Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:00ET Fed’s Miran Speaks, 8:30ET Nonfarm Productivity, Unit Labor Costs, Initial Jobless
Claims, Trade Balance, Exports, Imports; 10:00ET Fed’s Miran Speaks, Wholesale Inventories, Wholesale Trade Sales; 11:00ET NY Fed 1-Yr Inflation Expectations; 3:00ET Consumer Credit

Highlights and News:  

• Trump: US Oversight of Venezuela May Last Years
• Gold, Silver Fall as Traders Brace for Wider Index Rebalancing
• China to Approve Nvidia H200 Purchases for Commercial Use as Soon as This Quarter
• China’s refiners, cut off from Venezuelan crude, are turning to Canada as a pricier alternative source
• Supreme Court decision on Trump’s use of emergency tariff powers could come as early as Friday
• Trump threatened to cut off Pentagon business with RTX and its defense unit Raytheon
• China hacked email systems of US congressional committee staffers, FT
• US officials are said to be working on options for business deals in Greenland
• AbbVie says it is not in talks to buy the cancer-drug developer Revolution Medicines

Global stocks edge lower in cautious trading as investors digest geopolitical events while awaiting upcoming economic data. Sentiment remains constructive after a
strong start to 2026, but with some profit-taking. A forthcoming US Supreme Court decision on President Trump’s use of emergency tariff powers could come as early as tomorrow. Striking down the tariffs could impact government revenue, pushing Treasury yields
higher and unleashing new waves of volatility across equity markets, analysts said. China plans to approve some imports of Nvidia’s H200 chips as soon as this quarter, allowing local companies to buy the component from Nvidia for select commercial use. The
chip will be barred from the military, sensitive government agencies, critical infrastructure and state-owned enterprises due to security concerns. Goldman Sachs strategists remain modestly pro-risk for 2026 on prospects for “sturdy” global growth and further
declines in inflation. Companies around the world are issuing convertible bonds at the fastest pace in 24 years, as the development of AI spurs a hunt for cheaper financing.

EQUITIES: 

US equity futures are drifting lower as the early-year optimism fades, giving way to growing concerns over the economy and geopolitical tensions. Strategists are seeking fresh drivers
to sustain the bull market in US stocks, as concerns mount over a potential slowdown in the artificial intelligence rally. Investors are also grappling with President Trump’s latest directives on defense spending and corporate landlords, as a flurry of headlines
adds to an unusually heightened sense of unpredictability. Defense stocks are rising in premarket trading after President Trump called for a $500 billion increase in annual defense spending. The move follows his directive requiring major government defense
contractors to halt stock buybacks and dividends until they ramp up investments in factories and research. Corporate landlords are also drawing attention after Trump’s Wednesday pledge to block institutional investors from buying more homes. Tariffs are making
headlines again, as the US Supreme Court is set to rule on the validity of most existing duties as early as tomorrow.

Futures ahead of the data/bell: E-Mini S&P -0.1%, Nasdaq -0.15%, Russell 2000 -0.3%, DJI -0.3%.

In pre-market trading, Defense stocks advance, with Northrop Grumman (NOC) up 8% and Lockheed Martin (LMT) rising 7%, after President Trump said he wants to increase
the country’s military budget by about 50% to $1.5 trillion in 2027. Alcoa (AA) falls 3% after JPMorgan downgrades the stock to underweight. Globus Medical (GMED) gains 7% after the medical device maker issued a profit forecast for 2026 that beat expectations.
Helen of Troy (HELE) drops 5% after the consumer products company cut its adjusted earnings per share guidance for the full year. Revolution Medicines (RVMD) falls 6% after AbbVie says it is not in talks to buy the cancer-drug developer. Soho House (SHCO)
declines 11% after the members’ club operator said it faces a funding gap tied to the company’s pending sale.

European gauges are lower and on track for a second day of declines as investors weigh weak US economic signals and geopolitical concerns. German factory orders unexpectedly
rose for a third month in November. Demand jumped 5.6% on a monthly basis, the biggest gain in a year. Defense and banks outperform, while UK food retailers underperform following disappointing Christmas trading updates. European defense stocks jumped to a
record high, marking their fifth straight day of gains that has already seen them surge 13% this year. Among individual names, BAE Systems gains as much as 7%, leading a broad rally in defense shares after President Trump said on Wednesday he will request
an increase in the US military budget. Soitec shares jump as much as 11% before paring gains after the semiconductor wafer firm named Infineon executive Laurent Rémont as its CEO starting in April. Tesco slides ~6% after Britain’s largest supermarket chain
posted softer-than-expected like-for-like growth in its core market over the Christmas period. Associated British Foods shares drop as much as 12% to a nine-month low after the group warned its profit will be lower than expected this fiscal year. Stoxx 600
-0.5%, DAX -0.4%, CAC -0.3%, FTSE 100 -0.4%. Autos -1.9%, Retail -1.5%, Basic Resources -1.4%. Defense +1%, Banks +0.4%. 

Shares in Asia fell, with Hong Kong’s weakness persisting and Japanese shares tumbling amid escalating tensions between Japan and China. China said its latest export
controls are aimed at the military and won’t affect civilian trade. The MSCI Asia Pacific Index dropped 0.8%, with Tencent, SoftBank and Samsung among the biggest drags. Stocks in Japan, Hong Kong and mainland China led the losses, while those in Philippines
outperformed. The mainland market was dragged by a retreat in local brokerage shares. Chinese computing stocks rose after the nation unveiled plans to boost computing power supply for industrial use. Chinese medical equipment producers gained, with sentiment
toward the sector boosted by a strong trading debut for surgical robot maker Shenzhen Edge Medical in Hong Kong. Samsung’s profit beat estimates, more than tripling to a record on higher memory chip prices. Thailand -2.1%, Nikkei 225 -1.6%, Hang Seng Index
-1.2%, Sensex -0.9%, CSI 300 -0.8%, Vietnam -0.3%, Taiwan -0.25%. Philippines +0.45%, ASX 200 +0.3%, Kospi +0.03%.

FIXED INCOME: 
 

Treasuries hold small curve-steepening losses amid deeper selloff in bunds following European government bond supply surge including syndicated sales by Italy and
Portugal and conventional offerings by France and Spain. US yields are cheaper by 0.5bp to 1.5bp with curve spreads slightly wider; 10-year near 4.16% is 1.5bp cheaper on the day. Investors are awaiting tomorrow’s US non-farm payrolls data for more clues on
monetary policy, with markets pricing in two interest rate cuts by the Federal Reserve this year. Focal points of US session include jobless claims data and corporate new-issue slate adding to already historic weekly volume.  At 11am the US Treasury will announce
refunding supply of 3yr, 10yr, and 30yr supply next week. The Fed’s Michelle Bowman proposed changes to bank rating systems and regulatory thresholds, aiming to focus on material financial risks.

METALS: 

Gold and silver are lower as investors prepared for anticipated selling pressure in futures markets linked to the annual commodity index rebalancing.  Over the next
five days, COMEX futures could see selling in the region of $6 to $7 billion in each metal,” according to head of commodity strategy at Saxo Bank. Silver is particularly vulnerable to a sharp selloff, with Citigroup estimating about $6.8 billion in silver
futures could be sold to meet the rebalancing requirements, equivalent to about 12% of open interest on Comex. Spot gold slipped below $4,430 an ounce, after losing nearly 1% in the previous session. The copper squeeze will intensify amid the race for AI and
surging defense spending while producers struggle to expand, S&P Global said. It sees global demand rising 50% to 42 million metric tons by 2040.  Spot gold -0.7%, Silver -4.1%, Copper futures -0.1%.

ENERGY:   

Oil prices are higher as traders digested more measures from the US to exert control over Venezuela, including a plan to indefinitely manage future crude sales. WTI
trades near $57a barrel after losing 3% over the previous two sessions. Energy Secretary Chris Wright said on Wednesday that the United States will sell Venezuelan oil “indefinitely” after completing sales of the crude currently accumulating in storage there.
The Energy Department said oil was already being marketed. The prospect of higher Venezuelan exports has already sent Canadian crude prices plunging, as such shipments would add barrels to a market already grappling with ample supply. China’s refiners, all
but cut off from Venezuelan crude, are turning to Canada as a pricier alternative source. Citgo Petroleum, the US refiner indirectly owned by Venezuela, is considering resuming purchases for the first time since sanctions cut off its supply in 2019, while
Trafigura Group has also expressed interest. Meanwhile, US forces seized two more sanctioned oil tankers as part of its energy quarantine of Venezuela. WTI +1.5%, Brent +1.6%, US Nat Gas -2.1%, RBOB +2.1%.

CURRENCIES: 

In currency markets, the dollar hovered near a one-month high as investors assessed mixed economic data ahead of Friday’s closely watched nonfarm payrolls report.
While various US labor market metrics are due today, the event investors are most anticipating is the December non-farm payrolls report on Friday, as well as a possible ruling on President Donald Trump’s global tariffs. Aussie$ underperforms. Australians have
probably seen the final rate cut of the current easing cycle, RBA Deputy Governor Andrew Hauser told the ABC, adding that inflation above 3% is “too high.”  US$ Index +0.1%, GBPUSD -0.15%, EURUSD is flat, USDJPY -0.05%, AUDUSD -0.4%, NZDUSD -0.4%, USDCHF -0.05%,
USDCAD is flat, USDSEK +0.4%, USDNOK +0.2%.

Spot Bitcoin -1.25%, Spot Ethereum -1.7%. 

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
• Air Products (APD) Raised to Neutral at BofA
• Airbnb (ABNB) Raised to Neutral at Cantor; PT $141
• Alphabet (GOOGL) Raised to Overweight at Cantor; PT $370
• Aptiv (APTV) Raised to Overweight at Piper Sandler; PT $103
• Chubb (CB) Raised to Buy at Goldman; PT $351
• Coinbase (COIN) Raised to Buy at BofA
• Credit Acceptance (CACC) Raised to Hold at TD Cowen; PT $460
• Dollar General (DG) Raised to Buy at Deutsche Bank; PT $170
• Elevance (ELV) Raised to Outperform at Wolfe
• Enhabit (EHAB) Raised to Buy at UBS; PT $12
• Figma (FIG) Raised to Overweight at Wells Fargo; PT $52
• Five Below (FIVE) Raised to Buy at Deutsche Bank; PT $242
• Ford (F) Raised to Overweight at Piper Sandler; PT $16
• Fortrea Holdings (FTRE) Raised to Buy at Truist Secs; PT $22
• Gap (GAP) Raised to Buy at UBS; PT $41
• Generac (GNRC) Raised to Buy at Citi; PT $207
• General Motors (GM) Raised to Overweight at Piper Sandler; PT $98
• HF Sinclair (DINO) Raised to Overweight at Piper Sandler; PT $68
• Jack Henry (JKHY) Raised to Outperform at Wolfe
• JB Hunt (JBHT) Raised to Positive at Susquehanna; PT $240
• Kroger (KR) Raised to Buy at Deutsche Bank; PT $75
• Merck & Co (MRK) Raised to Outperform at Wolfe; PT $135
• Nurix (NRIX) Raised to Overweight at Morgan Stanley; PT $36
• Omnicell (OMCL) Raised to Overweight at KeyBanc; PT $60
• PBF Energy (PBF) Raised to Overweight at Piper Sandler; PT $40
• Progressive (PGR) Raised to Overweight at Barclays; PT $265
• Puig (PUIG SM) ADRs Raised to Outperform at BNP Paribas; PT $10.50
• Roku (ROKU) Raised to Outperform at Evercore ISI; PT $145
• Shopify (SHOP CN) Raised to Sector Outperform at Scotiabank; PT C$276.62
• Stellantis (STLA) Raised to Overweight at Piper Sandler; PT $15
• Steven Madden (SHOO) Raised to Buy at Needham
• Terreno Realty (TRNO) Raised to Outperform at Baird; PT $64
• Tyson (TSN) Raised to Outperform at BMO; PT $67
• Westinghouse Air Brake (WAB) Raised to Outperform at Wolfe
• Yum (YUM) Raised to Buy at Gordon Haskett
• Downgrades
• AbbVie (ABBV) Cut to Peerperform at Wolfe
• Absci (ABSI) Cut to Equal-Weight at Morgan Stanley; PT $4.32
• Alcoa (AA) Cut to Underweight at JPMorgan; PT $50
• American Homes (AMH) Cut to Neutral at Mizuho Securities; PT $32
• Arcus Biosciences (RCUS) Cut to Equal-Weight at Morgan Stanley; PT $20
• Axsome Therapeutics (AXSM) Cut to Equal-Weight at Morgan Stanley
• Ball (BALL) Cut to Equal-Weight at Morgan Stanley; PT $63
• Bath & Body Works (BBWI) Cut to Hold at Deutsche Bank; PT $21
• BorgWarner (BWA) Cut to Neutral at Piper Sandler
• Burlington Stores (BURL) Cut to Hold at Deutsche Bank; PT $318
• Capri Holdings (CPRI) Cut to Neutral at Goldman; PT $27
• Chipotle (CMG) Cut to Hold at Gordon Haskett
• Clarivate (CLVT) Cut to Neutral at Goldman; PT $3.60
• Clearwater Analytics (CWAN) Cut to Equal-Weight at Wells Fargo
• Contineum Therapeutics (CTNM) Cut to Equal-Weight at Morgan Stanley
• Darden (DRI) Cut to Hold at Truist Secs
• Dollar Tree (DLTR) Cut to Hold at Deutsche Bank; PT $126
• Exelixis (EXEL) Cut to Equal-Weight at Morgan Stanley; PT $48
• Extra Space (EXR) Cut to Sector Perform at Scotiabank; PT $145
• Icon (ICLR) Cut to Hold at Truist Secs; PT $222
• Intuit (INTU) Cut to Equal-Weight at Wells Fargo; PT $700
• Invitation Homes (INVH) Cut to Neutral at Mizuho Securities; PT $27
• IO Biotech (IOBT) Cut to Underweight at Morgan Stanley; PT 36 cents
• JB Hunt (JBHT) Cut to Neutral at Citi; PT $221
• Leidos (LDOS) Cut to Hold at Stifel; PT $220
• Marqeta (MQ) Cut to Neutral at Mizuho Securities; PT $4.50
• Cut to Peerperform at Wolfe
• Neurocrine Bio (NBIX) Cut to Equal-Weight at Morgan Stanley; PT $175
• Nike (NKE) Cut to Hold at Needham
• OneStream (OS) Cut to Market Perform at Raymond James
• Potlatch (PCH) Cut to Market Perform at BMO; PT $45
• Prologis (PLD) Cut to Neutral at Baird; PT $130
• Ryder (R) Cut to Peerperform at Wolfe
• Saia (SAIA) Cut to Peerperform at Wolfe
• Sigma Lithium Corp (SGML CN) Cut to Underperform at BofA
• Sprouts Farmers (SFM) Cut to Hold at Deutsche Bank; PT $88
• Sunrise Realty Trust (SUNS) Cut to Market Perform at KBW; PT $9.50
• Toast (TOST) Cut to Peerperform at Wolfe
• Travelers (TRV) Cut to Neutral at Goldman; PT $304
• Unilever (ULVR LN) ADRs Cut to Neutral at BNP Paribas; PT $71
• UPS (UPS) Cut to Peerperform at Wolfe
• Vale (VALE3 BZ) ADRs Cut to Sector Perform at Scotiabank; PT $15
• Ventyx Bio (VTYX) Cut to Neutral at HC Wainwright; PT $14
• Cut to Hold at Canaccord; PT $14
• Cut to Market Perform at LifeSci Capital; PT $14
• Cut to Equal-Weight at Wells Fargo; PT $14
• Vestis (VSTS) Cut to Sell at Goldman; PT $5.30
• Walmart (WMT) Cut to Hold at Deutsche Bank; PT $119
• XPO Inc. (XPO) Cut to Peerperform at Wolfe
• Cut to Neutral at Citi; PT $171
• Initiations
• 5N Plus (VNP CN) Reinstated Buy at Canaccord; PT C$26
• Ally Financial (ALLY) Reinstated Buy at UBS; PT $56
• Bicara Therapeutics (BCAX) Rated New Buy at BTIG; PT $28
• Bread Financial Holdings (BFH) Rated New Buy at UBS; PT $92
• Bunker Hill Mining (BHLL) Rated New Buy at Roth Capital Partners
• Evommune (EVMN) Rated New Strong Buy at Raymond James; PT $40
• Figma (FIG) Reinstated Hold at Stifel; PT $40
• Hudbay Minerals (HBM CN) Rated New Buy at UBS; PT C$34.50
• Intuit (INTU) Rated New Buy at TD Cowen; PT $802
• P2 Gold (PGLD CN) Rated New Corporate at Edison Investment Research
• Polaris (PII) Rated New Buy at Seaport Global Securities; PT $83
• Satellos Bioscience Inc (MSCL CN) Rated New Restricted at Oppenheimer
• Tyler Tech (TYL) Rated New Buy at Stifel; PT $550

Data sources: Bloomberg, Reuters, CQG

David Wienke