Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET CPI, Real Avg Hourly Earnings,
Fed’s Bowman speaks; 1:00ET 10-Year Note Auction; 2:00ET Federal Budget Balance

Highlights and News:  

• IEA is proposing the largest-ever reserve release in its history
• JAPAN TO RELEASE OIL RESERVES: GERMANY TO PARTIALLY RELEASE OIL RESERVES
• EU TO DISCUSS RESERVE RELEASE AT THURSDAY MEETING
• IRAN SAYS STRIKES TO BE CONTINUOUS FROM NOW ON: FARS
• Iran’s Revolutionary Guard Says They Fired at Thai-Flagged Vessel in the Strait of Hormuz
• Iran Official Says Supreme Leader Mojtaba Khamenei was Lightly Injured
• Somaliland’s minister of the presidency says will have a strategic security partnership with Israel
• Bam Adebayo scores 83 points, second-most points in NBA history; he also had record 43 free throws
• Ravens backed out of trade agreement for Maxx Crosby due to medical concerns
  

Global stock markets are showing mixed performance, influenced by ongoing geopolitical tensions from the Iran conflict, including recent shipping attacks in the Gulf.
The conflict between the US, Israel, and Iran showed little sign of abating, with Iran staging more strikes and the US and Israel continuing to hit targets in the Islamic Republic. Meanwhile, Israel is discreetly laying plans for a strategic military base
near the entrance to the Red Sea, enabling direct operations against Yemen’s Houthis. Following an overnight airstrike on an administrative building tied to Bank Sepah—one of Iran’s major state-owned banks with military connections – Iran said it will target
economic and banking interests linked to the US and Israel in the region. The International Energy Agency is considering a release of emergency oil reserves that would be the largest-ever in its history. The proposal is in the range of about 300 million to
400 million barrels, dwarfing the 182 million barrels member countries released in 2022, after Russia invaded Ukraine.

EQUITIES: 

US equity futures ease from overnight highs made after Oracle’s earnings offered support to the AI trade, while inflation is back in focus with today’s CPI print. Oracle’s latest quarterly
earnings provided a solid boost to the AI narrative, with strong cloud infrastructure growth (IaaS up 84% to $4.9 billion) and overall cloud revenue surging 44% to $8.9 billion, beating expectations and driving positive market reaction including a 10% jump
in ORCL shares. JPMorgan is reportedly tightening lending to certain private credit funds after proactively marking down the value of specific loans in their portfolios—particularly those tied to software companies vulnerable to AI disruption, marking the
latest indicator of mounting stress in the roughly $1.8 trillion private credit sector.

Futures ahead of the bell: E-Mini S&P -0.15%, Nasdaq -0.1%, Russell 2000 -0.5%, DJI -0.3%

In pre-market trading, Tesla (TSLA) rises 0.2% after Business Insider reported that the company is ramping up an AI agent project. AeroVironment
(AVAV) falls 10% after the drone maker cut its revenue guidance for the full year. Campbell’s Co. (CPB) falls 5% after the food company cut its adjusted earnings per share guidance for the full year. Domo (DOMO) rises 38% after the enterprise software company’s
fourth-quarter results beat expectations. Nike (NKE) gains 2% after Barclays upgraded the sportswear retailer to overweight. Oracle (ORCL) rises 9% after the company posted strong results and gave an outlook that suggested there is little letup in demand for
AI computing. Serve Robotics Inc. (SERV) climbs 12% after the developer of AI-powered delivery robots posted fourth quarter results. Also, the company and White Castle launched a delivery pact via Uber Eats. UniFirst Corp. (UNF) rises 8% after Cintas Corp.
agreed to buy the uniform maker in a cash-and-stock deal valued at $5.5 billion Upstart (UPST) rises 2% as the firm plans to apply for a US national bank charter, aiming to reduce costs and streamline its AI-based lending platform.

European gauges are lower as uncertainty about the inflationary impact of war in Iran weighed on sentiment after a European Central Bank official
warned that a rate hike may be closer than thought. Inflation expectations are building in international markets with European assets facing challenges because cost pressures concerns have soared rapidly, according to Governing Council member Peter Kazimir.
Among individual names, Balfour Beatty shares surge as much 13% to a record high after the construction group announced better profits and a larger buyback than expected. Inditex gained as much as 5.2% after the Zara parent reported strong results. Avolta
shares climb as much as 4.6% after the travel retailer reported solid results. Wacker Chemie shares rise as much as 10% after the German chemicals firm posted better-than-expected guidance. CVC Capital shares fall over 7% as the private equity and investment
advisory company cuts guidance. Legal & General shares fall over 6% as the insurer and asset manager’s solvency ratio proves lower than expected. Rheinmetall shares fall ~6% after the German defense company’s sales outlook fell short of analyst expectations.
Stoxx 600 -0.9%, DAX -1.4%, CAC -0.8%, FTSE 100 -0.9%. Defense -2.8%, Industrial Goods -1.9%, Real Estate -1.4%, Financial Services -1.4%, Basic Resources -1.3%. Retail +0.7%, Energy +0.5%.

Shares in Asia were mostly higher, with the MSCI Asia Pacific Index gaining nearly 1%, adding to Tuesday’s 3.2% advance. Shares of chip giants such as TSMC, Samsung
and SK Hynix were among the biggest contributors to the rally after better-than-expected earnings from Oracle. Japanese bank shares reversed gains after the Financial Times reported that JPMorgan marked down some private credit assets, reviving market jitters
around credit risks. Chinese energy storage stocks, including lithium makers, extended rally after CATL’s strong earnings. The Chinese government moved to curb the usage of OpenClaw for banks and state agencies amid a user rush to adopt the AI agent. Shares
in India underperformed regional peers, with the benchmark index dropping to its lowest level in 11 months, weighed down by sustained selling in private lenders. Taiwan +4.1%, Vietnam +3.1%, Nikkei 225 +1.4%, Kospi +1.4%, CSI 300 +0.6%, ASX 200 +0.6%, Philippines
+0.5%, Thailand +0.1%. Hang Seng Index -0.25%, Indonesia -0.7%, Sensex -1.7%.

FIXED INCOME: 
 

US treasury yields are a bit higher with the curve +1bp. European bond markets slide as traders price in a more hawkish ECB policy path on higher inflation expectations.
Amazon is making its debut in the euro bond market with a record eight-part sale, with maturities ranging from two to 38 years, following the 11-part dollar sale on Tuesday to fund AI investments. Focal points of US session include February CPI report and
$39 billion 10-year auction. Corporate new-issue slate may include Salesforce with a jumbo offering following Tuesday’s single-day volume record. 10-year is near 4.18%, higher by ~2bps.  Treasury’s $39 billion 10-year note reopening follows soft demand for
Tuesday’s 3-year new-issue auction, which tailed by 1.1bp.

METALS: 

Gold hovers below $5,200 an ounce while silver drops over 2% as traders tracked the war in the Middle East and assessed news that the International Energy Agency
may undertake the largest-ever release of oil reserves. Gold’s “muted reaction” to the Iran conflict has been “largely overshadowed by a strong USD and rising yields,” analysts at BMO Capital Markets wrote in a note. Spot gold -0.2%, Silver -2.4%, Copper futures
-1.6%. 

ENERGY:   

Oil prices rallied in a volatile trading session as traders weighed growing disruptions to Middle East supplies and the prospects of a major coordinated emergency
release from strategic reserves by rich nations. The International Energy Agency is proposing the largest-ever reserve release in its history. The potential 400 million barrels would cover days of global demand. Britain’s UKMTO agency confirmed three merchant
ships sustained hits from presumed projectiles across the Strait of Hormuz and Persian Gulf today, reinforcing the severe ongoing risks to international commerce from the war. This latest wave of attacks follows Iran’s threats to disrupt Gulf shipping routes
in response to US-Israeli operations, with traffic through the Strait of Hormuz already severely curtailed or halted for most non-Iranian vessels. WTI +4.1%, Brent +3.9%, US Nat Gas +2.8%, RBOB +3.7%.

CURRENCIES: 

In currency markets, the dollar rebounded as fears of escalation in the Middle East war kept risk appetite in check and prompted traders to seek refuge in the safe-haven
currency. The euro reverses early gain made after Governing Council member Peter Kazimir said the Iran war and its impact on inflation risk forcing the ECB to raise interest rates sooner than anticipated. Aussie$ tops G-10 leaderboard after several bank strategists
bring forward their RBA hike forecasts. Westpac, NAB, and UBS are predicting the RBA will raise rates by 25bps at its policy meeting next week. US$ Index +0.2%, GBPUSD +0.1%, EURUSD -0.1%, USDJPY +0.2%, AUDUSD +0.6%, NZDUSD -0.1%, USDCHF -0.05%, USDCAD -0.1%,
USDSEK +0.15%, USDNOK -0.2%.

Spot Bitcoin -1%, Spot Ethereum -0.9%. 

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
• Apyx Medical Corp (APYX) Raised to Buy at BTIG; PT $6
• Arthur J Gallagher (AJG) Raised to Overweight at Barclays
• Cemex (CEMEXCPO MM) ADRs Raised to Sector Outperform at Scotiabank; PT $13.90
• CrowdStrike (CRWD) Raised to Buy at DZ Bank; PT $490
• Inmune Bio (INMB) Raised to Buy at Lucid Capital Markets; PT $9
• Intuitive Surgical (ISRG) Raised to Buy at Citi; PT $590
• J M Smucker (SJM) Raised to Outperform at Bernstein; PT $145
• Maple Leaf Foods (MFI CN) Raised to Sector Outperform at Scotiabank
• Nike (NKE) Raised to Overweight at Barclays; PT $73
• NIO Inc. (NIO) ADRs Raised to Buy at Nomura
• Oracle (ORCL) Raised to Overweight at JPMorgan; PT $210
• uniQure (QURE) Raised to Outperform at Mizuho Securities
• Vtex (VTEX) Raised to Outperform at Bradesco BBI; PT $5
• Willis Towers (WTW) Raised to Equal-Weight at Barclays
• Downgrades
• Borr Drilling (BORR) Cut to Hold at SEB Equities; PT $5.45
• CES Energy (CEU CN) Cut to Market Perform at BMO; PT C$20
• Day One Biopharma (DAWN) Cut to Neutral at JPMorgan; PT $21.50
• Dorian LPG (LPG) Cut to Sell at DNB Carnegie; PT $26.50
• Goeasy (GSY CN) Cut to Underperform at RBC; PT C$52
• Cut to Hold at Jefferies; PT C$50
• Cut to Sector Perform at National Bank; PT C$50
• Optimum Communications I (OPTU) Cut to Market Perform at Raymond James
• VICI Properties (VICI) Cut to Neutral at Mizuho Securities; PT $30
• Yext Inc. (YEXT) Cut to Neutral at Roth Capital Partners; PT $6
• Initiations
• Alliant Energy (LNT) Rated New Outperform at RBC; PT $82
• Alumis (ALMS) Rated New Strong Buy at Raymond James; PT $46
• Anteris Technologies Global (AVR) Rated New Overweight at Wells Fargo
• Atrium Therapeutics (RNA) Rated New Overweight at Wells Fargo; PT $25
• BRP Inc. (DOO CN) Reinstated Overweight at Wells Fargo; PT C$105
• Climb Bio Inc (CLYM) Rated New Strong Buy at Raymond James; PT $25
• Franklin Financial Services (FRAF) Rated New Outperform at Hovde Group
• Harley-Davidson (HOG) Rated New Underweight at Wells Fargo
• Hasbro (HAS) Reinstated Equal-Weight at Wells Fargo; PT $98
• Life Time (LTH) Reinstated Overweight at Wells Fargo; PT $37
• Mattel (MAT) Reinstated Overweight at Wells Fargo; PT $19
• Nova (NVMI) Rated New Overweight at Barclays; PT $465
• Ocugen (OCGN) Rated New Outperform at Oppenheimer; PT $10
• Planet Fitness (PLNT) Rated New Overweight at Wells Fargo; PT $90
• Polaris (PII) Reinstated Equal-Weight at Wells Fargo; PT $52
• Satellos Bioscience Inc (MSCL CN) Rated New Overweight at Cantor
• Sunbelt Rentals (SUNB) Rated New Hold at Jefferies; PT $74
• United Utilities (UU/ LN) ADRs Reinstated Outperform at BNP Paribas
• Vail Resorts (MTN) Reinstated Equal-Weight at Wells Fargo; PT $135

Data sources: Bloomberg, Reuters, CQG

David Wienke