Buy at Citi; PT $350
• Pilgrim’s Pride (PPC) Raised to Outperform at Grupo Santander; PT $56
• Pinnacle Financial (PNFP) Raised to Strong Buy at Raymond James
• Roku (ROKU) Raised to Buy at Jefferies; PT $135
• Soluna Holdings (SLNH) Raised to Buy at HC Wainwright; PT $5
• Thermo Fisher (TMO) Raised to Buy at Citi
• Tilray Brands (TLRY) Raised to Sector Perform at ATB Capital; PT $8.50
• Unity Software (U) Raised to Buy at BTIG; PT $60
• Raised to Overweight at Piper Sandler; PT $59
• Downgrades
• 10X Genomics (TXG) Cut to Neutral at Citi; PT $18
• ACV Auctions (ACVA) Cut to Hold at Jefferies; PT $9
• Alexander & Baldwin (ALEX) Cut to Neutral at Janney Montgomery; PT $21
• Citizens Financial (CFG) Cut to Neutral at Baird; PT $60
• First Horizon (FHN) Cut to Neutral at Baird; PT $25
• GE Vernova (GEV) Cut to Neutral at Seaport Global Securities
• Gran Tierra (GTE) Cut to Sector Underperform at Peters & Co; PT $3.62
• Haemonetics (HAE) Cut to Neutral at Citi; PT $88
• Intuitive Surgical (ISRG) Cut to Neutral at Citi; PT $635
• Norfolk Southern (NSC) Cut to Hold at Deutsche Bank
• Qiagen (QGEN) Cut to Neutral at Citi
• Telus (T CN) Cut to Market Perform at BMO; PT C$19
• Truist Financial (TFC) Cut to Neutral at Baird; PT $52
• Union Pacific (UNP) Cut to Hold at Deutsche Bank
• Initiations
• Abercrombie & Fitch (ANF) Rated New Buy at Goldman; PT $120
• Alphatec Holdings (ATEC) Rated New Buy at Freedom Capital; PT $25
• American Eagle (AEO) Rated New Neutral at Goldman; PT $25
• Aritzia (ATZ CN) Rated New Buy at Goldman; PT C$130
• Boot Barn (BOOT) Rated New Buy at Goldman; PT $225
• Bridgebio (BBIO) Rated New Outperform at Bernstein; PT $94
• BrightSpring (BTSG) Rated New Overweight at Stephens; PT $44
• Carter’s (CRI) Rated New Sell at Goldman; PT $26
• Casella Waste (CWST) Rated New Neutral at JPMorgan; PT $112
• CG Oncology (CGON) Rated New Outperform at Wedbush; PT $70
• Chime Financial (CHYM) Rated New Buy at B Riley; PT $35
• Citizens Financial (CFG) Rated New Buy at William O’Neil
• D-Wave Quantum (QBTS) Rated New Outperform at Mizuho Securities; PT $46
• GCT Semiconductor Holding (GCTS) Rated New Buy at HC Wainwright; PT $3
• Gorilla Technology Group (GRRR) Reinstated Overweight at Cantor; PT $31
• Inhibikase Therapeutics (IKT) Rated New Overweight at Cantor; PT $4
• IonQ (IONQ) Rated New Outperform at Mizuho Securities; PT $90
• Option Care Health (OPCH) Reinstated Overweight at Stephens; PT $40
• Oscar Health (OSCR) Rated New Equal-Weight at Stephens; PT $17
• Ovid Therapeutics (OVID) Rated New Buy at Roth Capital Partners; PT $3
• Rigetti Computing (RGTI) Rated New Outperform at Mizuho Securities
• Signet (SIG) Rated New Neutral at Goldman; PT $96
• Supervielle (SUPV AR) ADRs Reinstated Outperform at Itau BBA; PT $15
• Trinity Capital (TRIN) Rated New Buy at Lucid Capital Markets; PT $17

Data sources: Bloomberg, Reuters, CQG

David Wienke