Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:15ET
ADP Employment Change; 9:45ET S&P Global US Services PMI, S&P Global US Composite PMI; 10:00ET ISM Services

Highlights and News:  

• US household allocation to equities as a % of financial assets is up to a record 47.1%
• Texas Instruments will buy Silicon Laboratories in a deal valued at $7.5 billion
• Nvidia’s Huang dismisses fears AI will replace software tools
• Iran asks US to Limit Agenda in Talks to Islamic Republic’s Nuclear Program
• China warned Panama would pay a heavy price for voiding CK Hutchison’s port contracts
• Fed Governor Miran steps down from White House CEA role
• US shutdown ends as Trump signs his funding deal with Democrats

Global stocks edged higher as markets digest yesterday’s AI-driven rotation out of growth/tech into value/cyclicals, with software stocks under pressure. The intense
selloff in global software stocks extended into a second consecutive day, as investor worries intensified over the potential disruption that rapid artificial intelligence advancements could pose to these firms’ business models. Analysts described the mood
as one of indiscriminate “get me out” trading, with sectors vulnerable to AI automation. Nvidia CEO Jensen Huang rejected concerns that artificial intelligence could displace software and associated tools, branding the notion “illogical,” following a sharp
decline in global software stocks on Tuesday. On the economic front, Euro zone inflation dipped to 1.7% in January, today’s data showed, entering a soft patch that most economists expect will last for at least a year and keep the ECB on hold. Iran has asked
the US to move talks originally planned for Turkey to Oman and to limit the agenda to the Islamic Republic’s nuclear program.

EQUITIES: 

US equity futures are mixed, led by economically sensitive shares in the Russell 2000 small caps while Nasdaq contracts slip following Tuesday’s Anthropic-inspired tech selloff. The rotation
from technology megacaps persisted as renewed fears over AI-driven disruption weighed on markets. A Goldman Sachs basket of US stocks at risk from AI had its worst day in nearly five years Tuesday. A broader software basket has now lost $2.1 trillion in value
from its latest highs, equivalent to a 27% drop in market cap. Per data from Goldman Sachs’ Prime Brokerage book, software stands out as the most heavily net-sold industry group year-to-date in 2026.Net exposure to the sector—as a percentage of total US net
market value—dropped to a fresh all-time low of 4.2% at the end of last week. This marks a steep decline from 7% at the beginning of 2026 and well below the historical high of 17.7%. Advanced Micro Devices slid ~7% in premarket trading after issuing an underwhelming
sales forecast. The stock has surged about 50% since October. Texas Instruments is said to be in advanced talks to buy Silicon Labs for about $7 billion, the FT reported. GOOGL and QCOM report earnings after the close.

Futures ahead of the bell: E-Mini S&P +0.15%, Nasdaq -0.3%, Russell 2000 +0.5%, DJI +0.25%

In pre-market trading, Alphabet (GOOGL) is up 1% ahead of earnings due after the market close. AMD (AMD) slides 9% after the chipmaker’s sales
forecast underwhelmed investors. Boston Scientific (BSX) falls 9% after the maker of medical devices gave a profit and sales growth forecast for 2026 that fell short. Chipotle (CMG) falls 5% after the restaurant chain operator’s underwhelming annual comparable
sales forecast. Eli Lilly & Co. (LLY) rises 7% after providing an upbeat sales forecast for the year. Lilly expects sales to grow as much as 27% this year, in sharp contrast to rival Novo who forecasts a decline in 2026. Emerson Electric (EMR) rises 4% after
the automation technology provider reported 9% growth in underlying orders in its first quarter. Lumen Technologies (LUMN) falls 4% after the wireline telecommunications company’s results and outlook prompted a downgrade from Raymond James. Lumentum (LITE)
rises 10% after the maker of optical and photonic products posted stronger-than-expected second-quarter results and gave a robust forecast. Match Group (MTCH) jumps 7% after the dating service provider reported revenue for the fourth quarter that beat. Silicon
Laboratories (SLAB) jumps 53% after agreeing to be acquired by Texas Instruments for $231 per share in cash. Sonos (SONO) rises 12% after the speaker company’s first-quarter results beat expectations on key metrics. Take-Two Interactive (TTWO) rises 5% after
the video game publisher raised its fourth-quarter bookings forecast. Uber Technologies (UBER) falls 6% after giving a weak profit outlook.

European gauges rose following upbeat earnings from GSK Plc and others, while data showed inflation eased to the lowest in over a year. Health care stocks lag as Novo
Nordisk sinks after a shock forecast for lower sales. Technology resumes declines a day after software stocks plunge on fears over disruption from artificial intelligence. GSK Plc reported better-than-expected profit in the fourth quarter, buoyed by its HIV
and asthma medicines. Handelsbanken gains as much as 4.4% after posting a top-line beat in its full-year report. AMS Osram shares rise as much as 13% after agreeing to offload its sensor business to Infineon.  Wendel shares rise more than 7% after Germany’s
Henkel agreed to buy Stahl Parent from Stahl Group. European data analytics, professional services, and software stocks extended their declines, building on widespread losses in global peers, as Anthropic’s recent launch of a specialized legal AI plugin for
its Claude model underscored the mounting risks of AI disruption to firms whose core offerings appear most exposed to automation. Novo Nordisk A/S plunged 17% after it shocked investors by forecasting a steep decline in sales this year. UBS shares fell the
most in eight months as concerns over $14 billion of outflows in its US wealth management business overshadowed its profit beat. Stoxx 600 +0.4%, DAX -0.4%, CAC +0.9%, FTSE 100 +1.2%. Chemicals +3.6%, Telecom +3.2%, Autos +2.8%, Retail +2%. Technology -1.5%,
Media -1.3%. 

Shares in Asia were mixed after overcoming early declines driven by technology firms on AI disruption concerns.  The MSCI Asia Pacific Index was little changed after
falling as much as 0.6%, finding support from gains in financial and materials stocks even as software makers continued to weigh. South Korea’s Kospi climbed to a fresh high, even as chipmakers Samsung Electronics and SK Hynix edged lower after recent strong
gains. Indian shares tracked the broader regional trend, trading little changed after paring early gains sparked by optimism over a trade deal with the US. Chinese solar stocks rallied after local media reported that teams from SpaceX and Tesla Inc. had visited
domestic companies, buoying sentiment. Chinese coal shares jumped after data show China fielded a record number of proposals for new coal-fired power plants last year. Chinese agriculture technology-related stocks rise after the nation vows to boost integration
of AI and agriculture. Kospi +1.6%, CSI 300 +0.8%, ASX 200 +0.8%, Thailand +0.8%, Singapore +0.4%, Indonesia +0.3%, Taiwan +0.3%, Sensex +0.1%, Hang Seng Index +0.05%. Philippines -0.4%, Nikkei 225 -0.8%, Vietnam -1.2%, Hang Seng Tech -1.8%.

FIXED INCOME: 
 

Treasuries are slightly cheaper across the curve, with yields around 1bp higher vs Tuesday’s close and the curve roughly flat. US 10-year yield near 4.28% is more
than 1bp cheaper on the day. US session includes ISM services gauge, following Treasury quarterly refunding announcement at 8:30ET. IG dollar issuance slate is empty so far. Bank of America’s $7b offering led a $21.35b new issue slate Tuesday, and Visa sold
$3b in four parts with orders said to exceed $11b. The $48b borrowing spree so far this week accounts for more than a quarter of the $190b forecast for February. Fed speaker slate includes Governor Cook on monetary policy and the economic outlook at the Economic
Club of Miami (6:30pm).

METALS: 

Gold rose and is headed for its biggest two-day gain in more than 17 years after a vicious two-day selloff that drove silver down by as much as 30% in a day. Spot
gold rebounded above $5,090 an ounce as dip buyers snapped it up following a historic collapse from record highs. A Fidelity fund that sold bullion before its biggest slide in four decades said it’s ready to buy again. Copper slipped after its biggest one-day
advance in more than three years, with investors shifting their focus back to the outlook for Chinese demand. The spot market for copper has weakened in China as the metal became expensive for fabricators in the world’s top consumer, with fresh signs of demand
softness on Wednesday as inventories jumped in London Metal Exchange warehouses in Asia. Spot gold +2%, Silver +6.2%, Copper futures -1.3%. Gold, silver, and copper futures all held their key fist supports at their
50dma.  

ENERGY:   

Oil prices fluctuated between modest gains and losses as traders balanced escalating geopolitical risks in the Middle East, highlighted by the US downing of an Iranian
drone, with supportive news of a substantial drawdown in US crude inventories. The volatility follows recent incidents that reignited fears of potential supply disruptions through key chokepoints like the Strait of Hormuz, though ongoing US-Iran diplomatic
talks (set to resume Friday) tempered some upside momentum. API data showed US crude stockpiles plunged by over 11 million barrels last week—the largest drop in months—far exceeding expectations for a build and signaling tighter near-term supply. That would
be the biggest drop in seven months if confirmed by the EIA today.  Morgan Stanley raised its near-term forecasts for Brent by $5 a barrel to $62.50, saying it expects geopolitical risks to offer strong support. Brent crude hovered around $67.50 per barrel
ahead of planned US-Iran talks, while WTI traded near $63.50. Iran has asked the US to move diplomatic talks originally planned for Turkey to Oman and to limit the agenda to the Islamic Republic’s nuclear program. WTI +0.25%, Brent +0.25%, US Nat Gas +2.1%,
RBOB +0.35%.

CURRENCIES: 

In currency markets, the dollar is mostly higher against the currency majors after Tuesday’s slide. The yen underperforms G-10 peers on bearish positioning ahead
of this weekend’s Japan election. Pound and euro tick higher. New Zealand’s jobless rate rose to 5.4% in the fourth quarter, the highest since 2015, even as hiring jumped. Employment rose 0.5% from the previous three months, the first increase since the second
quarter of 2024. The New Zealand dollar dropped after the report. US$ Index +0.02%, GBPUSD +0.15%, EURUSD +0.05%, USDJPY +0.55%, AUDUSD +0.15%, NZDUSD -0.25%, USDCHF +0.05%, USDCAD +0.1%, USDSEK +0.5%, USDNOK +0.15%.

Spot Bitcoin -0.1%, Spot Ethereum -1.8%. almost half a trillion dollars has been wiped off cryptocurrencies in less than a week as a selloff led by Bitcoin accelerates.
Total crypto market value has slumped by $467.6 billion since Jan. 29, according to CoinGecko data.

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
• Airbnb (ABNB) Raised to Market Outperform at Citizens; PT $160
• Booking (BKNG) Raised to Outperform at Mizuho Securities; PT $6,000
• Broadridge (BR) Raised to Buy at DA Davidson; PT $228
• Capri Holdings (CPRI) Raised to Outperform at Baird; PT $26
• Cloudflare (NET) Raised to Buy at BTIG; PT $199
• Devon (DVN) Raised to Overweight at Barclays; PT $50
• Endeavour Mining (EDV CN) Raised to Outperform at CIBC; PT C$117
• Enphase Energy (ENPH) Raised to Outperform at RBC; PT $54
• Raised to Market Perform at BMO; PT $41
• Equinox Gold (EQX CN) Raised to Outperform at CIBC; PT C$31
• Five Below (FIVE) Raised to Buy at BofA; PT $233
• Fortuna Mining (FVI CN) Raised to Neutral at CIBC; PT C$16
• GE Vernova (GEV) Raised to Outperform at Baird
• Lumentum (LITE) Raised to Buy at B Riley; PT $526
• NOV Inc. (NOV) Raised to Equal-Weight at Barclays; PT $20
• Omnicell (OMCL) Raised to Buy at BofA
• PayPal (PYPL) Raised to Neutral at Compass Point; PT $51
• Verisk (VRSK) Raised to Outperform at BMO; PT $233
• Downgrades
• AES Corp (AES) Cut to Equal-Weight at Barclays; PT $15
• Alpha Metallurgical Resources Inc (AMR) Cut to Neutral at B Riley
• Booking (BKNG) Cut to Market Perform at Citizens
• CF Industries (CF) Cut to Sell at Rothschild & Co Redburn; PT $72
• Entegris (ENTG) Cut to Hold at Deutsche Bank; PT $105
• Himax Technologies (HIMX) ADRs Cut to Equal-Weight at Morgan Stanley
• Lumen Technologies (LUMN) Cut to Market Perform at Raymond James
• PayPal (PYPL) Cut to Hold at Canaccord; PT $42
• Cut to Hold at HSBC; PT $47
• Cut to Market Perform at Citizens
• Peakstone Realty Trust (PKST) Cut to Hold at Truist Secs; PT $21
• TransDigm (TDG) Cut to Neutral at Baird; PT $1,400
• Webster Financial (WBS) Cut to Hold at TD Cowen; PT $75
• Cut to Hold at Jefferies; PT $75
• Cut to Sector Perform at RBC; PT $75
• Cut to Equal-Weight at Stephens; PT $73
• Cut to Hold at Truist Secs; PT $74
• Wesdome Gold Mines (WDO CN) Cut to Sector Perform at National Bank
• Initiations
• Aduro Clean Technologies (ACT CN) Rated New Buy at HC Wainwright
• Alpine Income Property Trust (PINE) Rated New Overweight at Cantor
• BKV (BKV) Rated New Buy at SWS; PT $36
• CTO Realty (CTO) Rated New Overweight at Cantor; PT $20
• Global Net Lease (GNL) Rated New Overweight at Cantor; PT $11
• Kontoor Brands (KTB) Rated New Hold at Jefferies; PT $65
• Levi Strauss (LEVI) Rated New Buy at Jefferies; PT $25
• Modiv Industrial (MDV) Rated New Overweight at Cantor; PT $18
• Pacifica Silver (PSIL CN) Rated New Outperform at Raymond James; PT C$2.85
• Pagaya (PGY) Rated New Buy at Freedom Capital; PT $30
• SEI (SEIC) Rated New Buy at UBS; PT $115
• Whitestone REIT (WSR) Rated New Overweight at Cantor; PT $16

Data sources: Bloomberg, Reuters, CQG

David Wienke