Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET Jobless Claims,
Trump speaks at National Prayer Breakfast; 10:00ET US December JOLTS Job Openings: 10:50ET Fed’s Bostic speaks; 2:00ET Mexico Rate Decision

Highlights and News:  

• ECB LEAVES DEPOSIT FACILITY RATE AT 2.00%; EST. 2.00%
• BOE says interest rates ‘likely to be reduced further’ – says risk of inflation persistence less pronounced
• Greenland experienced its warmest January on record this year
• Netanyahu about Iran: “If they attack us, we will respond with a force never seen before”
  
• US pitches mineral price floors, investments to tackle China
• China now generates a record 10,000 TWh of electricity annually; US produces 4,500 TWh

World stocks fell as concerns about the exploding costs of the AI boom drove tech worries. Europe geared up for a busy day of central bank meetings and silver suffered
another crash in the unruly metals markets. Global tensions eased somewhat after a telephone call between the leaders of China and the United States, which is also set for talks with Iran this week. The US-Iran negotiations are confirmed for Friday in Oman,
yet ongoing disagreements over the talks’ boundaries and objectives mean success in narrowing key gaps remains in question. Trump sent a fresh warning to Iran’s leaders as US military forces amass in the region. Investors also look to Ukraine peace talks this
week, which Ukrainian President Zelenskiy said will be impacted by Russia’s attacks on his country’s energy infrastructure. In geopolitics, China is asking state firms to halt talks over new projects in Panama, in apparent retaliation after Panama’s Supreme
Court voided a contract for Hong Kong-based CK Hutchison Holdings to operate two strategic ports at the Panama Canal. The Trump administration hosted a critical minerals summit with 55 countries to reduce dependence on China, with the US pitching price floors
and US private equity investment. The European Central Bank kept interest rates unchanged as officials assess the economic toll of a rally in the euro and renewed trade unpredictability. The ECB didn’t offer guidance on future steps, reiterating that incoming
data will steer decision-making.

EQUITIES: 

US equity futures erase earlier gains to trade lower with Nasdaq leading losses after the index wiped out its advance for the year over the prior two sessions. Volatility remains elevated
with the VIX up around 12%. The rotation away from tech toward more traditional sectors continues. Investors are buying consumer staples stocks in droves, with rolling four-week average inflows into the sector reaching a record, according to Bank of America
analysts.  Alphabet released solid results after the bell, but it also shocked analysts by targeting capital expenditures of $175 billion to $185 billion this year, way above Wall Street’s estimates. Shares of Qualcomm and Arm are sharply lower on concerns
that a shortage of memory chips will limit phone production. Traders are looking for the floor for AI losers, with Jefferies’ trading desk predicting the group is due for a “vicious rally.” Overall positioning in equities remains elevated, despite a broad
unwind in crowded trades, leaving stocks vulnerable to downside moves in the near term, according to JPMorgan’s cross-asset indicator. They still see a strong liquidity backdrop in the US acting as a tailwind for stocks this year. Amazon results are due after
the close with AI spending plans the main focus. Strategy (MSTR) will report 4Q25 earnings tonight, estimates are eps ($18.64) on rev $118.92M.

Futures ahead of the bell: E-Mini S&P -0.5%, Nasdaq -0.65%, Russell 2000 -0.6%, DJI -0.3%

In pre-market trading, gold and silver mining stocks fell as the metals pulled back from a recovery rally. Among silver stock decliners: Coeur
Mining -6.1%, Endeavour Silver -7.3%, Pan American Silver -6.0%, Silvercorp Metals -6.1%, First Majestic Silver -8.0%. Among gold miners: Newmont -3.7%, Barrick Mining -2.3%, Agnico Eagle Mines -3.2%, Kinross Gold -4.0. Align Technology (ALGN) climbs 11% after
the medical devices firm reported adjusted earnings per share for the fourth quarter that surpassed Wall Street’s estimates. ARM Holdings (ARM) falls 7% after the company’s sales forecast disappointed investors, who are concerned about a slowdown in the smartphone
market. Carrier Global (CARR) falls 6% after the HVAC company forecast full-year sales below what analysts expected. Elf Beauty (ELF) jumps 4% after the cosmetics company boosted its adjusted Ebitda guidance for the full year. Estée Lauder Cos. (EL) tumbles
12% after its outlook boost failed to reassure some investors about the pace of the cosmetics conglomerate’s turnaround. Fluence Energy (FLNC) drops 17% after the energy storage technology company’s fiscal first quarter revenue disappointed. Qualcomm (QCOM)
falls 11% after the chipmaker’s revenue forecast was weaker than expected. Symbotic (SYM) is up 5% after the technology firm forecast total revenue for the second quarter that topped estimates.

European gauges are lower with Autos and miners the biggest decliners as the tech sector advances after prior drops. Rheinmetall slumps as much as 9.5% after a disappointing
analyst call. BNP Paribas shares rise as much as 4.7% after the French lender reported net income for the fourth quarter that beat estimates. Pandora rises as much as 8.2%, driven by a plunge in the spot silver price and after reporting its full-year 2025
results. Rational shares rise as much as 16% after the German manufacturer of catering appliances impressed analysts with its fourth quarter profits. Maersk falls as much as 8.2% after the Danish shipping group provided an outlook for 2026 in which it expects
earnings to fall as the reopening of the Red Sea shipping route leads to lower rates. Volvo Car shares fall ~27%, their biggest drop on record, after the automaker reported weaker-than-expected fourth quarter earnings. German factory orders rose at the fastest
pace in two years, with demand increasing 7.8% in December, boosting hopes of a manufacturing recovery. Stoxx 600 -0.8%, DAX -0.7%, CAC -0.25%, FTSE 100 -0.4%. Autos and Miners -2.6%, Utilities -1.8%. Technology +0.8%.

Shares in Asia largely declined following US tech weakness with the Kospi index sliding almost 4%.  The MSCI Asia Pacific Index slid 1.1%, with tech-heavy markets leading
declines on concerns over the outlook for AI-linked companies. Underwhelming forecasts from AMD and Qualcomm as well as tepid earnings from Alphabet also weighed on sentiment, dragging Asian chipmakers including Samsung Electronics and TSMC lower. Baidu rose
2.7% after announcing a three-year stock buyback program of as much as $5 billion and plans to issue its first dividend in 2026. Philippine stocks rose as inflation remained within the central bank’s target range despite accelerating for the second month in
a row. Shares in India traded lower, weighed by weakness in metal and tech firms. Chinese consumer stocks from toymakers to cosmetics producers stage a sharp rallied, with traders pointing to fund‑flow
rotation ahead of the Lunar New Year holiday. Moody’s Ratings downgraded its outlook for Indonesia to negative from stable, citing concerns over policy stability under President Prabowo Subianto. Kospi -3.9%, Taiwan -1.5%, Nikkei 225 -0.9%, CSI 300 -0.6%,
Sensex -0.6%, Vietnam -0.5%, Indonesia -0.5%, ASX 200 -0.4%, Thailand was flat. Hang Seng Index +0.15%, Philippines +0.15%, Singapore +0.2%.

FIXED INCOME: 
 

US treasury yields slide as gilts rally after Bank of England left rates unchanged in a 5-4 vote with dissenters favoring a cut. Statement announcing the 3.75% rate
was taken as dovish, and swaps priced in additional BOE easing this year. US session includes jobless claims and JOLTS job openings. Japan’s 30-year bonds gained after an auction drew stronger demand, easing immediate concerns about longer-maturity debt ahead
of a crucial election. US 10-year yield is -4bps and the curve is mixed. 2s10s-0.5bp; 5s30s +2bps.

METALS: 

Silver leads metals sharply lower in a volatile trading session. Spot silver sinks almost 17% before finding support, and gold falls to below $4,800 an ounce before
paring some of its decline. A China trader who made $3 billion on bullish gold bets has now built a massive net short position on silver. Copper faced additional pressure from worries over demand and rising stocks in warehouses registered with the London Metal
Exchange. Copper will be included in the US’s planned $12 billion critical minerals stockpile, mining billionaire Robert Friedland said.  Spot gold -2.3%, Silver -13%, Copper futures -0.8%. 

ENERGY:   

Oil prices fell for the first time in three days following Iran’s confirmation of upcoming negotiations with the United States, which reduced immediate fears of potential
military action against the key OPEC member. Iranian Foreign Minister Abbas Araghchi confirmed that the talks are scheduled to take place in Oman on Friday, though significant differences in the parties’ positions on the scope and agenda of the US-Iran negotiations
leave it uncertain whether major disagreements can be resolved. WTI crude futures drop more than 2% to near $63.40 a barrel while Brent dropped toward $68 a barrel, after adding 4.8% over the previous two sessions. Significant crude draw last week, alongside
the largest distillate inventory reduction in nearly five years, driven by freezing temperatures that curtailed production while boosting demand—particularly for heating in the Northeast. WTI -2%, Brent -1.9%, US Nat Gas +1.8%, RBOB -1%.

CURRENCIES: 

In currency markets, the dollar catches a small bid to a two-week high as metals move sharply lower. Commodity currencies underperform G-10 peers. Sterling slipped
as the BOE came within a vote of cutting interest rates and as doubts build over Prime Minister Keir Starmer’s grasp on power. The yen steadied as Japanese government bonds gained after a solid 30-year auction soothed market sentiment ahead of this weekend’s
Lower House election. US$ Index +0.15%, GBPUSD -0.55%, EURUSD -0.1%, USDJPY -0.02%, AUDUSD -0.35%, NZDUSD -0.15%, USDCHF -0.15%, USDCAD +0.1%, USDSEK +0.4%, USDNOK +0.6%.

Spot Bitcoin -4.6%, Spot Ethereum -3.3%. Bitcoin sinks after Treasury Secretary Bessent says US government can’t tell banks to bail out crypto. JPMorgan says bitcoin
looks even more attractive compared to gold over the long term after large outperformance of gold since last October, coupled with sharp rise in gold volatility.

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
• Adient (ADNT) Raised to Buy at Deutsche Bank; PT $33
• Brookfield Asset Management (BAM CN) Raised to Outperform at BMO
• Celanese (CE) Raised to Buy at Jefferies; PT $86
• DigitalOcean (DOCN) Raised to Overweight at Cantor; PT $68
• FuboTV (FUBO) Raised to Buy at Seaport Global Securities; PT $3
• Jack Henry (JKHY) Raised to Overweight at Stephens; PT $205
• Raised to Outperform at Baird; PT $205
• Marimaca Copper Corp (MARI CN) Raised to Buy at Paradigm Capital; PT C$15
• Snap (SNAP) Raised to Buy at B Riley; PT $10
• Uber (UBER) Raised to Market Outperform at Citizens; PT $100
• Varonis Systems (VRNS) Raised to Buy at DA Davidson; PT $30
• Zegna Group (ZGN) Raised to Buy at UBS; PT $11.50
• Zoom Communications (ZM) Raised to Outperform at Wolfe; PT $115
• Downgrades
• Americold Realty Trust (COLD) Cut to Underperform at BofA; PT $13
• Cabot Corp (CBT) Cut to Neutral at Mizuho Securities; PT $75
• Corteva (CTVA) Cut to Neutral at JPMorgan
• Emerson Electric (EMR) Cut to Hold at Deutsche Bank
• First Interstate Banc (FIBK) Cut to Equal-Weight at Stephens
• Fox Corp (FOXA) Cut to Equal-Weight at Wells Fargo; PT $75
• Kemper (KMPR) Cut to Market Perform at Citizens
• KKR Real Estate Finance (KREF) Cut to Neutral at BTIG
• Lundin Mining (LUN CN) Cut to Hold at Paradigm Capital; PT C$34
• Microsoft (MSFT) Cut to Hold at Stifel; PT $392
• Old Dominion (ODFL) Cut to Underperform at Baird; PT $204
• Public Storage (PSA) Cut to Equal-Weight at Wells Fargo; PT $295
• Qualcomm (QCOM) Cut to Neutral at BofA; PT $155
• Six Flags (FUN) Cut to Neutral at Citi; PT $20
• Smartstop Self Storage REIT (SMA) Cut to Equal-Weight at Wells Fargo
• Steven Madden (SHOO) Cut to Underperform at Jefferies; PT $30
• TechnipFMC (FTI) Cut to Neutral at Oddo BHF
• TransDigm (TDG) Cut to Sector Weight at KeyBanc
• Ultrapar (UGPA3 BZ) ADRs Cut to Neutral at Goldman; PT $5.40
• Webster Financial (WBS) Cut to Neutral at UBS; PT $75
• Cut to Equal-Weight at Barclays; PT $75
• Initiations
• Andersons (ANDE) Rated New Buy at Benchmark; PT $75
• Cava Group (CAVA) Rated New Buy at Benchmark; PT $80
• Coupang (CPNG) Rated New Underperform at Bernstein; PT $17
• Incyte (INCY) Rated New Buy at HC Wainwright; PT $135
• Karyopharm (KPTI) Reinstated Overweight at Cantor
• Louisiana-Pacific (LPX) Rated New Outperform at Oppenheimer; PT $115
• North American Construction (NOA CN) Rated New Buy at Roth Capital Partners; PT C$34.21
• Stoke Therapeutics (STOK) Rated New Buy at Guggenheim; PT $60
• Suzano (SUZB3 BZ) ADRs Rated New Buy at Jefferies; PT $13.40
• Trinity Capital (TRIN) Rated New Buy at Clear Street; PT $18

Data sources: Bloomberg, Reuters, CQG

David Wienke