Daily Game Plan

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

DATA/HEADLINES  8:30ET Fed’s Barkin speaks; 10:00ET ISM Manufacturing, JOLTS Job Openings; 2:00ET FOMC Meeting Minutes

TODAY’S HIGHLIGHTS and News:  

• Former Harvard president Claudine Gay has been accused of over 50 instances of plagiarism
  
• Armed drone shot down over Erbil airport in northern Iraq, where US forces are stationed
• The NFL fined Carolina Panthers owner David Tepper $300,000 for tossing a drink at fans
  
• 14 million illegal immigrants attempted to purchase firearms, according to the FBI’s database

Worldwide stock markets extended their drop at the start of the New Year as investors braced for a swathe of data that could show whether bets on interest-rate cuts
this year are justified. A rebound in the dollar and bond yields is also providing traders with catalysts to take profits.  Meanwhile, heightened tensions in the Middle East also dented overall market sentiment. Israeli forces intensified their bombing of
the Gaza Strip after the war stretched into Lebanon with the killing in Beirut of Hamas’ deputy leader. Investor focus now shifts to Friday’s US non-farm payroll data and euro area inflation print that may provide further clue on the trajectory of global interest
rates.    

EQUITIES: 
 

US equity futures slid again as Treasury yields extended gains ahead of minutes of Fed’s December meeting that could offer insights on the Federal Reserve’s monetary policy easing plans.
Important data this week should clarify the outlook, with ISM’s manufacturing survey and the JOLTS report of job openings, due later this morning, set to show whether the central bank has new recession signals to worry about. Nvidia is lower ahead of the bell
as investors continued their retreat from tech stocks following a surge in Treasury yields.

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.6%, Russell 2000 -1%, Dow -0.3%.

In pre-market trading,  Dyne Therapeutics (DYN) rose 84% after it announced initial clinical data from Achieve trial.  Ambarella (AMBA) shares are down 3.5%, after Wells Fargo Securities
downgraded the chipmaker to equal-weight from overweight. Mercury Systems (MRCY) slips 2.3% after Jefferies downgraded the defense company to underperform from hold. Wendy’s (WEN) falls 1.5% after Barclays cuts the fast-food restaurant operator to equal weight
from overweight. Verizon (VZ) shares rise 1% after the company was raised to overweight from sector weight at KeyBanc Capital Markets.

European gauges dropped in a cautious start to the new year as investors watched for clues as to whether more dovish central bank leanings could give further support to the rally at the
end of 2023. The Stoxx Europe 600 Index reversed earlier tentative gains as shares in cyclical sectors like financial services and mining fell. Luxury stocks were notable underperformers, with heavyweight LVMH sliding 3% as UBS analysts said that they expect
the sector to see a weak earnings season. Pharmaceutical stocks were among the biggest gainers following supportive comments from analysts at Jefferies, while Danish container shipping giant A.P. Moller-Maersk A/S rose after an upgrade from Goldman Sachs.
Stoxx 600 -0.9%, DAX -1.1%, CAC -1.5%, FTSE 100 -0.7%. Construction -2.4%, Financial Services -2.3%, Basic Resources -2.2%. Food & Bev +0.6%, Telecom +0.4%, Healthcare +0.3%.    

Asian equities declined, their worst day since October, as selling in the region’s technology stocks weighed. The MSCI AC Asia Pacific Index excluding Japan extended Tuesday’s loss to
fall as much as 1.4%, with TSMC, Samsung and Alibaba the biggest drags. Japan was closed for a holiday. Tencent and NetEase gained in Hong Kong on signs China is trying to contain the damage from harsh gaming rules. Local news reports indicated that policy
makers may consider further measures to stabilize the economy. South Korea’s benchmark was the region’s worst performer, falling the most in two months, as declines in chipmakers SK Hynix and Samsung weighed.  Kospi -2.3%, Taiwan -1.6%, ASX 200 -1.4%, Hang
Seng Index -0.8%, CSI 300 -0.2%, Philippines -0.8%, Sensex -0.75%, Thailand -0.25%. Vietnam +1.1%, Shanghai Composite +0.2%.          

FIXED INCOME: 
 

US Treasury market extended losses for a fourth day, putting the 10-year yield near 4%, reflecting investor caution ahead of the release of fresh economic data. 
Meanwhile, investors will be looking for any signs of interest rate cut discussions in the FOMC’s minutes from the December meeting. Yields rose about four basis points across the curve, sending the benchmark 10-year rate to 3.98%. Another busy corporate issuance
slate is expected for today’s session, follows almost $30b pricing Tuesday.     

METALS: 
   

Gold fell for a fourth session, under pressure from a strengthening dollar as investors began the year in bearish mood. Recent swings in the US bond market suggest
traders are tempering their bets on rate cuts this year. Later today, investors will look to a slew of economic data and minutes from the most recent Fed meeting for a steer on the outlook for monetary policy. Spot gold -0.6%, silver -1.7%.        

ENERGY:  

Oil climbed as signs of supply disruption in Libya helped counter fading optimism about interest rate cuts. Libya’s Sharara field, the country’s largest, has begun
the process of fully shutting down after protests. In recent times, it had been pumping about 300,000 barrels a day. Traders are assessing whether strong non-OPEC supply will remain a dominant oil-market theme in again 2024. Higher output from outside of the
producer group has so far countered its efforts to tighten the market — but extended curbs take effect this week. Oil is facing a glut this year as production from non-OPEC+ countries like the US runs ahead of demand and traders are skeptical the cartel will
be able to implement cuts. WTI 11%, Brent +1.1%, US Nat Gas +2%, RBOB +0.6%.    

CURRENCIES:   

The dollar strengthened for a fourth day, the longest run since November after posting its biggest daily jump since March on Tuesday. The euro pared gains as Germany’s
unemployment rate rose, while the Japanese yen sank for the second session. US$ Index +0.3%, GBPUSD +0.1%, USDJPY +0.7%, EURUSD -0.2%, AUDUSD -0.5%, USDCHF +0.4%.  

Bitcoin -5.5%, Ethereum -5.7%. 

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
• Ameriprise (AMP) Raised to Buy at Goldman; PT $452
• AptarGroup (ATR) Raised to Outperform at Baird; PT $150
• Arcutis Biotherapeutics (ARQT) Raised to Buy at Mizuho Securities
• BCE (BCE CN) Raised to Buy at TD; PT C$57
• Citigroup (C) Raised to Outperform at Wolfe; PT $58
• Civitas Resources Inc (CIVI) Raised to Buy at Mizuho Securities; PT $86
• CNX Resources (CNX) Raised to Neutral at Mizuho Securities
• Discover Financial (DFS) Raised to Overweight at Piper Sandler
• GSK (GSK LN) ADRs Raised to Buy at Jefferies; PT $48
• Jumia (JMIA) ADRs Raised to Equal-Weight at Morgan Stanley; PT $3.60
• Lazard Inc (LAZ) Raised to Outperform at Wolfe; PT $42
• Pactiv Evergreen (PTVE) Raised to Buy at Citi; PT $16
• PBF Energy (PBF) Raised to Buy at Mizuho Securities; PT $52
• PNM Resources (PNM) Raised to Overweight at Wells Fargo; PT $44
• Southern First Bancshares (SFST) Raised to Overweight at Piper Sandler
• State Street (STT) Raised to Buy at Goldman; PT $92
• Teva (TEVA IT) ADRs Raised to Neutral at Piper Sandler; PT $12
• Unum (UNM) Raised to Overweight at JPMorgan; PT $55
• Verizon (VZ) Raised to Overweight at KeyBanc; PT $45
• Yum (YUM) Raised to Overweight at Barclays; PT $146
• Downgrades
• Ambarella (AMBA) Cut to Equal-Weight at Wells Fargo; PT $65
• Antero Resources (AR) Cut to Neutral at Mizuho Securities; PT $27
• Aptiv (APTV) Cut to Neutral at Baird; PT $96
• AstraZeneca (AZN LN) ADRs Cut to Hold at Jefferies; PT $70
• Aurora Innovation (AUR) Cut to Sell at Goldman; PT $2
• Avery Dennison (AVY) Cut to Neutral at Citi; PT $214
• BellRing Brands (BRBR) Cut to Hold at Truist Secs; PT $50
• Blackstone (BX) Cut to Neutral at Goldman; PT $128
• BorgWarner (BWA) Cut to Neutral at Baird; PT $39
• Bread Financial Holdings (BFH) Cut to Underperform at Evercore ISI
• Bristol Myers (BMY) Cut to Neutral at BofA; PT $60
• CACI (CACI) Cut to Hold at Jefferies; PT $350
• Callon Petroleum (CPE) Cut to Neutral at Mizuho Securities; PT $40
• CBRE (CBRE) Cut to Inline at Evercore ISI; PT $96
• Chesapeake Energy (CHK) Cut to Neutral at Mizuho Securities; PT $96
• CME Group (CME) Cut to Sell at Goldman; PT $195
• Comstock Resources (CRK) Cut to Underperform at Mizuho Securities
• Crescent Energy Co (CRGY) Cut to Neutral at Mizuho Securities; PT $14
• Cullen/Frost (CFR) Cut to Underperform at Evercore ISI; PT $111
• Equitable Holdings (EQH) Cut to Neutral at JPMorgan; PT $36
• Exxon (XOM) Cut to Neutral at Mizuho Securities; PT $117
• Gulfport Energy (GPOR) Cut to Neutral at Mizuho Securities; PT $148
• Keurig Dr Pepper (KDP) Cut to Equal-Weight at Morgan Stanley; PT $37
• Lincoln National (LNC) Cut to Underweight at JPMorgan; PT $26
• Magna Intl (MG CN) Cut to Neutral at Goldman; PT C$77
• Masimo (MASI) Cut to Hold at Needham
• Maximus Inc (MMS) Cut to Market Perform at Raymond James
• MaxLinear (MXL) Cut to Equal-Weight at Wells Fargo; PT $25
• Mercury Systems (MRCY) Cut to Underperform at Jefferies; PT $30
• Northern Trust (NTRS) Cut to Underperform at Wolfe; PT $85
• O-I Glass (OI) Cut to Neutral at Citi; PT $18
• Occidental (OXY) Cut to Neutral at Mizuho Securities; PT $63
• PJT Partners (PJT) Cut to Underperform at Wolfe; PT $89
• PNM Resources (PNM) Cut to Neutral at Mizuho Securities; PT $41
• Prudential Financial (PRU) Cut to Neutral at JPMorgan; PT $118
• Raymond James (RJF) Cut to Neutral at Goldman; PT $116
• Rocket Cos. (RKT) Cut to Equal-Weight at Wells Fargo; PT $14
• Cut to Underperform at KBW; PT $10.75
• Schwab (SCHW) Cut to Neutral at Goldman; PT $71
• Sherwin-Williams (SHW) Cut to Neutral at Baird; PT $300
• Silgan (SLGN) Cut to Neutral at Citi; PT $47
• SoFi Technologies (SOFI) Cut to Underperform at KBW; PT $6.50
• Southwestern Energy (SWN) Cut to Underperform at Mizuho Securities
• Wendy’s (WEN) Cut to Equal-Weight at Barclays; PT $21
• Wipro (WPRO IN) ADRs Cut to Reduce at HSBC; PT $4.20
• Xponential (XPOF) Cut to Neutral at Piper Sandler
• Initiations
• Accolade (ACCD) Rated New Equal-Weight at Barclays; PT $13
• Amylyx Pharmaceuticals (AMLX) Rated New Outperform at Baird; PT $37
• Cardinal Health (CAH) Rated New Overweight at Barclays; PT $117
• Cencora (COR) Rated New Overweight at Barclays; PT $242
• Computer Programs and Systems Inc (CPSI) US Rated New Equal-Weight at Barclays; PT $12
• Con Edison (ED) Rated New Neutral at Ladenburg Thalmann; PT $92.50
• Doximity (DOCS) Rated New Equal-Weight at Barclays; PT $31
• Enovis Corp (ENOV) Rated New Outperform at William Blair
• Evolent (EVH) Rated New Overweight at Barclays; PT $39
• GoodRx Holdings (GDRX) Rated New Overweight at Barclays; PT $8
• Health Catalyst (HCAT) Rated New Overweight at Barclays; PT $14
• HealthEquity (HQY) Rated New Overweight at Barclays; PT $84
• HealthStream (HSTM) Rated New Overweight at Barclays; PT $32
• Intra-Cellular (ITCI) Rated New Outperform at Baird; PT $83
• Jazz Pharma (JAZZ) Rated New Outperform at Baird; PT $160
• Labcorp (LH) Rated New Equal-Weight at Barclays; PT $222
• LifeStance Health (LFST) Rated New Underweight at Barclays; PT $7
• McKesson (MCK) Rated New Overweight at Barclays; PT $537
• Nvidia (NVDA) Rated New Neutral at DA Davidson; PT $410
• Omnicell (OMCL) Rated New Underweight at Barclays; PT $33
• OptimizeRx (OPRX) Rated New Equal-Weight at Barclays; PT $15
• Owens & Minor (OMI) Rated New Equal-Weight at Barclays; PT $21
• Phreesia (PHR) Rated New Overweight at Barclays; PT $29
• Premier (PINC) Rated New Equal-Weight at Barclays; PT $22
• Progyny (PGNY) Rated New Overweight at Barclays; PT $48
• Quest Diagnostics (DGX) Rated New Equal-Weight at Barclays; PT $145
• RCM (RCM) Rated New Overweight at Barclays; PT $14
• Sempra (SRE) Rated New Buy at Ladenburg Thalmann; PT $81.50
• Talkspace (TALK) Rated New Equal-Weight at Barclays; PT $2.50
• Teladoc (TDOC) Rated New Overweight at Barclays; PT $26
• TSMC (2330 TT) ADRs Rated New Overweight at Guotai Junan Sec; PT $142.90
• Utz Brands (UTZ) Rated New Buy at Needham; PT $20
• Veradigm Inc (MDRX) Rated New Equal-Weight at Barclays; PT $11
• Vinfast Auto Ltd (VFS) Rated New Buy at BTIG; PT $10
• Walgreens Boots (WBA) Rated New Underweight at Barclays; PT $21
• Windtree Therapeutics (WINT) Reinstated Neutral at HC Wainwright; PT $1
• WW International (WW) Rated New Underweight at Barclays; PT $8

Data sources: Bloomberg, Reuters, CQG