Daily Game Plan

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

DATA/HEADLINES   8:30ET Empire Manufacturing, Fed’s Williams speaks; 9:15ET Industrial Production, Capacity Utilization,
Manufacturing Production; 9:45ET S&P Global US Manufacturing and Services PMIs

TODAY’S HIGHLIGHTS:  

• Detroit Pistons are on pace to be the worst NBA team of all time
• Global coal use at all-time high in 2023 – IEA
• An After School Satan Club will go ahead despite opposition from education leaders in Tennessee
• Cold wave freezes most of China, shutting highways
  

Global markets continued to rise, with MSCI’s world share index set for a seventh straight winning week, its longest run in six years. PMI activity data showed difficulties
in the euro zone economy, with preliminary Composite PMI falling to 47.0, worse than expected and its seventh month below the 50 level separating growth from contraction. ECB Governing Council member Madis Muller said today that markets are getting ahead of
themselves in betting that the ECB will start cutting interest rates in the first half of next year. The Bundesbank sees the German economy barely growing in 2024 after its contraction this year, according to fresh forecasts published today.

EQUITIES: 
 MSCI Rebalance Today

US equity futures are higher, with the S&P 500 poised for its seven consecutive weekly advance. The S&P 500 is up about 23% this year, on the heels of tech megacap stocks. But the equal-weighted
S&P is up just 11%, marking its worst relative annual performance since 1998. Nasdaq Composite, Russell 2000, and Dow Jones Industrials are all at record highs.  US equity funds clocked a ninth week of inflows, taking in $25.9 billion, the longest streak since
Dec. 2021, according to BofA. A rally in 2023’s laggards shows US investors are going all-in on bets for rate cuts next year, BofA’s Michael Hartnett said.  As the week draws to a close, traders still have to contend with potential volatility from a $5.4 trillion
options expiration — the biggest on record.

Futures ahead of the bell: E-Mini S&P +0.1%, Nasdaq +0.3%, Russell 2000 +0.4%, Dow +0.2%.

In pre-market trading, Costco Wholesale (COST) rose 2.8% after the retailer announced a special dividend of $15 a share and topped estimates for first-quarter results due to demand for
cheaper groceries. First Solar (FSLR) and Enphase Energy (ENPH) added 2.7% and 3.3%, respectively, as Jefferies started coverage of the solar companies with a “buy” rating. Intel (INTC) rises 2.3% after the world’s biggest maker of PC processors unveiled new
chips for personal computers and data centers as it seeks to break into the lucrative AI hardware space. Rocket Lab USA (RKLB) shares rise as much as 15% after the SpaceX rival blasted off for space for the first time since its September failure.

European gauges fluctuated but were set for their longest weekly gaining streak since April, with optimism that central banks were ready to start cutting interest rates sending the Stoxx
600 to a 23-month high. Sentiment was also boosted Friday by China’s decision to pump a record amount of cash into the economy.  Euro area services PMI fell to 48.1 down from 48.7 previously. Manufacturing was unchanged. UK Manufacturing PMI came in weaker
at 46.4 versus 47.5 expected. German Flash PMI fell for the sixth consecutive month, declining to 46.7 in December from November’s 47.8 and below the 48.2 forecast by economists. Miners and autos outperformed in the region, while consumer stocks, healthcare
and banks were among the laggards. Stoxx 600 +0.1%, DAX is flat, CAC +0.3%, FTSE 100 -0.7%. Basic Resources +2.2%, Autos +1.1%. Banks -0.6%, Telecom -0.5%, Healthcare -0.5%.

Asian stocks gained, led by advances in Hong Kong after China’s central bank stepped up support for the economy by adding $112 billion of cash into the financial system and announced
renewed support for the property sector. The MSCI Asia Pacific Index rose 1% to the highest level since early August, with Tencent, Alibaba and BHP among the biggest boosts. Japanese stocks rebounded as the yen fell after three straight days of gains.  The
Hang Seng Index climbed more than 2% after the People’s Bank of China offered a record amount of cash via its medium-term lending facility. Chinese blue chips CSI300 reversed earlier gains to end lower on the day and hit a five-year low, after a raft of data
showed China’s economic recovery remains patchy. Hang Seng Index +2.4%, Sensex +1.4%, Philippines +1%, ASX 200 +0.9%, Nikkei 225 +0.9%, Kospi +0.75%, Taiwan +0.1%. Singapore -0.2%, China’s CSI 300 -0.3%, Vietnam -0.7%.            

FIXED INCOME: 
 

Treasuries were steady after the yield on the 10-year benchmark broke below 4% for the first time since August. Long-end lags, steepening 5s30s spread by ~2bp. In
Europe, Flash PMIs from Germany and France extended the rally in EGBs where core 10yr yields are lower by 7bps. US session includes manufacturing data and comments by Fed’s Williams at 8:30ET. Treasury 10-year yields around 3.915%, ~1bp richer on the day.   
      

METALS: 
   

Gold prices inched higher, on course for a weekly advance of about 2%. Investors are focused today on US industrial production and manufacturing data for clues on
the Federal Reserve’s stance on inflation. Spot gold was up 0.3%, silver is flat.             

ENERGY:  

Oil prices rose, on track to notch their first weekly rise in two months after benefiting from a bullish forecast from the International Energy Agency on oil demand
for next year. Weak economic data from China, the world’s biggest oil importer, weighed on prices, however. A container ship was attacked near the coast of Yemen, the latest threat to vessels in the Red Sea. WTI +0.8%, Brent +0.7%, US Nat Gas +0.7%, RBOB +0.6%.   

CURRENCIES:   

In currency markets, the euro fell after data showed that private-sector activity in the euro area’s two biggest economies worsened at the end of the year. Still,
EURUSD holds onto the bulk of its 1.1% gain from Thursday after the ECB seemed more hawkish than the Fed. The dollar traded in tight range against Group-of-10 peers. US$ Index +0.2%, EURUSD -0.45%, GBPUSD -0.1%, AUDUSD +0.1%, USDJPY -0.1%, USDNOK -0.45%.    

Bitcoin -1%, Ethereum -1.8%.  

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
• Alteryx (AYX) Raised to Neutral at Piper Sandler; PT $50
• AMD (AMD) Raised to Buy at BofA
• Cencora (COR) Inc Raised to Buy at CFRA; PT $222
• Credicorp (BAP) Raised to Overweight at JPMorgan; PT $190
• CubeSmart (CUBE) Raised to Outperform at BMO; PT $49
• Elanco Animal Health (ELAN) Raised to Overweight at Morgan Stanley
• Equifax (EFX) Raised to Overweight at Wells Fargo; PT $290
• GE (GE) Raised to Overweight at Wells Fargo; PT $144
• Global Business Travel Group (GBTG) Raised to Buy at Citi; PT $8
• Intel (INTC) Raised to Neutral at BofA
• Macom (MTSI) Raised to Buy at BofA
• Micron (MU) Raised to Buy at BofA
• Moody’s (MCO) Raised to Overweight at Wells Fargo; PT $455
• Omnicom (OMC) Raised to Overweight at Morgan Stanley; PT $100
• Priority Technology Hold (PRTHU) Raised to Buy at B Riley; PT $10
• RCM (RCM) Raised to Overweight at Morgan Stanley; PT $17
• SBA Comms (SBAC) Raised to Outperform at BMO; PT $285
• SQM (SQM/B CI) ADRs Raised to Neutral at Goldman; PT $54.50
• Vornado Realty (VNO) Raised to Market Perform at BMO; PT $31
• Downgrades
• Aadi Bioscience Inc (AADI) Cut to Neutral at HC Wainwright
• Ameren (AEE) Cut to Sector Weight at KeyBanc
• Aon PLC (AON) Cut to Underperform at KBW; PT $328
• Arthur J Gallagher (AJG) Cut to Underperform at KBW; PT $230
• Axcelis Technologies (ACLS) Cut to Neutral at BofA
• BlackRock (BLK) Cut to Neutral at JPMorgan; PT $708
• Boyd Gaming (BYD) Cut to Equal-Weight at Barclays; PT $66
• Brighthouse Financial (BHF) Cut to Underperform at KBW; PT $50
• Brink’s (BCO) Cut to Hold at Hedgeye
• Brown & Brown (BRO) Cut to Underperform at KBW; PT $71
• Camden Property (CPT) Cut to Market Perform at BMO; PT $100
• Canadian Pacific Kansas (CP CN) Cut to Hold at CFRA; PT $78
• Clarivate (CLVT) Cut to Underweight at Wells Fargo; PT $8
• DocuSign (DOCU) Cut to Outperform at Daiwa; PT $60
• Exelon (EXC) Cut to Neutral at Guggenheim; PT $40
• Genpact (G) Cut to Neutral at Baird; PT $38
• GlobalFoundries (GFS) Cut to Neutral at BofA
• Independence Realty (IRT) Cut to Underperform at BMO; PT $15
• Kilroy (KRC) Cut to Peerperform at Wolfe
• Kimberly-Clark (KMB) Cut to Underperform at BofA; PT $115
• Marriott Vacations (VAC) Cut to Equal-Weight at Barclays; PT $90
• Marsh & McLennan (MMC) Cut to Underperform at KBW; PT $192
• Reneo Pharma (RPHM) Cut to Neutral at HC Wainwright
• Cut to Market Perform at Leerink; PT $1
• Roku (ROKU) Cut to Sell at MoffettNathanson LLC
• Teradyne (TER) Cut to Underperform at BofA
• U.S. Bancorp (USB) Cut to Neutral at Baird; PT $52
• Zions (ZION) Cut to Neutral at Baird; PT $45
• Initiations
• 10X Genomics (TXG) Rated New Buy at Guggenheim; PT $60
• Africa Oil (AOI CN) Rated New Buy at Fearnley; PT C$3.66
• Akamai (AKAM) Rated New Positive at Susquehanna; PT $150
• Akoya Biosciences (AKYA) Rated New Neutral at Guggenheim
• Array (ARRY) Rated New Hold at Jefferies; PT $18
• Augmedix (AUGX) Rated New Inline at Evercore ISI; PT $6
• Box (BOX) Rated New Buy at UBS; PT $33
• Castle Biosciences (CSTL) Rated New Buy at Guggenheim; PT $25
• Check Point Software (CHKP) Rated New Positive at Susquehanna; PT $190
• Cloudflare (NET) Rated New Neutral at Susquehanna; PT $75
• CNH Industrial (CNHI) Rated New Equal-Weight at Wells Fargo; PT $13
• Comtech Telecom (CMTL) Rated New Buy at B Riley; PT $18.25
• CrowdStrike (CRWD) Rated New Positive at Susquehanna; PT $330
• CyberArk (CYBR) Rated New Positive at Susquehanna; PT $255
• Rated New Buy at Jefferies; PT $240
• Enphase Energy (ENPH) Rated New Buy at Jefferies; PT $145
• Exact Sciences (EXAS) Rated New Buy at Guggenheim; PT $90
• Exelixis (EXEL) Rated New Buy at Citi; PT $31
• First Solar (FSLR) Rated New Buy at Jefferies; PT $211
• Fortinet (FTNT) Rated New Neutral at Susquehanna; PT $55
• Genesco (GCO) Rated New Buy at B Riley; PT $43
• Guardant Health (GH) Rated New Neutral at Guggenheim
• Icon (ICLR) Rated New Buy at Truist Secs; PT $357
• Illumina (ILMN) Rated New Buy at Guggenheim; PT $155
• Intuitive Surgical (ISRG) Reinstated Buy at William O’Neil
• Intuit (INTU) Rated New Positive at Susquehanna; PT $700
• Las Vegas Sands (LVS) Rated New Positive at Susquehanna; PT $59
• Melco Resorts (MLCO) ADRs Rated New Positive at Susquehanna; PT $15
• Metropolitan (MCB) Rated New Overweight at Piper Sandler; PT $60
• Myomo (MYO) Rated New Buy at HC Wainwright
• MYR Group (MYRG) Rated New Buy at Goldman; PT $164
• Myriad Genetics (MYGN) Rated New Buy at Guggenheim; PT $23
• Natera (NTRA) Rated New Buy at Guggenheim; PT $70
• Okta (OKTA) Rated New Neutral at Susquehanna; PT $75
• Orla Mining (OLA CN) Rated New Outperform at RBC; PT C$6
• Pacific Bio (PACB) Rated New Neutral at Guggenheim
• Palo Alto Networks (PANW) Rated New Positive at Susquehanna; PT $400
• Rapid7 (RPD) Rated New Neutral at Susquehanna; PT $55
• SentinelOne (S) Rated New Positive at Susquehanna; PT $35
• Snowline Gold (SGD CN) Rated New Outperform at CIBC; PT C$7.50
• SunPower (SPWR) Rated New Hold at Jefferies; PT $5.50
• Sunrun (RUN) Rated New Buy at Jefferies; PT $25
• TE Connectivity (TEL) Reinstated Equal-Weight at Wells Fargo; PT $144
• Tenable (TENB) Rated New Positive at Susquehanna; PT $55
• Tourmaline Bio Inc (TRML) Rated New Buy at Jefferies; PT $41
• Varonis Systems (VRNS) Rated New Positive at Susquehanna; PT $55
• Vertex Pharmaceuticals (VRTX) Reinstated Buy at William O’Neil
• Vestis (VSTS) Rated New Overweight at Wells Fargo; PT $24
• Wynn Resorts (WYNN) Rated New Positive at Susquehanna; PT $105
• Zoetis (ZTS) Reinstated Buy at William O’Neil
• Zscaler (ZS) Rated New Positive at Susquehanna; PT $275

Data sources: Bloomberg, Reuters, CQG