Daily Game Plan

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

TODAY’S ECONOMIC DATA:  9:00ET FHFA House Price Index; 9:45ET MNI Chicago PMI; 10:30ET Dallas Fed Services Activity;
2:00ET FOMC Meeting Minutes

Highlights and News:  

• Trump warned that Hamas would be given a “very short period of time” to disarm
  
• Saudi Arabia issues national security warning as UAE forces asked to leave Yemen
• China encircles Taiwan in massive military display
• Russia says its negotiating stance on Ukraine will toughen after accusing Kyiv of attack
• Trump said the US struck a facility inside Venezuela
  
• Trump vowed to strike Iran again if the country tries to rebuild its nuclear capabilities
  

Global stocks inched higher in thin, holiday-shortened volumes, with European markets hitting record highs after a subdued session in Asia. Gulf equity indexes mostly
fell as tension flared between regional oil powers Saudi Arabia and the United Arab Emirates. Saudi Arabia declared today that its national security is a red line and endorsed a demand for UAE forces to withdraw from Yemen within 24 hours, shortly after a
Saudi-led coalition conducted an airstrike on the southern Yemeni port city of Mukalla. Meanwhile, China launched rockets into waters surrounding Taiwan, unveiled new assault ships, and downplayed the likelihood of US or allied intervention in any future attempt
by Beijing to seize control of the island, during its largest war games to date. Chinese naval and air force units also simulated strikes on maritime and aerial targets and carried out anti-submarine drills around the island. Trump’s campaign to end the war
in Ukraine encountered new setbacks on Monday after Putin announced he would revise Russia’s negotiating stance, citing claims that Ukrainian drones had targeted his residence. Zelenskiy rejected the allegation as a “new lie” and warned that Moscow might be
fabricating it as a pretext for launching attacks on government buildings in Kyiv.

EQUITIES: 

US equity futures are muted as investors await the latest Fed minutes for fresh insights into the interest rate outlook and digest the news from Ukraine peace efforts. Winter Storm Ezra
continued to disrupt holiday travel across the Northeast, Midwest, and Great Lakes regions of the US for a third consecutive day on Monday, resulting in thousands of flight delays and hundreds of cancellations. Meteorologists also warned of an intensifying
“bomb cyclone” that could cause additional travel chaos leading into the New Year’s holiday. In corporate news, Citigroup expects to post a roughly $1.1 billion after-tax loss on the sale of its remaining business in Russia to Renaissance Capital. Meta agreed
to buy Singapore-based startup Manus, an AI agent that can complete general tasks including screening resumes and analyzing stocks. Peruvian conglomerate Credicorp agreed to buy Miami-based financial firm Helm Bank USA to cater to Latin American clients in
the region.

Futures ahead of the bell: E-Mini S&P -0.02%, Nasdaq -0.02%, Russell 2000 +0.15%, DJI -0.01%.

In pre-market trading, Silver and gold mining stocks are higher as the precious metals rebound. Among silver stocks: Pan American Silver (PAAS) +3.4%, Coeur Mining
+3.3%, Hecla Mining +3%, Silvercorp Metals +2.9%, First Majestic Silver +2.9%. Gold stocks: Sibanye Stillwater ADRs +6.8%, Gold Fields ADRs +3.5%, Equinox Gold +2.6%, Agnico Eagle Mines +2.5%, Newmont +2.4%, Barrick Mining +2.4%, Freeport-McMoRan +1.8%. OceanFirst
Financial (OCFC) slips less than 1% on light trading after agreeing to buy Flushing Financial. T1 Energy Inc. (TE) climbs 5% after the solar equipment manufacturer announced the completion of a $160 million sale of Section 45X production tax credits.

European gauges nudge higher to record highs, boosted by gains in miners as precious metals prices recover. The Stoxx Europe 600 Index is near the highs of the day,
at an all-time peak. Germany’s DAX Index also advances on the final trading day of the year for the benchmark. The gauge is heading for its biggest annual gain since 2019 on optimism around a boost from bumper fiscal stimulus. The mining sector advanced over
1.7% as copper prices headed for the longest winning run since 2017. Banks and technology stocks also outperformed, while food and beverage as well as personal care shares were the biggest laggards. Fresnillo shares climb over 5% after Citigroup analysts boosted
their price target on the company while maintaining a buy rating. Stoxx 600 +0.55%, DAX +0.6%, CAC +0.55%, FTSE 100 +0.5%. Basic Resources +1.8%, Banks +1.5%, Technology +0.9%. Food & Bev -0.1%.

Shares in Asia stalled as a seven-day winning streak came to an end.  The MSCI Asia Pacific index dipped 0.1%, with gains in Hong Kong failing to outweigh losses in
Taiwan and Japan. Today marked the last trading day of the year for several Asian markets, including Japan, South Korea and Thailand. The Philippines remained closed for a holiday. Meanwhile, China’s new round of military drills around Taiwan also weighed
on investor sentiment.  It was a busy day for stock market listings in Hong Kong, with some of the debuts trading mostly higher. Insilico Medicine Cayman TopCo, an AI drug discovery startup, jumped as much as 48%. Chinese semiconductor-related stocks rise
after SMIC and some chip funds in the nation agreed to boost capital of their joint venture SMSC to $10b from $6.5b. The US government has granted Samsung Electronics and SK Hynix an annual license to bring chip manufacturing equipment to their Chinese facilities
for 2026, Reuters reports. Topix -0.5%, Taiwan -0.4%, Kospi -0.15%, ASX 200 -0.1%, Sensex ~flat. CSI 300 +0.3%, Thailand +0.45%, Singapore +0.5%, Vietnam +0.7%, Hang Seng Index +0.9%, Hang Seng Tech +1.7%.

FIXED INCOME: 
 

Treasury yields are higher across the curve as US trading gets under way for the year’s final full session. Yields are higher by about 1bp – 3bps, with the 10-year
near 4.14%: 2s10s +2bps.  The Fed is set to release minutes of the December FOMC meeting at 2:00ET. Treasuries are headed for a small monthly loss amid signs of US economic resilience, yet still on pace for their best annual performance since 2020. Trump teased
that he has a preferred candidate to succeed Fed Chair Jerome Powell but is in no hurry to make an announcement.

METALS: 

Silver and gold regained their footing after plunging from fresh all-time highs yesterday. Liquidity across most markets remained thin in a holiday-shortened week,
which exacerbated volatile price swings in silver and other precious metals overnight. Silver futures hit a record high on Monday, before gains quickly vanished and the metal logged its largest single-day drop since February 2021 and closing the session down
8.7%. Copper prices, which are on track for their best year since 2009, are also on the advance. Spot gold +1.5%, Silver +5.9%, Copper futures +3.1%.

ENERGY:   

Oil prices held their overnight gains as Russia accused Ukraine of attacking President Putin’s residence. Moscow provided no evidence for its claims, but the Kremlin
said its position would toughen in talks on ending the war.  Also adding to global geopolitical tensions, President Trump said he could support another major strike on Iran and said the US struck a facility inside Venezuela, in what would be a significant
escalation in its campaign against alleged drug trafficking operations there.  Saudi Arabia told the UAE to withdraw its forces from Yemen and halt support for armed groups there, escalating tensions between the oil-rich allies over the conflict in Yemen.
The Saudi foreign ministry accused the UAE of “pressuring” a separatist group in the south of the country to launch military operations near the kingdom’s border, saying “the steps taken by the UAE are considered highly dangerous”. OPEC+ is poised to maintain
its planned output pause at this weekend’s meeting, as Saudi Arabia and Russia review supply policy amid signs of global oil oversupply, delegates said. WTI +0.4%, Brent +0.4%, US Nat Gas +2.4%, RBOB +0.2%. 

CURRENCIES: 

In currency markets, the dollar is marking time before the 2 p.m. ET release of minutes from the Fed’s December meeting which are expected to showcase a divided central
bank unsure of its policy path next year. The euro is flat with little reaction seen after Spanish harmonized CPI slowed as expected. The Swedish Krona edges lower. Officials at the Riksbank appear convinced that unchanged borrowing costs over the coming year
will support an economic recovery and stabilize inflation close to the 2% target, the minutes of their latest policy meeting suggested. China’s yuan strengthened beyond the key 7-per-dollar level in the onshore market for the first time since 2023, signaling
China’s comfort with further currency appreciation. US$ Index +0.05%, GBPUSD -0.1%, EURUSD -0.1%, USDJPY -0.05%, AUDUSD +0.1%, NZDUSD -0.1%, USDCHF +0.15%, USDCAD +0.1%, USDSEK +0.2%, USDNOK +0.2%.

Spot Bitcoin +0.8%, Spot Ethereum +1.5%. 

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

• Downgrades
• DigitalBridge Group (DBRG) Cut to Sector Perform at RBC; PT $16
• Cut to Hold at TD Cowen; PT $16
• Mereo Biopharma (MREO) ADRs Cut to Hold at Jefferies; PT 50 cents
• Initiations
• Alphabet (GOOGL) Rated New Buy at GF Securities; PT $396.92
• AvePoint (AVPT) Rated New Overweight at Stephens; PT $18
• Chorus Aviation (CHR CN) Rated New Buy at Stifel Canada; PT C$31
• Commvault Systems (CVLT) Rated New Overweight at Stephens; PT $162
• Lindblad Expeditions (LIND) Rated New Buy at Benchmark; PT $18
• Palisade Bio Inc (PALI) Rated New Buy at Clear Street; PT $12
• Rubrik (RBRK) Rated New Overweight at Stephens; PT $105
• Terra Innovatum Global (NKLR) Rated New Buy at HC Wainwright; PT $25
• Varonis Systems (VRNS) Rated New Equal-Weight at Stephens; PT $40
• WeRide (WRD) ADRs Rated New Buy at President Capital Management

Data sources: Bloomberg, Reuters, CQG

David Wienke