Daily Game Plan

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

TODAY’S ECONOMIC DATA:  8:30ET FHFA House Price Index; 9:45ET MNI Chicago PMI; 10:00ET Conf. Board Consumer Confidence,
JOLTS Job Openings; 10:30ET Dallas Fed Services Activity; 12:00ET Fed’s Goolsbee speaks; 3:00ET Fed’s Barr speaks; 5:10ET Fed’s Bowman speaks

Highlights and News:  

• Trump Admin is Said to be Prioritizing a Quicker Exit From Hostilities With Iran
• Giant oil tanker off Dubai hit by Iranian strike
• Foreign Outflows in Kospi Shares This Month is Largest on Record
• A Japanese oil tanker slipped through the Strait of Hormuz in the dead of night
• First Spain and Italy, now France is also preventing US military movement in its airspace
• HEGSETH: IF IRAN ISN’T WILLING TO MAKE DEAL, US WILL CONTINUE WITH MORE INTENSITY
  
• APELLIS PHARMA SHARES SOAR 140% AFTER BIOGEN TO ACQUIRE FIRM
• LILLY TO BUY CENTESSA PHARMACEUTICALS FOR $38/SHR PLUS CVR

Global stocks rose as sentiment improved after the Trump administration is said to be prioritizing a quicker exit from major hostilities with Iran while still pursuing
other goals. The Wall Street Journal first reported that President Trump and his team assessed that a full military operation to reopen the strait would likely extend the conflict beyond the administration’s preferred 4-to-6-week timeline. As a result, the
focus has shifted toward degrading Iran’s naval capabilities, missile stockpiles, and offensive infrastructure, then winding down major operations while leaving any complex reopening effort for a later date or to allies/diplomatic pressure. This is based on
anonymous administration officials speaking to the WSJ, so it reflects internal discussions rather than a formal public announcement. The reporting has been consistent across major outlets and is influencing market sentiment positively. Meanwhile, Tehran approved
legislation to impose fees on vessels transiting the Strait of Hormuz and is pushing the Houthi militant group in Yemen to prepare for a renewed campaign against shipping in the Red Sea.

EQUITIES: 

US equity futures rose while oil swung between gains and losses after the Wall Street Journal reported that President Trump had signaled he was willing to end the US military campaign
against Iran. While the report lifted optimism for an imminent end to hostilities, the status of the strait remains unresolved. Equities are poised for a strong rebound as positive developments in the war emerge, following large-scale unwinding of risk positions
by hedge funds and CTAs. With higher gas prices adding near-term pressure on household budgets, today’s consumer confidence print will be closely watched. In corporate news, Unilever said talks to sell most of its food business to McCormick are advanced and
a final deal could be announced later today. The deal may include a $15.7 billion upfront cash component and McCormick shares. Biogen will buy Apellis for $5.6 billion to expand its treatments in immunology and rare diseases. Lilly agreed to buy Centessa in
a deal worth up to $7.8 billion.

Futures ahead of the bell: E-Mini S&P +1.2%, Nasdaq +1.2%, Russell 2000 +1.3%, DJI +1.2%

In pre-market trading, Apellis Pharmaceuticals (APLS) soars 138% after Biogen agreed to acquire the company for $5.6 billion. Centessa Pharmaceuticals (CNTA) rises
48% after Eli Lilly & Co. agreed to buy the sleep drug maker in a deal worth up to $7.8 billion. FactSet Research Systems (FDS) gains 6% after the financial data company boosted its adjusted earnings-per-share forecast for the full year. McCormick (MKC) rises
1.8% after Unilever said talks to sell most of its food business to the maker of spices are advanced. McCormick reported earnings today and made no mention of the Unilever deal. PepGen (PEPG) plunges 44% after the biotech gave clinical data from a mid-stage
trial of its drug candidate for a type of muscle disease. Phreesia (PHR) shares tumble as much as 27% after the healthcare software company lowered its full-year revenue forecast far below the analyst consensus. Analysts say the data is mixed. Scholar Rock
(SRRK) rises 11% after the company resubmitted its biologics license application for apitegromab, a muscle-targeted therapy for children and adults with spinal muscular atrophy. T1 Energy (TE) falls 17% after the solar equipment manufacturer reported a wider
than expected fourth-quarter loss. WeRide ADRs (WRD) rally 7% after Uber disclosed ownership of about 56.6 million shares of the company.
Marvell Technology (MRVL) shares are up 9% on news that Nvidia has invested $2 billion in the chipmaker as part of a strategic partnership to connect Marvell to the Nvidia AI factory and AI-RAN ecosystem through NVLink Fusion.

Microsoft is on track to trail the S&P 500 Index for an eighth consecutive month, the longest streak of underperformance ever.

European gauges are higher, with mining and financial services stocks leading gains. The war’s impact on prices is beginning to show in economic data. Eurozone inflation
shot past the ECB’s 2% target this month due to soaring oil and gas prices. Consumer prices rose 2.5% from a year ago in March – up from 1.9% the previous month. The surge creates a difficult dilemma for policymakers, as high energy costs slow growth while
risking a persistent inflation spiral. In corporate news, Unilever confirmed discussions to sell most of its food business to McCormick. Among individual movers, 4iG shares surge 16% after the Hungarian telecommunications and defense group says it is selling
its 49% stake in Hirtenberger Defence to Czech peer CSG. Raspberry Pi Holdings, a British maker of low-cost computers, soars 35% after reporting a jump in sales and forecasting revenue well above market expectations. Inventiva shares sink as much as 20% after
the French biopharmaceutical company said it expected topline results of its late-stage clinical trial evaluating lanifibranor. Stoxx 600 +0.9%, DAX +0.9%, CAC +0.7%, FTSE 100 +1%. Basic Resources +1.9%, Financial Services +1.8%, Defense +1.6%, Banks +1.4%.

Shares in Asia were mostly lower, with investors pulling back from riskier bets as tensions in the Middle East continued to escalate. The MSCI Asia Pacific Index dropped
1.4%, taking this month’s decline to more than 13%, its worst showing since October 2008. A slump in chipmakers fueled stock losses after Monday’s rout in US-listed peers. South Korea’s Kospi index slid more than 4%, extending its drop from a February high
to ~20%. SK Hynix slumped more than 7%. Foreigners sold a net $23.5 billion in KOSPI shares this month, exchange data shows, the largest outflow on record. Analysis from Goldman Sachs shows foreign selling has been heaviest in market-darling chipmakers Samsung
Electronics and SK Hynix, driving foreign ownership in the pair to ⁠its
lowest since 2022. Indian markets were closed for a holiday. Kospi -4.25%, Taiwan -2.45%, Nikkei 225 -1.6%, CSI 300 -0.9%, Indonesia -0.6%, Singapore -0.25%, Thailand -0.1%. Hang Seng Index +0.15%, ASX 200 +0.25%, Vietnam +0.7%, Philippines +1.3%.

FIXED INCOME: 
 

Treasuries extended a rebound, with the 10-year yield dropping about four basis points to 4.30%. US session features several economic data points led by consumer
confidence and JOLTS job openings, while Treasuries may receive support from month-end index rebalancing. The curve is mixed with 2s10s -0.15bps while 5s30s +0.15bps. IG dollar issuance slate empty so far and expected to be muted throughout the week.

METALS: 

Gold extended two days of gains on a report that President Trump is willing to end the war with Iran even if the Strait of Hormuz remains closed. Bullion jumped as
much as 2.4% before paring some gains to trade near $4,580 an ounce. Silver is near the highs of the day, up over 4%. Fed Chair Jerome Powell said long-term US inflation expectations appeared to be in check, despite the war-driven spike in oil prices that
stoked inflationary pressures and rate-hike bets. Traders were also assessing mixed signals from the US, as the White House threatened to escalate strikes on Iran, including on critical civilian infrastructure. Spot gold +1.7%, Silver +4.5%, Copper futures
+0.5%. 

ENERGY:   

Oil prices are mixed in choppy trading at the end of a volatile month, buffeted by another tanker attack and a report that President Trump is willing to wind down
hostilities and pressure Tehran diplomatically to reopen the Strait of Hormuz. Signs that Trump may be more open to de-escalation could ease concerns over his threats to strike Iranian energy infrastructure. However, this approach would likely leave Tehran
in control of the strategically vital Strait of Hormuz. Meanwhile, Iran launched a drone strike on a fully laden Kuwaiti oil tanker anchored off Dubai, sparking a fire on board. The US said it will blow up power plants, oil facilities and “possibly” desalination
infrastructure if Iran doesn’t re-open Hormuz. A Japanese oil tanker slipped through the Strait of Hormuz in the dead of night, radio silenced to conceal its position. Trump called on the UK and other countries that “can’t get jet fuel because of the Strait”
to buy from the US or go to the Strait and “just TAKE IT.” Retail unleaded pump prices in the US climbed above $4 a gallon, the highest since August 2022. WTI -0.1%, June Brent -0.6%, US Nat Gas -1.9%, RBOB -0.2%.

CURRENCIES: 

In currency markets, the dollar is mixed against major peers as traders weighed prospects for an end to the Iran war, while quarter-end flows muddied the short-term
outlook. Overall, the mood in forex is one of cautious optimism on de-escalation hopes. The yen nudges higher where renewed threats of intervention from Tokyo have traders wary of selling the yen too far past 160 per dollar. The Korean won
⁠slumped around 1% to trade weaker than 1,500 to the dollar – levels previously broached
only in the aftermath of the global financial crisis in 2009 and the late 1990s Asian crisis. US$ Index -0.1%, GBPUSD +0.35%, EURUSD +0.2%, USDJPY -0.2%, AUDUSD +0.45%, NZDUSD +0.1%, USDCHF -0.05%, USDCAD +0.05%, USDSEK -0.2%, USDNOK +0.1%.

Spot Bitcoin ~flat, Spot Ethereum +0.8%. 

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
• 10X Genomics (TXG) Raised to Outperform at William Blair
• Highwoods (HIW) Raised to Equal-Weight at Morgan Stanley; PT $23
• Lycos Energy Inc (LCX CN) Raised to Sector Outperform at Peters & Co
• Nubank (NU) Raised to Buy at XP Investimentos; PT $21
• Perimeter Solutions (PRM) Raised to Buy at UBS
• Downgrades
• Colgate-Palmolive (CL) Cut to Hold at TD Cowen; PT $85
• Docusign (DOCU) Cut to Underperform at BofA; PT $52
• Givaudan (GIVN SW) ADRs Cut to Hold at Berenberg; PT $73.50
• Humacyte (HUMA) Cut to Speculative Buy at Benchmark; PT $1
• Lincoln Electric (LECO) Cut to Hold at Jefferies
• Phreesia (PHR) Cut to Neutral at Baird; PT $10
• Cut to Hold at Truist Secs; PT $11
• Cut to Neutral at Citi; PT $10
• Cut to Neutral at JPMorgan; PT $16
• Rockwell Automation (ROK) Cut to Hold at Jefferies
• Terns (TERN) Cut to Hold at Truist Secs; PT $53
• Vertiv Holdings (VRT) Cut to Hold at Jefferies
• Initiations
• AGT Food & Ingredients (AGTF CN) Rated New Sector Perform at Scotiabank
• Rated New Outperform at Raymond James
• American Tower (AMT) Reinstated Buy at Truist Secs; PT $205
• Arista Networks (ANET) Reinstated Buy at Truist Secs; PT $161
• Block (XYZ) Rated New Buy at Loop Capital; PT $75
• Bridger Aerospace Group (BAER) Rated New Buy at Stifel; PT $3.35
• Cantor Equity Partners II (CEPT) Rated New Buy at Benchmark; PT $16
• Cisco (CSCO) Reinstated Buy at Truist Secs; PT $94
• Corning (GLW) Rated New Hold at Truist Secs; PT $125
• Crown Castle (CCI) Reinstated Hold at Truist Secs; PT $90
• Daimler Truck (DTG GR) ADRs Rated New Outperform at BNP Paribas; PT $31
• Dell Technologies (DELL) Rated New Hold at Truist Secs; PT $170
• Envoy Medical (COCH) Rated New Buy at HC Wainwright; PT $2.50
• Equity LifeStyle (ELS) Rated New Outperform at Mizuho Securities
• Fiserv (FISV) Reinstated Hold at Loop Capital; PT $62
• General Electric Aerospace (GE) Reinstated Neutral at Daiwa; PT $301
• HeartBeam (BEAT) Rated New Buy at B Riley; PT $4
• HP Enterprise (HPE) Rated New Buy at Truist Secs; PT $31
• Ingram Micro (INGM) Rated New Hold at Truist Secs; PT $25
• Jack Henry (JKHY) Rated New Buy at Loop Capital; PT $197
• Keysight (KEYS) Rated New Hold at Truist Secs; PT $310
• Mastercard (MA) Reinstated Buy at Loop Capital; PT $631
• MiniMed Group (MMED) Rated New Outperform at William Blair
• Rated New Buy at Goldman; PT $24
• Rated New Overweight at Barclays; PT $26
• Rated New Buy at BTIG; PT $25
• Rated New Outperform at Mizuho Securities; PT $21
• Rated New Overweight at Morgan Stanley; PT $19
• Rated New Buy at Citi; PT $23
• Rated New Overweight at Wells Fargo; PT $26
• Rated New Neutral at Piper Sandler; PT $16
• Motorola Solutions (MSI) Rated New Buy at Truist Secs; PT $540
• NexMetals Mining Corp (NEXM CN) Rated New Outperform at Raymond James
• NiSource (NI) Reinstated Overweight at KeyBanc; PT $52
• Nvidia (NVDA) Rated New Add at Caitong Securities
• Paccar (PCAR) Reinstated Neutral at BNP Paribas; PT $126
• Passage Bio (PASG) Rated New Outperform at Oppenheimer
• PayPal (PYPL) Reinstated Hold at Loop Capital; PT $46
• SBA Comms (SBAC) Reinstated Hold at Truist Secs; PT $193
• SoftBank (9984 JP) ADRs Rated New Hold at TD Cowen; PT $13
• Sun Communities (SUI) Rated New Outperform at Mizuho Securities
• Terex (TEX) Reinstated Overweight at Barclays; PT $65
• Toast (TOST) Rated New Hold at Loop Capital; PT $26
• Versant Media (VSNT) Rated New Buy at Seaport Global Securities; PT $45
• Versigent (VGNT-W) Rated New Sector Perform at RBC; PT $28
• Visa (V) Reinstated Buy at Loop Capital; PT $387
• Volvo (VOLVB SS) ADRs Rated New Neutral at BNP Paribas; PT $32

Data sources: Bloomberg, Reuters, CQG

David Wienke