Daily Game Plan

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

DATA/HEADLINES   10:30ET Dallas Fed Manufacturing Activity: 11:30ET 2 year note auction; 12:30ET Fed’s Barr speaks;
1:00ET 5 year note auction

TODAY’S HIGHLIGHTS:  

• A TV news crew was robbed at gunpoint in Chicago
  this morning while doing a story about armed robberies in Chicago; 30 people were robbed or carjacked since Sunday evening
• Tropical Storm Idalia expected to hit Florida as hurricane
  
• US will release a list of 10 drugs this week that Medicare will be able to negotiate prices for
  

World shares gained after China announced measures to support its ailing markets, but Western markets remained cautious ahead of European and US economic data expected
later in the week. Beijing on Sunday announced a series of steps to shore up investor confidence, including lowering a stamp duty on stock trades for the first time since 2008 and pledging to slow the pace of initial public offerings. China’s securities regulator
also approved the launch of 37 retail funds to invest in stocks. All of which is happening as US Commerce Secretary Gina Raimondo started three days of talks with Beijing aimed at boosting business ties between the world’s two largest economies.                                   

EQUITIES: 

US equity futures ticked higher as the market looked set to build on gains made Friday on Federal Reserve Chair Jerome Powell’s cautious comments on future interest rate moves. Powell
did not offer any firm guidance on policy in his Jackson Hole speech and said that the Fed would “proceed carefully” based on incoming economic data, emphasizing the commitment to get inflation back to the 2% target. His speech indicated that policy is increasingly
shifting toward managing risks amid substantial uncertainty over the impact of previous hikes. So far in the month of August the S&P 500 has not seen a single back-to-back gain, illustrating the lack of investor conviction.                          

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.4%, Russell 2000 +0.3%, Dow +0.3%. E-mini S&P is fluctuating between its
50 day mvg avg
and
100dma.
 

In premarket trading, 3M Co. (MMM) gained 5% after Bloomberg News reported it tentatively agreed to pay more than $5.5B to resolve lawsuits claiming it sold the US military defective
combat earplugs.  Horizon Therapeutics (HZNP) is up 5% after the Federal Trade Commission suspended its challenge of Amgen’s $27.8 billion acquisition of Horizon, giving the FTC time to weigh a settlement that would let the deal close with conditions. Xpeng
Inc.’s (XPEV) shares advanced 5% after it agreed to buy Didi Global’s smart-car development arm in a deal that both eliminates a potential competitor in the crowded electric-vehicle market.  Chinese stocks listed in the US will be closely watched after Chinese
authorities asked some mutual funds to avoid selling equities on a net basis. Danaher Corporation said it will acquire Abcam plc, a leading global supplier of protein consumables, for $24 per share in cash. CrowdStrike (CRWD) slips 3% as Morgan Stanley downgrades
the software company to equal-weight from overweight ahead of 2Q earnings. Hawaiian Electric Industries Inc. (HE) surges as much as 43% after subsidiary Hawaiian Electric Co. released a statement on the fires, saying its power lines to Lahaina were not energized
when an afternoon fire broke out. Novocure (NVCR) shares sink 41% after the company says a late-stage trial of its ovarian cancer drug did not meet its primary endpoint of overall survival at the final analysis. RPT Realty (RPT) gains 12% as Kimco Realty said
it will buy the  firm
in an all-stock transaction.

European gauges gained in thin trading with UK markets closed for a local holiday.  Banks and technology stocks led the gains in Europe as all industry sub-indexes advanced. Trading could
also be more volatile as, starting Monday, Deutsche Boerse AG’s Eurex will list Euro Stoxx 50 derivatives that expire every weekday, following US peers who introduced the now-booming contracts tied to the S&P 500 last year. Every trading session, investors
in Europe will be able to buy and sell derivatives expiring the same day.  Stoxx 600 +0.6%, DAX +0.6%, CAC +0.8%. Banks +1.2%, Tech +1.2%, Construction +0.9%, Telecom +0.8%.           

Asian equities rose, with Chinese markets leading the way on investor enthusiasm for new support measures from the government. The MSCI Asia Pacific Index gained 1%, after paring earlier
gains of as much as 1.7%. China’s key mainland stock index and a measure of Hong Kong-listed tech stocks each soared more than 5% in early trading, but they pared gains in a blow to Beijing’s efforts. Investors seemingly were disappointed that the new measures
were not accompanied by stronger stimulus.  Data released over the weekend showed profits at China’s industrial firms fell for the seventh straight month in July. Troubles in the property sector were highlighted when China Evergrande shares resumed trading
after a 17-month halt, with a plunge of 80%. Elsewhere, benchmarks in Japan jumped more than 1% after the yen weakened.  This is the busiest week of the current earnings season, with more than 360 members of the MSCI Asia Pacific Index due to announce results.
Nikkei 225 +1.7%, Hang Seng Tech +1.7%, Vietnam +1.5%, CSI 300 +1.2%, Hang Seng Index +1%, Kospi +1%, ASX 200 +0.6%, Sensex +0.2%. 

FIXED INCOME: 
 

Treasuries are mixed with the yield curve flatter and 2-year yields near YTD high ahead of compressed auction schedule that includes both 2- and 5-year note sales
today. 10-year yields little changed at ~4.23% with 2s10s and 5s30s spreads flatter by 2bp-3bp on the day. 2-year yield ~5.1%.  The key takeaway from Fed Chair Powell’s speech on Friday was that monetary policy will stay “restrictive” until inflation is moving
more firmly toward 2%. The onus is on the data to show a cool-down or risk another rate hike. Fed fund futures now imply a 55% chance of a hike by year end, compared with 32% a week ago. While Fed officials differ over whether further tightening is needed,
they’re voicing similar sentiment on the need to at least keep rates elevated.

METALS: 
           

Gold steadied following last week’s advance as investors prepare for crucial economic indicators such as Nonfarm Payrolls and ISM Manufacturing PMI for August, which
will be released later this week.  Spot gold is flat, silver -0.1%.               

ENERGY:  

Oil ticked higher after China took steps to bolster its flagging economy, though investors remained worried about the pace of growth as well as further US interest
rate hikes that could dampen demand. The market is also keeping an eye on Tropical Storm Idalia and any risk it poses to oil and gas output in the US Gulf. Idalia’s top winds reached 40 miles per hour Sunday but are forecast to peak at 100 mph just before
it comes ashore, the US National Hurricane Center said. Florida Governor Ron DeSantis has urged residents to prepare and declared an emergency in 33 counties mostly along the state’s Gulf coast. WTI +0.05%, Brent -0.05%, US Nat Gas +3.9%, RBOB -1.2%.            

CURRENCIES:   

The US Dollar Index is now little changed on the day, recovering from early pressure spurred by investor appetite for risk-sensitive currencies after China announced
support for its equities market. The yuan gave up its morning gain to weaken versus the dollar. AUD/USD climbed as much as 0.6% following sharps gains in Chinese stocks, before paring most of the rally. US$ Index +0.03%, GBPUSD +0.1%, EURUSD +0.1%, USDJPY
+0.05%, AUDUSD +0.2%, USDSEK -0.3%. 

Bitcoin -0.4%, 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:

• Akebia Therapeutics (AKBA) raised to buy at HC Wainwright; PT $3.75
• Apartment Income REIT (AIRC) raised to buy at Truist Secs; PT $44
• Appfolio (APPF) raised to outperform at William Blair
• Church & Dwight (CHD) raised to buy at Truist Secs; PT $105
• Forward Air (FWRD) raised to peerperform at Wolfe
• Macom (MTSI) raised to buy at Benchmark; PT $92
• Mister Car Wash (MCW) raised to overweight at Piper Sandler; PT $12
• Nvidia (NVDA) raised to buy at Phillip Secs; PT $645
• UDR (UDR) raised to buy at Truist Secs; PT $49
• UGI (UGI) raised to overweight at Wells Fargo; PT $27
• Zimmer Biomet (ZBH) raised to buy at BTIG; PT $139

DOWNGRADES:

• Atmos Energy (ATO) cut to equal-weight at Wells Fargo; PT $128
• Century Therapeutics (IPSC) cut to neutral at JPMorgan; PT $5
• CrowdStrike (CRWD) cut to equal-weight at Morgan Stanley; PT $167
• Denbury Inc (DEN) cut to hold at Jefferies; PT $91
• Energizer Holdings (ENR) cut to hold at Truist Secs; PT $35
• Essex Property (ESS) cut to hold at Truist Secs; PT $266
• Lyell Immunopharma (LYEL) cut to neutral at JPMorgan; PT $5
• Timber Pharmaceuticals I (TMBR) cut to neutral at HC Wainwright
• Upwork (UPWK) cut to neutral at BTIG

INITIATIONS:

• Alliance Entertainment Holding (AENT) rated new buy at ThinkEquity
• BHP ADRs (BHP AU) rated new outperform at Haitong Intl; PT $72.75
• Cricut (CRCT) rated new neutral at Citi; PT $10.50
• Hanesbrands (HBI) rated new hold at Baptista Research; PT $5.40
• LLYVA US (LLYVA) rated new buy at Seaport Global Securities; PT $56
• Meta Platforms (META) rated new outperform at CICC; PT $332
• NextGen Healthcare (NXGN) rated new overweight at Cantor; PT $21
• Nvidia (NVDA) rated new buy at Sealand Securities
• Pagaya Technologies (PGY) rated new market outperform at JMP; PT $2.75
• Reneo Pharma (RPHM) rated new buy at HC Wainwright; PT $30
• Silo Pharma (SILO) rated new buy at Laidlaw; PT $10
• Surf Air Mobility (SRFM) rated new buy at Canaccord; PT $3
• Tetra Tech (TTEK) rated new outperform at RBC; PT $181
• Unity Software (U) rated new outperform at CICC; PT $49
• Workiva (WK) rated new outperform at Wolfe; PT $120

Data sources: Bloomberg, Reuters, CQG