Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Nonfarm Productivity, Unit Labor Costs, Initial Jobless Claims, Trade Balance, Exports,
Imports; 10:00ET Factory Orders, Durable Goods Orders, Cap Goods Orders, Wholesale Inventories, Wholesale Trade; 1:00ET 7-Year Note Auction

Highlights and News:  

• Nvidia, Microsoft and Amazon.com are in discussions to invest up to $60 billion in OpenAI 
• Tesla plans to invest $20 billion this year in AI, robotics, and autonomous driving
• Gold, Silver Power a Fresh Commodities Surge
• Trump to make an announcement at 4:30ET
• Mamdani says NYC is facing an unexpected $10B projected budget deficit
• Russia’s Lukoil agreed to sell most of its international assets to Carlyle Group
• India predicted the economy may expand more than 7% this year
• ICE officers in Minnesota were directed to avoid engaging with so-called “agitators”
  

Global stocks edged higher, supported by sustained investor confidence in corporate earnings ahead of Apple’s results, while gold surged to yet another all-time high.
The world’s largest tech firms are increasing spending on AI, with Meta Platforms planning to spend as much as $135 billion this year, and suppliers like Samsung Electronics and SK Hynix responding with increased spending. The increased demand is worsening
a global chip demand-supply imbalance, threatening to disrupt industries, and leading to concerns about a deficit in basic memory. Data centers projected to absorb up to 70% of worldwide memory output in 2026. Meanwhile, oil prices climbed higher driven by
renewed geopolitical tensions between the United States and Iran, fueled by President Trump’s warnings of potential military action if nuclear negotiations falter. Trump said in a social media post on Wednesday, that US ships he ordered to the region were
ready to fulfill their mission “with speed and violence, if necessary.”

EQUITIES: 

US equity futures are modestly higher as investors sentiment remains cautious amid ongoing Fed policy reactions, AI/tech spending themes in earnings, with Apple’s highly anticipated quarterly
results on deck, with the iPhone maker poised for its biggest sales quarter ever.  Big tech is back in focus, with markets rewarding AI-heavy capex when it’s backed with stronger-than-expected core business growth, as seen at Meta, or punishing it when momentum
disappoints, evidenced by Microsoft price action. Meta Platforms saw its shares surge sharply in after-hours trading despite guiding for dramatically higher 2026 capex, thanks to stronger-than-expected revenue beats and improving profitability metrics. Microsoft
faced a sharp sell-off despite beating top- and bottom-line estimates and a hefty 66% year-over-year capex jump. The punishment stemmed from softer-than-hoped Azure cloud revenue growth and lingering concerns over the timeline for meaningful AI payback. Rare
earth and critical minerals stocks plunged in premarket trading after a Reuters report revealed the Trump administration is abandoning earlier plans to guarantee minimum price floors for US critical minerals projects. In non-earnings corporate news, Tesla
plans $20 billion of spending this year to streamline its EV lineup and shift resources toward robotics and AI.  

Futures ahead of the bell: E-Mini S&P +0.2%, Nasdaq +0.05%, Russell 2000 +0.3%, DJI +0.1%

In pre-market trading, revenue outlook that was much stronger than expected. Microsoft (MSFT) falls 6% after the software giant’s report featured an underwhelming read
on growth in its Azure cloud-computing business. Tesla (TSLA) gains 2% after the electric-vehicle giant reported adjusted earnings per share for the fourth quarter that topped the average analyst estimate. Celestica (CLS) falls 5% after the company reported
its fourth-quarter results and gave an outlook. CH Robinson (CHRW) rises 5% after the logistics company reported adjusted earnings per share that beat. International Business Machines (IBM) gains 9% after the IT services company reported fourth-quarter results
that beat. International Paper Co. (IP) rises 5% on plans to break up and spin off its European packaging operations. Las Vegas Sands (LVS) drops 10% after the casino operator’s Macau properties fell short of expectations. LendingClub (LC) falls 7% after posting
fourth quarter results. ServiceNow (NOW) is down 8% after the software company reported its fourth-quarter results. Southwest Airlines (LUV) rises 5% after reporting results that topped analyst estimates. Whirlpool (WHR) falls 11% after the appliance maker’s
ongoing earnings-per-share forecast for the full year trailed estimates.

• IBM US (+8.0%): IBM Posts Revenue That Tops Estimates on Software Gains
• META US (+7.7%): Meta Leans on Improved Ad Business to Fuel Massive AI Spending
• LRCX US (+5.6%), WDC US (+4.6%), SNDK US (+3.1%), GLW US (+2.6%), KLAC US (+2.4%), VRT US (+2.2%), LITE US (+2.1%)
• SCCO US (+4.5%): Southern Copper Sees Lower Output as Silver Rally Grabs Focus
• FCX US (+4.1%): Freeport LNG Mulls Rescheduling Cargoes as Heating Demand Surges
• AMAT US (+3.3%): Applied Materials to Sell Kokusai Electric Shares in Block Trade
• TSLA US (+2.8%): Tesla Plots $20 Billion Spending Spree to Build Musk’s AI Future
• ADBE US (-2.2%): Apple’s Creator Studio Offers Value But Isn’t an Adobe Killer
• MSFT US (-6.0%): Microsoft Drops Amid Slowing Cloud Growth, Record Spending
• SNOW US (-2.3%), TEAM US (-2.4%), DDOG US (-2.4%), CRM US (-2.5%)
• NOW US (-6.1%): ServiceNow Strong Results Overshadowed by AI Disruption Fear
• JOBY US (-9.6%): Joby Aviation Seeks to Raise $1 Billion Via Stock, Convertible
• USAR US (-10.0%), UAMY US (-8.4%), MP US (-5%), LAC US (-3.7%): Rare Earth Stocks Sink on Report US Backing Off Price Floor 

European gauges are mixed to higher as investors parse through a mixed set of corporate earnings, with Germany’s SAP plunging as much as 13% after reporting a disappointing
cloud backlog. French and UK shares are leading while Germany slides. The Stoxx 600 is modestly higher in choppy trading, buoyed by strength in the mining and energy sectors amid surging prices for oil and precious metals, while technology stocks lagged and
weighed on broader gains. 3i Group shares rise as much as 15% in London after the investment firm’s latest results showed a better-than-expected performance for its discount retail business. ABB rises 9.8% after the Swiss firm predicted higher profitability
this year amid a boom in data centers. STMicro shares rise as much as 5% after the chipmaker gave a better-than-expected 1Q revenue forecast. Nokia declines as much as 7.4% after the Finnish communications group reported its latest earnings. Stoxx 600 +0.5%,
DAX -1.1%, CAC +0.6%, FTSE 100 +0.8%. Basic Resources +3.7%, Energy +2.3%, Industrial Goods +1.5%. Technology -1.7%, Media -1%.

Shares in Asia were mixed, with the MSCI Asia Pacific Index up 0.1% after falling as much as 0.7%. SK Hynix and Japan’s Advantest, which surged after its earnings beat,
were the biggest boosts to the gauge, while TSMC, Tokyo Electron and Samsung weighed the most. The Indonesian benchmark plunged for a second day, before trimming most of the losses, as investors continue to fret over MSCI’s warning over the market’s investability.
The index tumbled as much as 10% before closing 1.1% lower. Kosdaq jumps almost 3% in volatile trading that sees several sudden reversals inside a 5% range. Chinese property developers staged a sharp rally, driven by growing optimism that Beijing has effectively
eased or dropped enforcement of the “three red lines” debt restrictions for the property sector. Chinese rare earth stocks gain after Reuters reported that the US is second-guessing plans to guarantee a price floor for critical minerals projects. AstraZeneca
plans to invest $15 billion in China through 2030 to expand cell therapy. CSI Real Estate Index +5%, Kospi +1%, CSI 300 +0.8%, Vietnam +0.7%, Hang Seng Index +0.5%, Singapore +0.4%, Sensex +0.3%, Topix +0.3%. ASX 200 -0.1%, Thailand -0.6%, Taiwan -0.8%, Indonesia
-1.1%, Philippines -2.1%.  

FIXED INCOME: 
 

Treasuries are narrowly mixed with curve steeper, pivoting around little-changed intermediate yields in calm wake of Wednesday’s FOMC decision to pause rate cuts.
European bonds outperform, led by gilts. Treasury’s 7-year note auction at 1pm is last coupon auction until Feb. 10 expected start of new financing quarter. US 10-year yields near flat at 4.25%; 2s10s +1bp; 5s30s +4bps. 

METALS: 

Gold, copper, and silver all surged to fresh all-time highs amid escalating geopolitical risks, particularly renewed US-Iran tensions following President Trump’s
latest warnings. Spot gold climbed toward $5,600 per ounce on heightened safe-haven demand, while silver extended its parabolic year-to-date gains (already exceeding 60%) to new highs around $120 per ounce. Copper joined the party, blasting past previous records
on the London Metal Exchange (reaching over $14,000 per ton) as investors piled into hard assets amid macro uncertainty and dollar softness. Copper is posting its largest single-day gain in over 16 years, powered by a wave of intense speculative buying out
of China. January is becoming one of the busiest months ever for base metals on the SHFE.  Spot gold +2%, Silver +1.6%, Copper futures +8%. 

ENERGY:   

Oil advanced for a third day after Trump warned Iran to make a nuclear deal or face military strikes. Brent crude futures hit $70 a barrel for the first time since
September, while WTI briefly topped $65. Trump’s recent warnings toward Iran have added a geopolitical risk premium to oil prices. Bullish call options have been more expensive than bearish puts for the longest stretch in about 14 months as traders seek to
protect against the risk of a new confrontation between the US and Iran. Iran has said it stands ready for dialogue but warned it would respond with unprecedented force if pushed. A central reason for the US’s hesitation regarding potential preemptive strikes
in the Middle East is China. Chinese military and reconnaissance satellites are now intensively monitoring the region and detecting troop movements in real-time. WTI +2.9%, Brent +2.7%, US Nat Gas +4.1%, RBOB +1.9%. 

CURRENCIES: 

In currency markets, the dollar was on the defensive as investors hedged against US policy uncertainty and the country’s ever-growing debt mountain. Treasury Secretary
Scott Bessent insisted the administration still favored a “strong dollar” policy. The US dollar index hovered near multi-year lows, reflecting ongoing skepticism despite the Federal Reserve’s decision to hold rates steady with a mildly hawkish tone. Australian
dollar rose to a fresh three-year high as commodities extended recent gains. US$ Index -0.2%, GBPUSD +0.05%, EURUSD +0.1%, USDJPY -0.1%, AUDUSD +0.3%, NZDUSD +0.25%, USDCHF -0.2%, USDCAD -0.3%, USDSEK -0.1%, USDNOK -0.7%.

Spot Bitcoin %, Spot Ethereum %. SEC Chair Paul Atkins says now is the “right” time to open the $12.5 trillion 401k retirement market to crypto.

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
• BBB Foods (TBBB) Raised to Overweight at Morgan Stanley; PT $46
• Brown & Brown (BRO) Raised to Market Perform at KBW; PT $73
• Cencora (COR) Raised to Overweight at Morgan Stanley; PT $400
• Fortinet (FTNT) Raised to Buy at Rosenblatt Securities Inc; PT $100
• General Motors (GM) Raised to Buy at DZ Bank; PT $98
• Korro Bio, Inc. (KRRO) Raised to Buy at HC Wainwright; PT $20
• Raised to Buy at Chardan Capital Markets; PT $15
• Raised to Overweight at Piper Sandler; PT $30
• Lam Research (LRCX) Raised to Buy at Summit Insights
• Littelfuse (LFUS) Raised to Buy at Benchmark; PT $360
• New Oriental Education (EDU) ADRs Raised to Buy at China Renaissance
• ADRs Raised to Buy at HSBC; PT $68
• NVR (NVR) Raised to Neutral at Zelman; PT $7,675
• Stella-Jones (SJ CN) Raised to Sector Outperform at Scotiabank; PT C$98
• Warrior Met (HCC) Raised to Buy at UBS; PT $108
• Werner Enterprises (WERN) Raised to Neutral at Baird; PT $34
• Zillow (ZG) Raised to Equal-Weight at Barclays; PT $72
• Downgrades
• AGNC Investment (AGNC) Cut to Market Perform at KBW; PT $12
• Amcor (AMCR) Cut to Equal-Weight at Morgan Stanley; PT $46
• CalciMedica (CALC) Cut to Neutral at HC Wainwright
• CCL Industries (CCL/B CN) Cut to Sector Perform at Scotiabank; PT C$96
• First Solar (FSLR) Cut to Market Perform at BMO; PT $263
• Hudbay Minerals (HBM CN) Cut to Sector Perform at National Bank; PT C$40
• Omega Healthcare (OHI) Cut to Equal-Weight at Wells Fargo; PT $45
• PagSeguro (PAGS) Cut to Neutral at Grupo Santander; PT $14
• Prosperity Banc (PB) Cut to Neutral at Piper Sandler; PT $74
• Stellar Bancorp (STEL) Cut to Market Perform at Raymond James
• StoneCo (STNE) Cut to Neutral at Grupo Santander; PT $21
• Initiations
• Adlai Nortye (ANL) ADRs Rated New Buy at Lucid Capital Markets; PT $11
• Agnico Eagle Mines Ltd (AEM CN) Reinstated Neutral at JPMorgan
• American Healthcare REIT (AHR) Rated New Outperform at BMO; PT $55
• Amprius Technologies (AMPX) Rated New Buy at Needham; PT $20
• Barrick Mining (ABX CN) Rated New Overweight at JPMorgan; PT C$91.96
• Bicara Therapeutics (BCAX) Rated New Market Outperform at Citizens
• LightPath Tech (LPTH) Rated New Buy at Canaccord; PT $15
• NFI Group (NFI CN) Rated New Buy at TD Cowen; PT C$25
• Sharplink Gaming (SBET) Rated New Buy at Canaccord; PT $16
• TPG (TPG) Rated New Overweight at Barclays; PT $78

Data sources: Bloomberg, Reuters, CQG

David Wienke