Daily Game Plan

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

DATA/HEADLINES:   8:30ET Trade Balance; 10:00ET World Bank annual report on global economy; 12:00ET Fed’s Barr speaks;
1:00ET 3 Year Note Auction

TODAY’S HIGHLIGHTS and News:  

• House GOP begins Mayorkas impeachment proceedings
  
• Rare, dual cicada emergence expected in 2024; Broods XIX and XIII; occurs every 221 years
  link
• The first US moon landing mission in more than 50 years seems doomed after spacecraft developed a “critical” fuel leak just hours after it launched
• JetBlue is making aviation history, with Joanna Geraghty the first woman CEO of a major US air carrier

Global shares eased as investors shrugged off tech-led gains that rolled across global markets in the prior session. As Monday’s bounce proves short-lived, investors
are back to worrying about risks from inflation as a wave of corporate and government debt washes over the market. BlackRock issued a warning about the dangers of debt-fueled government spending in an election year as government bonds slumped under supply
from countries including the UK, Italy and Belgium. Europe’s primary bond market is set to see a record breaking day of issuance today. The Italian unemployment rate in November fell from 7.7% to 7.5% versus expectations for a small increase. President Emmanuel
Macron appointed education minister Gabriel Attal, a 34-year-old ally as France’s prime minister in a bid to bring fresh impetus to his administration just months ahead of European Parliament elections.   

EQUITIES: 
 

US equity futures retreated as the tech-fueled bounce faded. Nvidia (NVDA) posted a record high close on Monday after unveiling new artificial-intelligence products for personal computers.
Morgan Stanley’s Mike Wilson, Wall Street’s most notorious bear, is softening his gloomy tone on US equities. A soft landing for the US economy is his base case scenario in 2024 if economic growth picks back up. Goldman sees opportunities to buy dips in US
equities.    

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.6%, Russell 2000 -1.1%, Dow -0.4%.

In pre-market trading, Juniper Networks (JNPR) surged 23% after the Wall Street Journal reported HP Enterprise is in talks to buy the company for about $13 billion. Boeing slipped after
United found loose bolts in some of its 737 Max 9 jetliners, while Alaska Air said loose hardware was visible on some planes during inspections. The NTSB said it might widen its Max 9 probe beyond the model on which the accident occurred. Jefferies’ (JEF)
fell 2% after fourth-quarter profit and revenue dropped. Eversource Energy (ES) slips 3% after saying it’s in advanced talks to unload its share in three offshore wind projects. Match Group (MTCH) gains 14% after the Wall Street Journal reported that Elliott
Investment Management had built a stake of about $1 billion. MaxCyte (MXCT) climbs 5% after posting preliminary 4Q revenue that’s higher than the year-ago period. Microchip Technology (MCHP) slips 3% after the chipmaker said its preliminary 3Q revenue is down
sequentially about 22%. PayPal (PYPL) dips 2% after the payments firm was cut to equal-weight by Morgan Stanley.

European gauges reversed early gains as investors focused on the path of interest rates and economic growth. Economic sentiment remains deeply negative in Europe, with the latest reading
in the Sentix showing only moderate improvement. German industrial production shrunk unexpectedly in November, the sixth straight monthly drop, official data showed.  The Stoxx 600 is near session lows with banks, technology and mining shares leading declines. 
Jupiter Fund Management is the biggest decliner on the FTSE 350 Index, (JUP -16%), after it flagged net outflows of 2.2 billion pounds for 2023 and the departure of a star manager. Spanish drug company Grifols plunged as much as 43% after hedge fund Gotham
City Research questioned its accounting practices. GSK agreed to buy US biotech Aiolos Bio, spending as much as $1.4 billion to gain a promising respiratory medicine. Stoxx 600 -0.25%, DAX -0.3%, CAC -0.3%, FTSE 100 -0.05%. Banks -1.2%, Technology -0.8%, Retail
-0.8%, Basic Resources -0.8%. Energy +0.9%, Healthcare +0.1%.

Asia stocks gained amid supportive comments on interest-rate cuts from policymakers in the US and China. The MSCI Asia Pacific Index climbed as much as 0.9% before paring the advance
to 0.2%. Japan’s Nikkei 225 led gains in the region, hitting a new 33-year high, after Federal Reserve Governor Michelle Bowman said inflation could fall toward the Fed’s 2% target with interest rates held at current levels. In China, the domestic central
bank signaled that it’s prepared to keep policy loose by lowering the amount of money banks must keep in reserve. China’s benchmark CSI 300 eked out small gains while benchmarks in Hong Kong closed lower. Shares in Australia rose after data showed November
retail sales surged 2%, the most in two years on Black Friday discounts. The results were distorted in part by the seasonal adjustment process. In South Korea, Samsung Electronics fell over 2% after posting its sixth straight quarter of declining operating
profit. Nikkei 225 +1.2%, ASX 200 +0.9%, Singapore +0.3%, CSI 300 +0.2%, Sensex +0.05%. Indonesia -1.1%, Kospi -0.25%, Hang Seng Index -0.2%.  

FIXED INCOME: 
 

Treasuries are slightly lower across the curve with losses led by long-end, steepening 2s10s, 5s30s spreads by 1.5bp and 1bp on the day. US yields are cheaper by
up to 2bp across long-end of the curve with 10-year sector trading around 4.05%. Bunds and gilts trade cheaper by 4.5bp and 4bp, as European supply skewed toward longer-end sales weighs. Treasury auctions resume today with $52b 3-year notes, followed by $37b
10- and $21b 30-year sales Wednesday and Thursday. Dollar issuance slate includes 5Y deals from KfW and OKB; twelve names priced more than $17b Monday, pushing January’s total past $74b. Current market pricing reflects a 58% chance of a rate cut at the Fed’s
March meeting, down from more than 80% late last year, according to CME’s Fedwatch tool.      

METALS: 
   

Gold edged higher after a 1% drop on Monday, driven by investors adjusting expectations on when the Federal Reserve might cut interest rates. Yesterday, a New York
Fed survey showed one year inflation expectations diminishing, bolstering the case for an end to monetary tightening. Thursday’s US inflation print could provide some clarity on when the first rate cut may come. Spot gold +0.3%, silver +0.2%.          

ENERGY:  

Oil bounced back from the largest drop in about a month on signs of a weaker physical market. Geopolitical tensions in the Middle East and an ongoing supply outage
in Libya offered support to prices on Tuesday, analysts said. Regarding the Gaza war, the Israeli military has said its fight against Hamas will continue through 2024, worrying markets that the conflict could grow into a regional crisis that could disrupt
Middle Eastern oil supplies. US Secretary of State Antony Blinken told Israeli leaders there was still a chance of winning acceptance from their Arab neighbors if they create a path to a viable Palestinian state. WTI +3%, Brent +2.7%, US Nat Gas +3%, RBOB
+3.1%.            

CURRENCIES:   

In currency markets, the dollar inched higher as the yen strengthened for a second consecutive day as the Bank of Japan maintained its 10-25 year bond purchases,
signaling reduced buying for January. Tokyo’s consumer price gains slowed in December, matching forecasts. The euro slipped on unexpected German industrial output decline. Sterling dropped on weaker-than-expected UK retail sales, while the Aussie Dollar jumped
after strong Australian November retail sales, only to reverse those gains. US$ Index +0.2%, GBPUSD -0.2%, EURUSD -0.1%, USDJPY -0.1%, AUDUSD -0.4%, USDCHF +0.4%.         

Bitcoin -1%, Ethereum -2.7%. Bitcoin dipped after surging past $47,000 on bets that the US is poised to approve the launch of the nation’s first exchange-traded funds.
The US Securities and Exchange Commission is expected to make a decision on some Bitcoin ETF applications by Wednesday, with spectators anticipating a slew of rulings to avoid awarding a first-mover advantage. Bitwise emerged from the pack on Monday as offering
the cheapest fee for its planned ETF at 0.24% after an introductory no-fee period, while Grayscale’s planned Bitcoin Trust was the most expensive at 1.5%.  

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
• Allstate (ALL) Raised to Buy at Jefferies; PT $180
• Asur (ASURB MM) ADRs Raised to Neutral at Grupo Santander; PT $287
• CAAP (CAAP) Raised to Buy at Citi; PT $21
• Century Aluminum (CENX) Raised to Buy at B Riley; PT $14
• Citigroup (C) Raised to Buy at HSBC; PT $61
• CrowdStrike (CRWD) Raised to Overweight at Morgan Stanley; PT $304
• Dlocal (DLO) Raised to Buy at New Street Research; PT $24
• Evergy (EVRG) Raised to Overweight at Wells Fargo; PT $60
• Exxon (XOM) Raised to Buy at Redburn; PT $119
• Frontline PLC (FRO) Raised to Buy at Deutsche Bank
• GoDaddy (GDDY) Raised to Overweight at Piper Sandler; PT $121
• Interactive Brokers (IBKR) Raised to Buy at Goldman; PT $102
• JPMorgan (JPM) Raised to Buy at Deutsche Bank; PT $190
• KeyCorp (KEY) Raised to Buy at Jefferies; PT $17
• Northern Trust (NTRS) Raised to Buy at Jefferies; PT $99
• Paramount Global (PARA) Raised to Neutral at MoffettNathanson LLC
• Regions Financial (RF) Raised to Buy at Jefferies; PT $22
• Sherwin-Williams (SHW) Raised to Neutral at On Field; PT $300
• Tenable (TENB) Raised to Overweight at Morgan Stanley; PT $60
• United Airlines (UAL) Raised to Buy at BofA
• Downgrades
• ABB (ABBN SW) ADRs Cut to Market Perform at Cowen; PT $43
• Ares Management (ARES) Cut to Hold at Jefferies
• Arthur J Gallagher (AJG) Cut to Hold at Jefferies; PT $233
• Axalta (AXTA) Cut to Neutral at On Field; PT $36
• Axonics Inc (AXNX) Cut to Peerperform at Wolfe
• Brown & Brown (BRO) Cut to Hold at Jefferies; PT $78
• CyberArk (CYBR) Cut to Equal-Weight at Morgan Stanley; PT $240
• Dada Nexus (DADA) ADRs Cut to Reduce at CLSA; PT $1.75
• Fifth Third (FITB) Cut to Market Perform at KBW; PT $37
• LoanDepot (LDI) Cut to Sell at Goldman; PT $3
• Morgan Stanley (MS) Cut to Hold at HSBC; PT $96
• Netflix (NFLX) Cut to Neutral at Citi; PT $500
• NextEra Energy Partners (NEP) Cut to Neutral at CIBC; PT $35
• PayPal (PYPL) Cut to Equal-Weight at Morgan Stanley; PT $66
• Perella Weinberg Partners (PWP) Cut to Sell at Goldman; PT $11.50
• PGT Innovations (PGTI) Cut to Hold at Truist Secs; PT $43
• PJT Partners (PJT) Cut to Neutral at Goldman; PT $99
• Raymond James (RJF) Cut to Hold at Jefferies; PT $117
• Red Rock Resorts (RRR) Cut to Equal-Weight at Morgan Stanley; PT $48
• SEMrush (SEMR) Cut to Neutral at Piper Sandler; PT $14
• Solo Brands (DTC) Cut to Market Perform at William Blair
• StoneCo (STNE) Cut to Underperform at Grupo Santander; PT $17
• W R Berkley Corp (WRB) Cut to Inline at Evercore ISI; PT $79
• Wells Fargo (WFC) Cut to Hold at Deutsche Bank; PT $51
• Initiations
• Airbnb (ABNB) Rated New Market Perform at BMO; PT $134
• Alphabet (GOOGL) Rated New Outperform at BMO; PT $170
• Amazon (AMZN) Rated New Outperform at BMO; PT $200
• Arrow Financial (AROW) Rated New Market Perform at Hovde Group
• Booking (BKNG) Rated New Outperform at BMO; PT $4,150
• Caesars Entertainment (CZR) Rated New Market Outperform at JMP; PT $65
• Criteo (CRTO) ADRs Rated New Market Perform at BMO; PT $28
• DoorDash (DASH) Rated New Outperform at BMO; PT $120
• DoubleVerify (DV) Rated New Outperform at BMO; PT $44
• DraftKings (DKNG) Rated New Outperform at BMO; PT $43
• EBay (EBAY) Reinstated Market Perform at BMO; PT $49
• EchoStar (SATS) Rated New Equal-Weight at Morgan Stanley; PT $14.25
• Electronic Arts (EA) Rated New Outperform at BMO; PT $160
• Expedia (EXPE) Rated New Outperform at BMO; PT $181
• Instacart (CART) Rated New Market Perform at BMO; PT $26
• Integral Ad Science (IAS) Rated New Outperform at BMO; PT $18
• Lyft (LYFT) Rated New Market Perform at BMO; PT $15
• MDxHealth SA (MDXH) Reinstated Overweight at Piper Sandler; PT $6
• Meta Platforms (META) Rated New Market Perform at BMO; PT $397
• Netflix (NFLX) Rated New Outperform at BMO; PT $566
• Pinterest (PINS) Rated New Outperform at BMO; PT $45
• Post Holdings (POST) Rated New Buy at Mizuho Securities; PT $110
• Roblox (RBLX) Rated New Outperform at BMO; PT $55
• Snap (SNAP) Rated New Outperform at BMO; PT $22
• Take-Two (TTWO) Rated New Outperform at BMO; PT $200
• Trade Desk (TTD) Rated New Outperform at BMO; PT $88
• TripAdvisor (TRIP) Rated New Market Perform at BMO; PT $20
• Uber (UBER) Rated New Outperform at BMO; PT $69
• Wayfair (W) Rated New Market Perform at BMO; PT $57

Data sources: Bloomberg, Reuters, CQG