Daily Game Plan

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

DATA/HEADLINES   10:00ET Leading Index; 12:00ET Fed’s Barkin speaks

TODAY’S HIGHLIGHTS:  

• Joe Biden’s 81^st birthday today
• Trump opens up stunning 39 point lead over Ron DeSantis in his home state of Florida – UNF poll
• Japan’s government said it was “directly approaching” Yemen’s Iran-backed Houthis after they hijacked a Japanese-operated
  cargo ship in the Red Sea

World stocks were mostly flat in thin trading ahead of the US Thanksgiving holiday on Thursday and in the absence of major data releases. There were media reports
that Israel, the United States and Hamas had reached a tentative agreement to free dozens of hostages in Gaza in exchange for a five-day pause in fighting, but no confirmation as yet. Sweden’s central bank meets this week and may hike again, given high inflation
and the weakness of its currency. Argentina’s weekend election result saw right-wing libertarian Javier Milei become the new president on a radical ticket of how to fix an economy battered by triple-digit inflation and rising poverty. His plans include shutting
the central bank, ditching the peso and dollarizing the economy.                                       

EQUITIES: 
 

US equity futures fluctuated as investors are awaiting publication Tuesday of the FOMC minutes from the last Fed rates meeting. The S&P is now up nearly 18% for the
year and less than 2% away from its July peak. Goldman Sachs note the “Magnificent 7” mega cap stocks have returned 73% for the year so far, compared with just 6% for the remaining firms in the index. Goldman expects the mega-cap tech stocks will continue
to outperform.  Black Friday sales will test the pulse of the consumer-driven US economy this week, while the upcoming Thanksgiving holiday made for thin markets. The flow of economic data turns to a trickle this week, but tomorrow’s minutes of the Federal
Reserve’s last meeting will offer some color on policy makers’ thinking.                      

Futures ahead of the bell: E-Mini S&P -0.02%, Nasdaq -0.01%, Russell 2000 -0.15%, Dow -0.1%.

In pre-market trading, Microsoft climbed as much as 2.7% after hiring OpenAI co-founders Sam Altman and Greg Brockman to lead its in-house artificial intelligence team. Tech major Nvidia
reports quarterly results tomorrow, and all eyes will be on the state of demand for its AI related products. Bristol Myers Squibb (BMY) falls 4% after saying the FDA is convening an advisory committee to review a drug application and peer Bayer stopped a trial.
Chegg (CHGG) shares drop 3.5% after the edtech company was downgraded at Morgan Stanley. Uber (UBER) falls 2% after proposing to offer $1.2 billion aggregate principal amount of convertible senior notes due 2028.

European gauges fluctuated, while investors awaited updates on the government’s fiscal policy later this week. Closely watched surveys of European manufacturing are due this week and
any hint of weakness will encourage more wagers on early rate cuts from the ECB. Markets imply around a 70% chance of an easing as soon as April, even though many ECB officials are still talking of the need to keep policy tight for longer. Italian banks rallied
after Moody’s lifted its outlook on the country’s debt to stable late on Friday. The Stoxx Europe 600 index fluctuated as a slew of negative corporate news weighed on shares. Among individual names, shares of equipment rental firm Ashtead Group plunged on
downbeat annual profit outlook. German chemicals giant Bayer lost 19% – on track for its worst day on record – after it aborted a large late-stage trial testing a new anti-clotting drug. Julius Baer Group fell 12% after the Swiss bank warned of a profit decline
amid rising bad-loan provisions. Stoxx 600 -0.1%, DAX -0.4%, CAC +0.1%, FTSE 100 -0.3%. Energy +1%, Retail +0.6%. HealthCare -1.1%, Financial Services -0.7%.

Asia equity markets were mixed, with Hang Seng leading gainers while Japan fell.  Shares in Japan ended lower on profit taking after the Nikkei 225 hit highs last seen in 1990 thanks
to strong earnings and offshore demand which fueled a three-week winning streak. A surge in the yen also dented stocks. The MSCI Asia Pacific Index climbed 0.4%, with heavyweights Tencent and Alibaba bouncing back. Stocks rose in mainland China and South Korea,
while declines were seen in Singapore and Malaysia. Key events this week include earnings reports from China tech firms Baidu, Xiaomi and Kuaishou Technology. Hang Seng Index +1.9%, Kospi +0.9%, Shanghai Composite +0.5%, Thailand +0.25%, CSI 300 +0.2%, Vietnam
+0.2%, ASX 200 +0.1%. Topix -0.8%, Nikkei 225 -0.6%, Philippines and Singapore -0.4%, Sensex -0.2%.            

FIXED INCOME: 
 

Treasuries are cheaper across the curve with yields 3bp to 5bp higher vs Friday’s close ahead of a US 20-year auction. US Treasury prices eased at the start of the
European session as ECB’s Wunsch stated that “markets are optimistic to rule out further rate hikes as bets on rate cuts risk prompting hikes instead”. US 10-year yield is ~4.47%, 2 year yield at 4.90%. Treasury auctions resume with $16b 20-year new issue. 
In Europe, Italian bonds outperform after Moody’s Investors Service late Friday changed its rating outlook to stable from negative.                 

METALS: 
   

Gold declined — after a weekly advance of more than 2% — ahead of a US government bond auction that may impact the precious metal’s trajectory. A deal with Hamas
to release hostages taken during the Oct. 7 attack on Israel may be close and would require a multiday pause in the fighting in Gaza, US Deputy National Security Advisor Jon Finer said Sunday. That could see a further unwinding of gold’s war-risk premium.
Spot gold -0.4%, silver -1.3%.              

ENERGY:  

Crude oil rose for a second straight day ahead of the OPEC+ meeting on Nov. 26 amid reports the cartel may consider more oil output cuts to shore up recently plunging
crude prices. After plummeting almost 25% in six weeks, WTI has backed up about 7% after the Financial Times reported on Friday that Saudi Arabia is planning to prolong its production cut of 1 million barrels a day into next year. Benchmark European gas futures
rose as much as 7% after a vessel seized in the Red Sea by Iran-backed Houthi rebels renewed concerns that the Israel-Hamas war could affect vital waterways for the fuel. WTI and Brent +2.1%, US Nat Gas -2%, RBOB +1.75%.         

CURRENCIES:   

The US dollar index extended losses, falling to its weakest level since September 1, as investors appeared to solidify bets that US interest rates have peaked.  Softening
US debt yields have undermined the greenback but China’s yuan led the way to three-month highs as the central bank there left a key interest rate unchanged and boosted its daily reference rate for the currency to the strongest since August.  Japan’s yen surged
as Tokyo stocks briefly hit their highest in 33 years, while speculation about a tightening of the Bank of Japan’s monetary policy persisted.  US$ Index -0.3%, USDJPY -0.8%, GBPUSD +0.05%, EURUSD +0.1%, AUDUSD +0.5%, NZDUSD +0.5%.

Bitcoin +0.5%, Ethereum +2%.  

TECHNICAL LEVELS: 

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
• Arvinas (ARVN) Raised to Buy at Guggenheim; PT $40
• Boeing (BA) Raised to Buy at Deutsche Bank; PT $270
• Compass Minerals (CMP) Raised to Neutral at JPMorgan; PT $24
• Credicorp (BAP) Raised to Outperform at Grupo Santander; PT $160
• Dorian LPG (LPG) Raised to Buy at Jefferies; PT $50
• Dutch Bros (BROS) Raised to Overweight at JPMorgan; PT $35
• Panasonic (6752 JP) ADRs Raised to Buy at Jefferies; PT $13.70
• Six Flags (SIX) Raised to Buy at Jefferies; PT $32
• Vale (VALE3 BZ) ADRs Raised to Buy at BofA; PT $20
• Downgrades
• Biotricity (BTCY) Cut to Neutral at HC Wainwright
• ChargePoint (CHPT) Cut to Hold at Stifel; PT $3
• Chegg (CHGG) Cut to Underweight at Morgan Stanley; PT $9
• Children’s Place (PLCE) Cut to Neutral at B Riley; PT $19
• Gerdau (GGBR4 BZ) ADRs Cut to Neutral at BofA
• Hive Digital Technologies (HIVE CN) Cut to Neutral at HC Wainwright
• KB Home (KBH) Cut to Neutral at Wedbush; PT $55
• Kingstone Cos (KINS) Cut to Underweight at Piper Sandler; PT $1.75
• Krispy Kreme (DNUT) Cut to Neutral at JPMorgan; PT $13
• LGI Homes (LGIH) Cut to Neutral at Seaport Global Securities
• Morgan Stanley (MS) Cut to Neutral at BNPP Exane; PT $85
• Ryan Specialty (RYAN) Cut to Neutral at Goldman
• Spectrum Brands (SPB) Cut to Equal-Weight at Wells Fargo; PT $73
• Stoke Therapeutics (STOK) Cut to Neutral at JPMorgan; PT $6
• Initiations
• ARM Holdings PLC (ARM) ADRs Rated New Overweight at Wells Fargo
• Cadrenal Therapeutics (CVKD) Rated New Buy at HC Wainwright; PT $3
• Caterpillar (CAT) Rated New Hold at HSBC; PT $250
• Dell Technologies (DELL) Rated New Buy at Melius; PT $95
• Equifax (EFX) Rated New Buy at Citi; PT $243
• Global Payments (GPN) Rated New Buy at BTIG; PT $135
• Harpoon Therapeutics (HARP) Rated New Outperform at Cowen
• ImmunoGen (IMGN) Rated New Neutral at Goldman; PT $17
• Iovance Biotherapeutics (IOVA) Reinstated Buy at Goldman; PT $12
• Kosmos Energy (KOS) Rated New Buy at Stifel; PT $10
• Krystal Biotech (KRYS) Reinstated Buy at Goldman; PT $160
• Mach Natural Resources (MNR) Rated New Strong Buy at Raymond James
• Rated New Buy at Stifel; PT $31
• Netflix (NFLX) Rated New Overweight at Guotai Junan Sec; PT $544
• Tarsus Pharma (TARS) Rated New Neutral at Goldman; PT $19
• Travere Therapeutics Inc (TVTX) Rated New Neutral at Citi; PT $7
• Vital Energy Inc (VTLE) Rated New Buy at Citi; PT $60
• ZipRecruiter (ZIP) Rated New Overweight at Wells Fargo; PT $15

Data sources: Bloomberg, Reuters, CQG