Daily Game Plan

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

DATA/HEADLINES   11:00ET NY Fed 1-Yr Inflation Expectations; 11:30ET 3 Year Note Auction; 1:00ET 10 Year Note Auction

Tuesday: Japan producer prices, India inflation, Brazil inflation, UK unemployment, US inflation

TODAY’S HIGHLIGHTS:  

• Zelenskiy travels to the US to discuss Ukraine’s urgent defense needs with President Biden and congressional
  leaders

Global equities posted modest moves at the start of a busy week of economic data and central bank meetings that will test optimism among investors that interest rates
will soon head lower. The BOJ signaled no need for a December policy shift, setting the scene for more potential pushback from central banks this week. Officials in Japan are yet to see enough evidence on wage growth to warrant a change. Market attention now
turns to the US inflation data tomorrow and policy meetings by the Federal Reserve, the European Central Bank and the Bank of England later this week.                                            

EQUITIES: 
 

US equity futures are slightly lower as investors braced for a heavy week of economic data with consumer prices index and producer prices index prints due before
the Fed decides on rates on Wednesday. The SPX had advanced for a sixth straight week to finish at its highest level since March 2022 — its longest such streak since 2019. Traders are looking ahead to US inflation figures on Tuesday, a Federal Reserve policy
decision Wednesday and retail sales numbers Thursday. The S&P 500 will reach a record high in 2024, but a weaker consumer may weigh on the rally, according to the latest MLIV Pulse Survey.  In corporate news, Occidental has signed a $12 billion cash-and-stock
deal to acquire the oil and gas producer CrownRock.               

Futures ahead of the bell: E-Mini S&P flat, Nasdaq -0.1%, Russell 2000 +0.2%, Dow +0.05%.

In premarket trading, Macy’s (M) jumped 22% after it was said to receive a $5.8 billion buyout offer from Arkhouse Management and Brigade Capital Management. Cigna (CI) shares jumped
over 30% on plans to add $10 billion to its stock buyback after abandoning merger talks with Humana.  Snap (SNAP) rose over 5% after being upgraded to overweight from equal-weight at Wells Fargo. Pinterest (PINS) gained more than 3% after being raised to outperform
from sector perform at RBC Capital Markets. Affimed (AFMD) falls 13% after the drug developer said it is discontinuing enrollment in two trial cohorts for its drug, AFM24-102. Biomea Fusion (BMEA) slumps 13% after reporting topline updates from a dosing cohort
of a mid-stage trial for its drug in the treatment of patients with type 2 diabetes. DoorDash (DASH) rises 2.3% and MongoDB (MDB) rises 1.3% as the stocks are set to be added to the Nasdaq 100 Index, among other names. Sea ADRs (SE) slump as much as 12%, after
ByteDance’s TikTok agreed to combine its Indonesian e-commerce business with GoTo’s Tokopedia and take control of the merged operation. Oracle reports after the close.

European gauges fluctuated after pulling back from their highest since February 2022 in a week loaded with central bank meetings and key economic updates. The Stoxx Europe 600 index is
flat, with mining stocks declining as iron ore was weighed down by disappointing data from China. Industrial goods and construction stocks outperformed. Among individual movers, Vivendi SE ticked higher as a media report said Anschutz Entertainment Group and
CTS Eventim had entered the race to buy See Tickets from the company. The outlook for European stocks in 2024 is improving, with Goldman Sachs strategists becoming the latest to predict a record high for the Stoxx 600. The BOE will make its first rate cut
in August, with the pace of reductions coming faster than previously forecast, Goldman analysts said. DAX ~flat, CAC +0.3%, FTSE 100 -0.5%. Media +0.4%, Construction +0.4%, Industrials +0.4%. Basic Resources -0.6%, Utilities -0.7%.

Asian shares were mixed as disappointing data from China over the weekend deepened concerns about its economy. The MSCI Asia Pacific Index was down 0.1%, while mainland China staged a
rebound on speculation of state-related funds buying.  China’s blue-chip CSI 300 reversed an early loss of 1.6% to finish higher by 0.6%. The recovery masked the still-weak sentiment for the country’s equities, which was exacerbated by worse-than-expected
inflation data over the weekend and some disappointment over a Politburo meeting. China’s consumer prices fell at the steepest pace in three years while producer costs dropped even further into negative territory. Meanwhile, Japanese equities rallied, helped
by weakness in the yen. Tech-heavy markets of Korea and Taiwan gained on continued enthusiasm for AI-related stocks. Topix +1.5%, Shanghai Composite +0.75%, Kospi +0.3%, Taiwan +0.2%, Sensex +0.15%, ASX 200 +0.05%. Indonesia -1%, Hang Seng Index -0.8%, Singapore
-0.6%.  

FIXED INCOME: 
 

US Treasury yields rose overnight with 10yr yield rising ~4bps ahead of US Treasury supply.  Today’s focus will be the demand for US 3yr (11:30am) and 10yr (1pm)
note auctions and then 30yr bond supply tomorrow.  Other major risk events this week include November CPI data earlier Tuesday, Fed rate decision Wednesday and ECB policy announcement Thursday. 10 year yield 4.276%, 2 year yield 4.768%, curve steadied.

METALS: 
   

Gold extended a decline to a two-week low as a hotter-than-expected US jobs report reduced hopes of US interest-rate cuts early next year.  Bullion dropped more than
1% on Friday after the data, which spurred a jump in Treasury yields.  Investors will be closely watching US inflation data due Tuesday.  Central bank officials will also release their latest set of economic projections, which will likely reflect inflation
cooling faster than previously estimated. Spot gold -0.5%, silver -0.2%.         

ENERGY:  

Crude oil prices steadied after concerns that supplies are overtaking demand triggered the longest weekly losing streak in five years. Both WTI and Brent jumped more
than 2% on Friday but were down for a seventh straight week. The US Department of Energy on Friday said it wants to buy up to 3 million barrels of crude oil for the Strategic Petroleum Reserve for delivery in March 2024, as it takes advantage of lower prices
to start to replenish the stockpile. The Biden administration last year conducted the largest sale on record from the SPR of 180 million barrels at an average of about $95 a barrel. This week, monthly reports from OPEC, the IEA and the EIA may provide some
clarity on supply and demand fundamentals. WTI -0.1%, Brent +0.02%, US Nat Gas -7.4%, RBOB +0.1%.

CURRENCIES:   

In currencies, the yen extended its losses to 1% after Bloomberg News reported that Bank of Japan officials see little need to rush into scrapping the world’s last
negative interest rate, citing insufficient evidence of wage growth feeding inflation. Most currencies are moving in tight ranges as traders looked ahead to an event-packed week that features US inflation data and the Federal Reserve’s final meeting of the
year. The Aussie$ slipped as China’s consumer prices fell 0.5% in November from a year earlier, the most in three years, while producer costs declined 3%. Both slipped by more than expected. US$ Index +0.1%, USDJPY +1%, AUDUSD -0.3%, GBPUSD +0.2%, EURUSD -0.05%,
USDNOK +0.5%.  

Bitcoin -3.4%, Ethereum %.  Bitcoin had a brief but sharp tumble toward $40,000 amid a broader crypto selloff, sinking as much as 7.5% to $40,521 before paring some
of the losses.   

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
• AbbVie (ABBV) Raised to Buy at Goldman; PT $173
• Avantor (AVTR) Raised to Outperform at Cowen; PT $28
• Best Buy (BBY) Raised to Buy at Jefferies; PT $89
• Cigna (CI) Raised to Buy at Jefferies; PT $341
• Devon (DVN) Raised to Overweight at Morgan Stanley; PT $52
• Diana Shipping (DSX) Raised to Hold at Cleaves Securities; PT $2.80
• Dlocal (DLO) Raised to Equal-Weight at Barclays; PT $18
• Domino’s Pizza (DPZ) Raised to Buy at Benchmark; PT $455
• Eagle Bulk (EGLE) Raised to Buy at Cleaves Securities; PT $57
• Equitable Holdings (EQH) Raised to Buy at Jefferies; PT $37
• Fortrea (FTRE) Raised to Buy at Citi; PT $40
• HP Inc (HPQ) Raised to Outperform at Evercore ISI; PT $40
• Illumina (ILMN) Raised to Neutral at Citi; PT $120
• JB Hunt (JBHT) Raised to Outperform at BMO; PT $220
• Lennox (LII) Raised to Overweight at Stephens; PT $550
• Netstreit (NTST) Raised to Buy at Mizuho Securities; PT $18
• Nike (NKE) Raised to Buy at Citi; PT $135
• Occidental (OXY) Raised to Overweight at Morgan Stanley; PT $68
• Pinterest (PINS) Raised to Outperform at RBC; PT $46
• Portland General (POR) Raised to Overweight at Barclays; PT $47
• Realty Income (O) Raised to Buy at Mizuho Securities; PT $58
• Regal Rexnord (RRX) Raised to Outperform at Wolfe; PT $151
• Reinsurance Group (RGA) Raised to Buy at Jefferies; PT $189
• Snap (SNAP) Raised to Overweight at Wells Fargo; PT $22
• Downgrades
• Agree Realty (ADC) Cut to Neutral at Mizuho Securities; PT $61
• Align Technology (ALGN) Cut to Sell at Goldman
• Conagra (CAG) Cut to Inline at Evercore ISI; PT $32
• Crispr Therapeutics (CRSP) Cut to Underperform at Cowen; PT $30
• Domino’s Pizza (DPZ) Cut to Neutral at Piper Sandler; PT $400
• Envista Holdings (NVST) Cut to Sell at Goldman; PT $22
• EOG Resources (EOG) Cut to Equal-Weight at Morgan Stanley; PT $134
• Equity Residential (EQR) Cut to Neutral at Mizuho Securities; PT $58
• Gaming and Leisure (GLPI) Cut to Neutral at Mizuho Securities; PT $47
• HireRight Holdings (HRT) Cut to Market Perform at William Blair
• Huntsman (HUN) Cut to Equal-Weight at Morgan Stanley; PT $28
• JinkoSolar (JKS) ADRs Cut to Hold at BOC Intl; PT $32
• Marathon Oil (MRO) Cut to Equal-Weight at Morgan Stanley; PT $25
• Mettler-Toledo (MTD) Cut to Sell at Citi; PT $975
• Orla Mining (OLA CN) Cut to Hold at TD; PT C$4.50
• Parker-Hannifin (PH) Cut to Peerperform at Wolfe
• QuidelOrtho (QDEL) Cut to Neutral at Citi; PT $72
• Sea Ltd (SE) ADRs Cut to Hold at DBS Bank; PT $42
• Super Micro Computer (SMCI) Cut to Negative at Susquehanna; PT $160
• Wingstop (WING) Cut to Hold at Benchmark
• Initiations
• American Air (AAL) Rated New Buy at Fubon; PT $17.35
• Broadcom (AVGO) Resumed Buy at Citi; PT $1,100
• Ferrari (RACE) Rated New Sell at Pekao Investment Banking; PT $291.81
• Humacyte (HUMA) Rated New Buy at HC Wainwright; PT $6
• Intra-Cellular (ITCI) Rated New Outperform at Cowen; PT $75
• Kodiak Sciences (KOD) Reinstated Sell at Goldman; PT $2
• Landstar (LSTR) Rated New Neutral at JPMorgan; PT $186
• Lithium Americas (LAC CN) Rated New Neutral at JPMorgan; PT C$10
• Ondas (ONDS) Rated New Buy at Ladenburg Thalmann; PT $3.50
• Piedmont Lithium (PLL) Rated New Neutral at JPMorgan; PT $25
• Shimmick (SHIM) Rated New Buy at Roth MKM; PT $10
• Spyre Therapeutics Inc (SYRE) Rated New Buy at Guggenheim; PT $44
• Rated New Buy at Jefferies; PT $31
• Stellantis (STLA) Rated New Underweight at Wells Fargo; PT $19.40

Data sources: Bloomberg, Reuters, CQG