Daily Game Plan

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

TODAY’S ECONOMIC DATA:   8:30ET Trump to speak in Davos; 10:00ET Construction Spending, Pending Home Sales; 1:00ET
$13B 20-year bond reopening

Highlights and News:  

• Trump lands in Switzerland for Davos after Air Force One electrical issue
• Witkoff: Meeting Putin on Thursday, Russians Asked to Meet
• Quick tariff ruling in doubt as Supreme Court to take recess
• US to Open Access to Venezuela Oil to More Traders, Refiners
• STARMER: UK WON’T YIELD TO TARIFF THREATS OVER GREENLAND FUTURE
• EU ‘fully prepared’ to hit back over Trump’s Greenland tariffs
• Nagel Tells CNBC Tariff Impact Could Be ‘Gamechanger’ for ECB
• HUANG: `TRILLIONS’ IN INFRASTRUCTURE NEEDS TO BE BUILT OUT

Global stocks trimmed initial declines as sovereign bond markets steadied, though certain gauges of market stress stayed elevated following a sharp selloff in global
bonds. The ‘sell America’ trade was the driving force behind major market moves on Tuesday, as investors looked to reduce exposure to the US. Investors remained cautious today, driven by US threats to acquire Greenland and anticipation of President Trump’s
upcoming speech today at Davos. The US push to take control of Greenland has cast uncertainty over ties with the European Union, heightening the risk of a trade war that could harm economic growth. Trump has doubled down on his rhetoric over Greenland, saying
there was “no going back” on his goal to control the island. European Commission President Ursula von der Leyen stated that the EU stands ready to retaliate firmly against Trump’s tariff threats. The European Union will convene an emergency summit in Brussels
on Thursday to discuss the matter.

EQUITIES: 

US equity futures pulled back again, a day after the three major averages saw their worst day since October, as the “sell America” trade continues. “America First is quietly driving diversification
away from dollar assets, especially among government entities,” JPMorgan analysts wrote in a note. S&P 500 companies are comfortably surpassing earnings estimates, yet investors remain unconvinced, triggering the weakest share-price responses on record amid
growing uncertainty over the 2026 outlook. Even as roughly 81% of reporting firms beat profit expectations, their stocks have lagged the broader index by an average of 1.1 percentage points, the poorest post-earnings performance since at least 2017. Trump
is due to speak at Davos, while the Supreme Court will consider whether Trump can fire the Fed’s Cook. The US Supreme Court will not address the ongoing legal challenges to President Trump’s tariffs before beginning its four-week recess, meaning the contested
tariffs will remain in effect for the time being. Newsflow from Davos remains brisk, as Treasury Secretary Scott Bessent accused Federal Reserve Chair Jerome Powell of “politicizing” the central bank while cautioning European nations against escalating their
military presence in Greenland. This came after reports that France has requested NATO to conduct a military exercise there and expressed readiness to contribute troops. The market rotation persists, as the Russell 2000 has now outperformed the Magnificent
7 by over 10% year-to-date. Netflix’s recent disappointing guidance—featuring cautious 2026 outlooks on margins, higher content spending, and other pressures— will do little to help tech in the short-term. Kraft Heinz is lower in premarket trading after registering
up to 325 million shares held by Berkshire Hathaway for potential sale.

Futures ahead of the bell: E-Mini S&P -0.15%, Nasdaq -0.25%, Russell 2000 +0.05%, DJI -0.25%.

In pre-market trading, Abercrombie & Fitch Co. shares (ANF) rise 3.1% after Citi analyst Paul Lejuez raised his recommendation on the apparel retailer to buy from neutral.
Ally Financial shares (ALLY) fall 2.1% after its full-year net interest margin fell below earlier guidance. Albemarle Corp. shares (ALB) rise 2.6% as Truist Securities raised its recommendation to buy from hold on increasing demand. Amgen shares (AMGN) edge
lower by 0.9% after Bernstein downgraded the stock to market perform from outperform. Apellis Pharmaceuticals shares (APLS) are up 3.7% after BofA Global Research upgraded the drugmaker to buy from neutral. Biohaven shares (BHVN) gain 4.5% after RBC Capital
Markets upgraded the drugmaker to outperform from sector perform. Halliburton shares (HAL) rise 2.7% after the fracking company reported fourth-quarter adjusted earnings per share that beat. Johnson & Johnson shares (JNJ) drop 3.3% after the health-care company
reported mixed drug sales for the fourth quarter. Kraft Heinz shares (KHC) fall 6.2% after the packaged food company registered more than 325 million common shares held by Berkshire Hathaway, its largest shareholder, for potential sale. Netflix (NFLX) falls
7.8% after the streaming giant forecast first-quarter earnings below the average analyst estimate. Oklo Inc. shares (OKLO) rise 4% after BofA Global Research raised its recommendation to buy from neutral on the company’s power agreement with Meta Platforms
showing demand. Progress Software shares (PRGS) are up 7.7% after the company’s 2026 revenue forecast exceeded Wall Street expectations. United Airlines shares (UAL) rose 2.6% after the carrier reported adjusted earnings per share for the fourth quarter that
topped Wall Street’s expectations.

European gauges drifted lower throughout the morning with markets tentative ahead of President Trump’s Davos appearance. The Stoxx 600 is near the lows of the day,
weighed down by financials, defense and tech while miners outperform. Rio Tinto rallies over 5% in London, to its highest intraday level since May 2021 after copper and iron ore production topped analyst estimates. Burberry shares jumped as much as 6.6%, after
a third-quarter sales update that was perceived positively by analysts. Barry Callebaut shares surged as much as 7.9% after the Swiss bulk chocolate maker reported sales that beat estimates and replaced its CEO. JD Wetherspoon shares fell as much as 8.5% as
the pub chain tempered profit expectations for this year. Danone fell as much as 12% before trimming some of the decline after an announcement by the Singapore Food Agency recalling additional infant formula products. British inflation rose by more than expected
in December, pushed higher by air fares and tobacco prices. Stoxx 600 -0.7%, DAX -1.3%, CAC -0.4%, FTSE 100 -0.15%. Banks -1.7%, Financial Services -1.5%, Technology -1.3%. Basic Resources +3%, Chemicals +0.5%.

Shares in Asia were mostly lower, with investors seeking safe havens after Trump threatened fresh tariffs on countries resisting the transfer of Greenland to the United
States. Most of the region tracked Wall Street’s overnight weakness but saw some resilience in China/Hong Kong and Korea, while Japan and Taiwan lagged. Hang Seng stocks rose with gains in tech and amid some rebound in risk appetite for China-related plays.
Shares in China inched higher, snapping recent losses as investors focused on potential domestic stimulus. Driving the outperformance of the world’s second-largest stock market was a fresh pledge by Chinese policymakers to accelerate efforts to develop homegrown
artificial intelligence and aim for technological breakthroughs. Loongson Technology Corp. jumped 20%, while Hygon Information Technology Co. advanced 13%, both to record highs.  Markets remain on edge ahead of Trump’s Davos address. Taiwan -1.6%, Indonesia
-1.4%, Topix -1%, Vietnam -0.4%, Singapore -0.4%, ASX 200 -0.4%, Sensex -0.3%. Thailand +1.6%, Hang Seng Tech +1.1%, Kospi +0.5%, Hang Seng Index +0.4%, CSI 300 +0.1%.

FIXED INCOME: 
 

Treasuries are narrowly mixed in early US trading after Tuesday’s selloff, with the yield curve continuing to steepen. A sharp rebound in long-dated Japanese bonds
during Asia session provided support.  Focal points of Wednesday’s US session include a 20-year bond auction and US President Trump speech in Davos at 2:30pm local time (8:30am in New York).  10-year near 4.28% is about 1bp lower and 2s10s is +1.5bps.

METALS: 

Gold and platinum print record highs but silver stays muted. Spot gold prices extended its record run to breach $4,880 per ounce level on safe-haven flows driven
by escalating friction between the United States and NATO over Greenland. Trump is likely to use the World Economic Forum to escalate his push for acquiring Greenland despite European protests. Danish Prime Minister Mette Frederiksen said she would not yield
to Trump’s demands and abandon Greenland. Meanwhile, investors are also ⁠looking out
for the Supreme Court’s verdict on the legality of Trump’s bid to remove Federal Reserve Governor Lisa Cook, adding to concerns over Fed independence. Spot gold +2.2%, Silver -0.1%, Copper futures +0.8%.

ENERGY:   

Oil prices held small gains as traders awaited President Trump’s upcoming address at Davos, with transatlantic tensions continuing to escalate. The International
Energy Agency trimmed its expectations for a supply glut and increased its forecast for global oil demand growth in 2026. The anticipated surplus, however, still leaves oil markets facing a significant excess, which has cushioned prices against uncertainties
in Iran, Russia, Kazakhstan and Venezuela, the agency added. Venezuelan exports are also in focus, with the US government planning to allow more trading companies beyond Vitol Group and Trafigura Group to purchase crude from the South American nation. The
last tankers carrying sanctioned Venezuelan crude to Asia are set to arrive in the coming days, effectively drawing to a close China’s easy access to a source of cheap oil that has helped sustain its refining sector. Elsewhere, the main pipeline system for
Kazakhstan’s oil exports is close to restoring another offshore mooring in the Black Sea after operating at reduced capacity since November. Indian state-owned refiner Bharat Petroleum Corp. (BPCL) is pursuing long-term crude supply agreements from Middle
Eastern sources, marking the latest indication that India—the world’s third-largest oil importer—is gradually returning to its traditional suppliers while reducing its dependence on discounted Russian cargoes. Turkey’s state energy company is in talks with
Chevron Corp to jointly explore for oil and gas. Natural gas futures surged as much as 27% as weather forecasts call for a deep freeze to grip much of the country during the weeks ahead. WTI +0.4%, Brent +0.6%, US Nat Gas +22%, RBOB +1.0%. 

CURRENCIES: 

In currency markets, the dollar is lower after suffering its biggest fall in over a month on Tuesday. The kiwi and krone are top of the leaderboard, while the franc
and pound weaken. Sterling saw little immediate reaction to a larger-than-expected uptick in headline inflation, with the increase expected to be temporary. Investors held steady on their bets on the Bank of England cutting interest rates later this year with
services price inflation, which is closely watched by the central bank, edging up in line with analysts’ forecasts. The yen is a touch stronger ahead of a Bank of Japan policy meeting on Friday. No rate hike is expected this time though policymakers could
signal an increase may be coming as soon as April. Yuan slips after the PBOC keeps daily fix weaker than 7/USD despite recent dollar weakness. US$ Index -0.2%, GBPUSD -0.2%, EURUSD +0.05%, USDJPY -0.15%, AUDUSD +0.4%, NZDUSD +0.45%, USDCHF +0.05%, USDCAD -0.2%,
USDSEK -0.4%, USDNOK -0.65%.

Spot Bitcoin -0.7%, Spot Ethereum -2.0%.

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
• Albemarle (ALB) Raised to Buy at Truist Secs; PT $205
• Alibaba (BABA) ADRs Raised to Buy at Arete; PT $190
• Alliant Energy (LNT) Raised to Equal-Weight at Barclays
• Apellis Pharma (APLS) Raised to Buy at BofA; PT $28
• ARM Holdings (ARM) ADRs Raised to Positive at Susquehanna; PT $150
• Auna (AUNA) Raised to Buy at HSBC; PT $6.90
• Biohaven (BHVN) Raised to Outperform at RBC; PT $22
• Brinker (EAT) Raised to Outperform at Raymond James; PT $195
• Carter’s (CRI) Raised to Buy at Citi
• Intl Seaways (INSW) Raised to Buy at Pareto Securities; PT $64
• Invesco (IVZ) Raised to Outperform at RBC; PT $35
• Oklo (OKLO) Raised to Buy at BofA; PT $127
• Sally Beauty (SBH) Raised to Outperform at Raymond James; PT $19
• Watts Water (WTS) Raised to Overweight at KeyBanc; PT $340
• Downgrades
• ABM Industries (ABM) Cut to Hold at Truist Secs
• Afya (AFYA) Cut to Neutral at Banco BTG Pactual; PT $17
• Amgen (AMGN) Cut to Market Perform at Bernstein; PT $335
• APA Corp (APA) Cut to Underweight at Barclays
• Bombardier (BBD/B CN) Cut to Sector Perform at Scotiabank; PT C$295
• Cut to Neutral at CIBC; PT C$290
• Cheesecake Factory (CAKE) Cut to Market Perform at Raymond James
• CNX Resources (CNX) Cut to Underweight at Barclays
• Darden (DRI) Cut to Market Perform at Raymond James
• Dollar Tree (DLTR) Cut to Underperform at BNP Paribas
• FedEx (FDX) Cut to Neutral at Rothschild & Co Redburn; PT $271
• Kraft Heinz (KHC) Cut to Underperform at BNP Paribas; PT $22
• Lithium Royalty (LIRC CN) Cut to Neutral at Citi
• Mercer International (MERC) Cut to Sell at TD Cowen; PT $2.25
• Netflix (NFLX) Cut to Neutral at Fubon; PT $98
• RAPT Therapeutics (RAPT) Cut to Market Perform at Leerink; PT $58
• Southern Copper (SCCO) Cut to Sell at UBS; PT $148
• WillScot Holdings (WSC) Cut to Neutral at Baird; PT $23
• WM (WM) Cut to Sector Perform at Scotiabank; PT $250
• Initiations
• Alumis (ALMS) Rated New Buy at Chardan Capital Markets; PT $37
• Ametek (AME) Reinstated Buy at Deutsche Bank; PT $271
• Applied Digital (APLD) Rated New Buy at Texas Capital; PT $42
• Century Communities (CCS) Rated New Market Outperform at Citizens
• Credo Technology (CRDO) Rated New Neutral at Rosenblatt Securities Inc
• Crescent Biopharma (CBIO) Rated New Buy at Guggenheim; PT $35
• EDP Renovaveis (EDPR PL) ADRs Rated New Buy at Berenberg; PT $35
• EDP SA (EDP PL) ADRs Rated New Buy at Berenberg; PT $54.83
• Endesa (ELE SM) ADRs Rated New Hold at Berenberg; PT $18.08
• Enel (ENEL IM) ADRs Rated New Hold at Berenberg; PT $11.32
• Engie (ENGI FP) ADRs Rated New Hold at Berenberg; PT $28.58
• Fermi (FRMI) Rated New Buy at Texas Capital; PT $23
• Fortum (FORTUM FH) ADRs Rated New Hold at Berenberg; PT $4.20
• Grupo Financiero Galicia (GGAL AR) ADRs Rated New Hold at CGI Capital
• National Energy Services (NESR) Rated New Buy at UBS; PT $25
• Occidental (OXY) Reinstated Equal-Weight at Barclays
• Omai Gold Mines (OMG CN) Reinstated Outperform at National Bank; PT C$3
• Pinnacle Financial Partners (PNFP) Rated New Buy at Deutsche Bank
• SSE (SSE LN) ADRs Rated New Buy at Berenberg; PT $37.60
• Verbund (VER AV) ADRs Rated New Hold at Berenberg; PT $15.17

Data sources: Bloomberg, Reuters, CQG

David Wienke