Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET PCE Price Index, Personal Income, Personal Spending, GDP, Personal Consumption; 9:45ET
Fed’s Bostic speaks, S&P Global US Manufacturing PMI, Services PMI, Composite PMI; 10:00ET New Home Sales, U. of Mich. Sentiment; 12:45ET Fed’s Logan speaks; 3:30ET Fed’s Musalem speaks

Highlights and News:  

• US Imports More From Taiwan Than China for First Time in Decades
• Citi Strategists Cut Tech Stocks, Lift Exposure to US Small Caps
• BofA Warns of Risks to European Stock Rally From AI
• US equity funds see largest weekly inflow in five weeks
• Trump ordered the release of files about aliens and UFOs
  
• Epstein estate agrees to $35 million settlement in victim class action

Global stocks are showing a mixed performance with sentiment influenced by ongoing US-Iran geopolitical tensions as traders turn their focus to the Fed’s preferred
inflation gauge. US equity funds saw a substantial inflow of capital in the last week on easing worries over a selloff in the technology sector, while gold suffered its largest outflow in four months, Bank of America said. International equities had record
4-week inflow at $64.6B; Korea equities had largest 6-week inflow ever at $17.7B. Citigroup’s multi-asset strategists downgraded technology stocks to neutral as they diversify exposure away from megacap, while raising allocation into US small caps. The team
remains overweight US and Japanese equities, downgrades China to neutral and reduces UK underweight to 50%. The surge in goods going from Taiwan to the US was roughly double that going to China, with the US taking almost a third of Taiwan’s total exports last
year. US purchases of goods from China plunged almost 44% in December from a year earlier to $21.1 billion, while shipments from Taiwan more than doubled to $24.7 billion, Commerce Department data showed Thursday. Trump and Indonesia’s President Subianto finalized
a trade deal lowering US tariffs on goods to 19%, from a threatened 32%.

EQUITIES: 

US equity futures are muted as investors await the long-delayed core personal consumption expenditures data release and assessed the potential impact of conflict in the Middle East. The
PCE data may prove important in shaping the outlook for the “great rotation” trade, shifting capital out of technology stocks and into materials, energy, and other cyclical sectors tied to a stronger economy.  Trump may finally find out today whether the Supreme
Court views his tariffs as legal. Betting suggests about a 75% chance the justices will rule against them. Nvidia is close to finalizing a $30 billion investment in OpenAI that will replace the long-term $100 billion commitment agreed last year, the FT reported.
No major companies are due to report today, but the earnings season picks up pace again next week.

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

In pre-market trading, Akamai Technologies (AKAM) falls 11% after the software company gave an outlook for adjusted earnings that is weaker than
expected for both the first quarter and the full year. Ardelyx (ARDX) drops 6% after the drugmaker gave sales forecast for its Ibsrela drug in the first quarter that was softer than expected. Copart (CPRT) falls 8% after the online vehicle salvage auction
company reported operating income for the second quarter that missed. Floor & Decor (FND) climbs 4% after the flooring and tile retailer reported adjusted earnings per share for the fourth quarter that exceeded estimates. Grail (GRAL) tumbles 47% after the
early cancer detection test maker said Galleri, its multi-cancer screener, failed to meet its primary endpoint. Harmonic (HLIT) rises 9% after the communications equipment’s book-to-bill is seen as strong and reinforcing its growth potential. Hudbay Minerals
(HBM) declines almost 5% after the miner reported fourth-quarter adjusted earnings per share that missed. Newmont (NEM) drops 4% after the world’s biggest gold miner said it expects to produce less bullion this year. Opendoor Technologies (OPEN) climbs 19%
as the online marketplace for residential real estate reported revenue for the fourth quarter that beat estimates. RingCentral (RNG) rises 10% after the software company’s fourth-quarter results beat expectations on key metrics and it gave a positive forecast.
Texas Roadhouse (TXRH) rises 4% after the restaurant chain said it expects positive comparable restaurant sales growth for the year. Workiva Inc. (WK) gains 12% after the software company reported fourth-quarter results that beat expectations.

Rotation into industrials has seen XLI versus SP500 outperformance of nearly 14% year to date.

The big outperformer this year has been the oil services sector

European gauges are higher, looking for a fourth straight weekly gain, buoyed by strong earnings.  Moncler shares gain as much as 13% after reporting, leading luxury
stocks to outperform, while the energy and healthcare sectors lag. Kingspan climbs around 10% after the construction firm generated record revenue. Unipol shares rise as much as 6.6% after the Italian insurer topped expectations. Air Liquide shares rise 4%
after the French industrial-gas producer posted second-half earnings that beat expectations. Siegfried shares fall over 8% after weaker-than-expected 2026 guidance from the Swiss pharma firm. Aston Martin shares slip as much as 4.4% after the British carmaker
posted another profit warning. Britain recorded its biggest budget surplus on record in January, driven by a sharp rise in capital gains tax receipts and reduced debt interest payments. Separate data showed retail sales surged 1.8%, the fastest growth in 20
months. Euro-area private-sector activity beat expectations as manufacturers recorded their best performance since 2022 thanks to surprise growth in Germany. Stoxx 600 +0.4%, DAX +0.2%, CAC +0.7%, FTSE 100 +0.5%. Chemicals +1.6%, Luxury +1.5%, Personal Goods
+1.4%. Energy -0.8%, Healthcare -0.3%.

Shares in Asia were mostly lower in the last session of a holiday-thinned trading week, as renewed fears of conflict between the US and Iran weighed on risk sentiment.
The MSCI Asia Pacific Index dipped 0.4%. Alibaba and Tencent were the biggest drags, with investors rotating into smaller tech names in Hong Kong as the market reopened following the Lunar New Year break. Hang Seng Tech Index fell nearly 3%. Indices fell more
than 1% in Japan and New Zealand, while South Korea’s Kospi touched a record high for a second straight day, powered by chip and defense stocks. Mainland China and Taiwan markets remained closed for the Lunar New Year holiday and will reopen next week. Hang
Seng Tech -2.9%, Topix -1.1%, Hang Seng Index -1.1%, Thailand -0.9%, ASX 200 -0.05%, Indonesia -0.05%. Kospi +2.3%, Philippines +0.9%, Sensex +0.4%, Singapore +0.3%.

FIXED INCOME: 
 

Treasuries are steady with yields broadly trading around Thursday’s closing levels across the curve, as investors await a busy session that includes a packed data
slate — headed by PCE price index and PMI’s — along with three Fed speakers also scheduled. 10-year yield is -1bp at 4.06%; 2s10s -1bp, 5s30s flat. Next week’s Treasury auctions include 2-, 5- and 7-year notes for a combined $183 billion, commencing Tuesday.
Fed governor Stephen Miran uncharacteristically said on Thursday he now sees fewer rate cuts this year because of an improving labor market. 

METALS: 

Gold is higher, supported by persistent tensions between the United States and Iran, while investors awaited key US inflation data to assess the outlook for Federal
Reserve monetary policy. Spot gold trades near $5,030 an ounce with spot silver above $80.50. Goldman said central banks remain eager to buy gold, despite a dip in December purchases due to market volatility. Newmont expects gold output to drop 10% this year,
partly due to planned upgrades at some managed mines and lower production at two ventures with Barrick. Spot gold +0.7%, Silver +2.6%, Copper futures +0.5%. 

ENERGY:   

Oil eases from a six-month high as Trump oversees the biggest US military buildup in the Middle East since 2003 and warns Iran that it has 10 to 15 days at most to
strike a deal over its nuclear program — or face severe consequences. The president is also weighing a limited initial strike designed to drive Tehran to the negotiating table, the Wall Street Journal reported. Brent holds above $71 a barrel, on course for
a weekly gain of about 5%, while WTI traded near $66. Oil time spreads are reacting to the increased risk with Brent’s one-year spread moving to the widest backwardation since June. Iran’s government has said it will “defend itself and respond like never before”
if Trump follows through on threats to attack the country. India is set to import the most crude from Saudi Arabia in more than six years this month, as the country faces sustained US pressure to reduce purchases of Russian barrels. Chinese refiners are snapping
up Russian oil that India is shunning.  WTI -0.4%, Brent -0.3%, US Nat Gas -0.6%, RBOB -0.05%.

CURRENCIES: 

In currency markets, the dollar steadied before a series of US data releases, including Core PCE, the Fed’s preferred inflation measure. The euro recouped some of
its earlier decline after data showed private-sector activity in the euro area surpassed expectations as manufacturers recorded their best performance since 2022. The yen dipped after Japan’s core CPI eased to the slowest pace in two years, boosting the case
for a cautious BOJ.  New Zealand’s dollar slipped after central bank Governor Anna Breman said the economy has room to recover this year without generating excessive inflation, a signal that RBNZ may not need to tighten policy further. US$ Index -0.03%, GBPUSD
+0.1%, EURUSD -0.05%, USDJPY +0.15%, AUDUSD -0.15%, NZDUSD -0.3%, USDCHF +0.15%, USDCAD +0.05%, USDSEK +0.05%, USDNOK ~flat.

Spot Bitcoin +0.4%, Spot Ethereum -0.1%. 

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
• Canadian Tire (CTC/A CN) Raised to Sector Perform at Scotiabank; PT C$180
• CoStar (CSGP) Raised to Buy at Jefferies; PT $67
• Etsy (ETSY) Raised to Overweight at Barclays
• Group 1 Automotive (GPI) Raised to Overweight at JPMorgan; PT $370
• Healthcare Services (HCSG) Raised to Outperform at William Blair
• Neptune Insurance (NP) Raised to Neutral at BofA; PT $23
• Southern Co (SO) Raised to Outperform at Mizuho Securities; PT $104
• Raised to Equal-Weight at Wells Fargo; PT $96
• Sprott (SII CN) Raised to Outperform at RBC; PT C$218
• Trilogy Metals (TMQ CN) Raised to Buy at TD Cowen; PT C$8
• YETI Holdings (YETI) Raised to Buy at B Riley; PT $54
• Downgrades
• Alight (ALIT) Cut to Neutral at Citi; PT $1
• BorgWarner (BWA) Cut to Sell at UBS; PT $55
• Coeur Mining (CDE) Cut to Hold at Canaccord
• Eldorado Gold (ELD CN) Cut to Neutral at CIBC; PT C$73.96
• Ivanhoe Mines (IVN CN) Cut to Hold at Canaccord; PT C$15
• Latam Airlines (LTM CI) ADRs Cut to Equal-Weight at Morgan Stanley
• Mister Car Wash (MCW) Cut to Market Perform at Raymond James
• Molina (MOH) Cut to Equal-Weight at Wells Fargo; PT $141
• Peyto Exploration (PEY CN) Cut to Hold at TD Cowen; PT C$25
• Reliance (RS) Cut to Market Perform at BMO; PT $320
• Cut to Neutral at JPMorgan; PT $330
• Superior Plus (SPB CN) Cut to Market Perform at BMO; PT C$8
• Cut to Neutral at CIBC; PT C$8
• TechnipFMC (FTI) Cut to Hold at HSBC; PT $62
• Teekay Tankers (TNK) Cut to Hold at DNB Carnegie
• Walmart (WMT) Cut to Hold at HSBC; PT $131
• Initiations
• AbbVie (ABBV) Rated New Overweight at Barclays
• Affirm Holdings (AFRM) Rated New Neutral at Baird; PT $55
• Beam Therapeutics (BEAM) Rated New Buy at Canaccord; PT $74
• Biogen (BIIB) Rated New Equal-Weight at Barclays
• Bristol Myers (BMY) Rated New Overweight at Barclays
• Dauch Corp. (DCH) Rated New Buy at Jefferies; PT $10.35
• Eli Lilly (LLY) Rated New Overweight at Barclays
• General Electric Aerospace (GE) US Rated New Overweight at Morgan Stanley; PT $425
• Gilead (GILD) Rated New Equal-Weight at Barclays
• Merck & Co (MRK) Rated New Overweight at Barclays
• Neo Performance (NEO CN) Rated New Outperform at BMO; PT C$30
• Okyo Pharma (OKYO) Rated New Overweight at Piper Sandler; PT $7
• Pfizer (PFE) Rated New Underweight at Barclays
• SAP (SAP GR) ADRs Rated New Overweight at Morgan Stanley; PT $284
• Satellogic (SATL) Rated New Overweight at Cantor; PT $7
• Terra Innovatum Global (NKLR) Rated New Buy at Canaccord; PT $10

Data sources: Bloomberg, Reuters, CQG

David Wienke