Daily Game Plan

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

DATA/HEADLINES:   8:30ET Empire Manufacturing (consensus -4.3; -14.5 prior); 11:00ET Fed’s Waller speaks on economic
outlook and monetary policy

TODAY’S HIGHLIGHTS and News:  

• Vivek Ramaswamy suspended his campaign
• Houthi militants hit a US-owned commercial vessel with a ballistic missile on Monday
  
• JPMorgan sees the fastest push into US stocks since early 2022
• Future Hall-of-Fame center Jason Kelce said he is retiring
  

World stocks slipped and bond yields rose as hawkish remarks from central bank policymakers in Europe reduced bets that global interest rate cuts could come as early
as March. ECB’s Villeroy said “it is too early to declare victory over inflation” and ECB’s Valimaki stated “must not jump the gun on rate cuts.” ECB Governing Council member Robert Holzmann said in an interview on Monday that threats stemming from lingering
inflation and geopolitical risks will prevent the ECB from lowering interest rates this year. China remains in focus ahead of gross domestic product, industrial production and retail sales data due Wednesday. Meanwhile, Continued Houthi attacks on a US-owned
commercial vessel in the Red Sea added to high geopolitical tensions in the Middle East.        

EQUITIES: 
 

US equity futures faded with the dollar rising to a one-month high, while investors keep a close eye on corporate results.  Traders also await a speech by the Fed’s Christopher Waller
for clues about when the Fed might begin to cut interest rates.  BofA strategists said investors are the most overweight US stocks since December 2021 as respondents were “very optimistic” on rate cuts. In the week through Wednesday, retail traders put $3.3
billion into US stocks — the most since March 2022, the month policymakers began their rate-tightening campaign, data compiled by JPMorgan showed. Goldman Sachs Group topped profit estimates as its equities-trading unit posted a jump in revenue that was triple
what analysts expected. Fixed-income trading results and investment-banking fees fell short of expectations. Synopsys is set to buy Ansys for $390.19 per share in cash and stock, according to a statement.      

Futures ahead of the bell: E-Mini S&P -0.4%, Nasdaq -0.5%, Russell 2000 -0.8%, Dow -0.2%.

In pre-market trading, Goldman Sachs (GS) shares rise as much as 2.3% after the firm reported fourth-quarter net revenue that beat analysts’ estimates. Morgan Stanley (MS) gains as much
as 3% after the firm reported wealth management net revenue for the fourth quarter that beat the average analyst estimate. Synopsys is set to buy Ansys (ANSS +3%) for $390.19 per share in cash and stock, according to a statement.

European gauges are lower but well off the day’s lows as traders reassess bets on interest rate cuts after hawkish comments from the European Central Bank. The Stoxx Europe 600 Index
slipped as much as 0.8%, with 85% of its members in the red. The risk-off move followed ECB Governing Council member Robert Holzmann’s indication on Monday that cuts this year were not assured given lingering inflation and geopolitical risks. In economic data,
Germany’s ZEW survey showed investor expectations improved unexpectedly in January, while UK wage growth cooled at one of the fastest paces on record.  Among individual names, Lindt shares jumped after it beat sales forecasts, while Ocado gained after fourth-quarter
numbers were above expectations. Stoxx 600 -0.3%, DAX -0.3%, CAC -0.2%, FTSE 100 -0.25%. REITS -0.9%, Banks -0.9%, Utilities -0.7%, Autos -0.6%. Energy +0.4%, Media +0.2%.   

Asian equity markets traded mostly lower as risk sentiment took a breather ahead of key economic data from China.  The MSCI Asia Pacific Index dropped 1.5%, with Tencent and TSMC among
the biggest drags. Shares in Japan fell amid signs that the market was overbought after eight straight days of gains for the Topix. Rio Tinto Group, the world’s top iron ore exporter, sees increased stimulus measures in China driving the broader economy into
a gradual recovery this year. China’s economy grew around 5.2% in 2023, surpassing the government’s official growth target for the year without relying on “massive stimulus,” Chinese Premier Li Qiang said in Davos. China is considering 1 trillion yuan ($139
billion) of new debt issuance under a special sovereign bond plan this year to shore up the economy, funding projects in areas including food and energy.  Hang Seng Index -1.2%, Taiwan -1.1%, Kospi -1.1%, ASX 200 -1.1%, Topix -0.8%, Singapore -0.4%, Sensex
-0.3%. Indonesia +0.3%, CSI 300 +0.6%, Vietnam +0.8%.     

FIXED INCOME: 
 

Treasuries fell ahead of remarks from the Fed’s Christopher Waller, with yields cheaper by 6bp to 7bp across the curve.  Supply in the US this week includes a 20
year auction tomorrow and 10yr TIPS on Thursday. Heavy corporate issuance is expected this week as well. US 10-year yield is around 4.01%, cheaper by ~7bp vs Friday’s close; curve spreads are broadly within 1bp of Friday levels.

METALS: 
   

Gold slipped as much as 1% on increasing signs that global central banks may have to delay the timing of interest-rate cuts. The speculation about rate cuts is happening
too soon as the 2% inflation target hasn’t been reached, European Central Bank Governing Council member Joachim Nagel said on a panel at the World Economic Forum in Davos. Rising tensions and attacks on shipping in the Middle East are threatening to boost
consumer prices.  Spot gold -0.9%, silver -0.8%.     

ENERGY:  

Oil prices gained as investors weighed the impact of tensions in the Middle East. Yemen’s Houthi movement said on Monday that it will expand its targets in the Red
Sea region to include US ships. Iran said today it had launched ballistic missiles at targets in Iraq and Syria in defense of its sovereignty and to counter terrorism. Tankers carrying Russian crude are continuing to sail through the Red Sea.  On the demand
side, China’s oil refiners are actively seeking crude oil cargoes for March and April delivery to bolster inventories in anticipation of stronger demand in the latter half of the year. Texas’s power grid operator urged people to conserve energy Tuesday morning
as freezing weather strains systems. Extreme cold caused North Dakota’s daily oil production to plunge 425,000 barrels, while natural gas output also fell. WTI +0.5%, Brent +0.9%, US Nat Gas -8.6%, RBOB +2.7%.

CURRENCIES:   

In currency markets, the dollar rose for a third day of gains to its highest in a month ahead of a speech by the Fed’s Waller.  Sterling underperformed after data
showed that growth in British wages slowed. The euro is down a fourth day, its longest losing streak since December 6. Consumer expectations for euro-zone inflation fell to the lowest in more than 1 1/2 years in November, according to the ECB’s monthly survey.
The Aussie$ fell after data showed Australia’s consumer confidence slipped in January, as households remain anxious about their finances following a series of rapid interest rate hikes. US$ Index +0.75%, GBPUSD -0.6%, EURUSD -0.6%, USDJPY +0.65%, AUDUSD -0.8%,
NZDUSD -0.7%, USDNOK +0.8%, USDCHF +0.5%.   

Bitcoin +1%, Ethereum +0.9%. 

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
• Americold Realty Trust I (COLD) Raised to Buy at Truist Secs
• BlackRock (BLK) Raised to Outperform at Cowen
• Boston Beer (SAM) Raised to Market Perform at Bernstein
• Camtek/Israel (CAMT) Raised to Overweight at Barclays; PT $82
• Centerspace (CSR) Raised to Outperform at RBC; PT $63
• CMS Energy (CMS) Raised to Outperform at Wolfe; PT $62
• Coherent Corp (COHR) Raised to Overweight at Barclays; PT $60
• DocuSign (DOCU) Raised to Equal-Weight at Morgan Stanley; PT $64
• Dollar General (DG) Raised to Overweight at Morgan Stanley
• Dutch Bros (BROS) Raised to Buy at Stifel; PT $35
• Equinix (EQIX) Raised to Buy at Truist Secs; PT $915
• Federal Realty (FRT) Raised to Buy at Truist Secs; PT $117
• Fluence Energy (FLNC) Raised to Outperform at BMO; PT $27
• Home Depot (HD) Raised to Overweight at Piper Sandler; PT $400
• Mid-America (MAA) Raised to Sector Perform at Scotiabank; PT $147
• Raised to Buy at Truist Secs
• NXP Semi (NXPI) Raised to Overweight at Barclays; PT $260
• Parsons (PSN) Raised to Outperform at Baird; PT $75
• Sana Biotech (SANA) Raised to Buy at HC Wainwright; PT $12
• SLM (SLM) Raised to Buy at Citi; PT $23
• Starbucks (SBUX) Raised to Overweight at Morgan Stanley; PT $120
• Target (TGT) Raised to Overweight at Morgan Stanley
• Triumph Group (TGI) Raised to Outperform at Baird; PT $20
• Valvoline (VVV) Raised to Overweight at Morgan Stanley
• Victoria’s Secret (VSCO) Raised to Overweight at Wells Fargo; PT $28
• Wayfair (W) Raised to Overweight at Morgan Stanley
• Western Digital (WDC) Raised to Overweight at Barclays; PT $65
• Raised to Buy at Deutsche Bank; PT $65
• Whitestone REIT (WSR) Raised to Buy at Truist Secs
• Wipro (WPRO IN) ADRs Raised to Neutral at JPMorgan; PT $6
• Downgrades
• Acadia Realty (AKR) Cut to Hold at Truist Secs; PT $18
• Ambrx Biopharma (AMAM) Cut to Neutral at Baird; PT $28
• Anglogold (AU) Cut to Neutral at Nedbank CIB; PT $19.83
• AvalonBay (AVB) Cut to Hold at Truist Secs
• Axonics Inc (AXNX) Cut to Equal-Weight at Morgan Stanley; PT $71
• Boeing (BA) Cut to Equal-Weight at Wells Fargo
• Boot Barn (BOOT) Cut to Hold at Williams Trading; PT $80
• Brinker (EAT) Cut to Underweight at Morgan Stanley; PT $36
• Coupang (CPNG) Cut to Neutral at Citi; PT $17
• Driven Brands (DRVN) Cut to Equal-Weight at Morgan Stanley
• DTE Energy (DTE) Cut to Peerperform at Wolfe
• Equity LifeStyle (ELS) Cut to Hold at Truist Secs
• Ferrari (RACE) Cut to Neutral at Mediobanca SpA; PT $354.84
• FMC Corp (FMC) Cut to Underperform at BofA; PT $57
• Fortinet (FTNT) Cut to Equal-Weight at Wells Fargo; PT $65
• G-III Apparel (GIII) Cut to Underweight at Wells Fargo; PT $24
• Harpoon Therapeutics (HARP) Cut to Market Perform at Cowen
• Hercules Capital (HTGC) Cut to Neutral at Compass Point; PT $17.50
• Hyatt (H) Cut to Neutral at Redburn; PT $120
• Illumina (ILMN) Cut to Hold at HSBC; PT $150
• Levi Strauss (LEVI) Cut to Equal-Weight at Wells Fargo; PT $18
• Lundin Gold (LUG CN) Cut to Neutral at SpareBank; PT C$16.93
• MasTec (MTZ) Cut to Neutral at Baird; PT $75
• NetApp Inc (NTAP) Cut to Market Perform at Raymond James
• Northrop Grumman (NOC) Cut to Neutral at Baird; PT $505
• PayPal (PYPL) Cut to Neutral at Mizuho Securities; PT $65
• Platinum Group Metals (PTM CN) Cut to Underweight at Nedbank CIB
• Prime Medicine (PRME) Cut to Hold at Stifel; PT $9
• Rent the Runway (RENT) Cut to Equal-Weight at Wells Fargo; PT 60 cents
• Rocket Cos. (RKT) Cut to Sell at Citi; PT $10
• RTX Corp (RTX) Cut to Neutral at Baird; PT $94
• SL Green (SLG) Cut to Hold at Truist Secs
• Starbucks (SBUX) Cut to Hold at Gordon Haskett; PT $100
• Sun Communities (SUI) Cut to Hold at Truist Secs
• Sweetgreen (SG) Cut to Underweight at Morgan Stanley; PT $10
• Tractor Supply (TSCO) Cut to Underweight at Morgan Stanley
• Transphorm (TGAN) Cut to Hold at Benchmark
• Wendy’s (WEN) Cut to Hold at Gordon Haskett; PT $21
• Initiations
• Callon Petroleum (CPE) Rated New Buy at Baptista Research; PT $43.60
• CES Energy (CEU CN) Resumed Strong Buy at Raymond James; PT C$6.50
• Crinetics Pharma (CRNX) Rated New Overweight at Morgan Stanley; PT $50
• Datadog (DDOG) Rated New Outperform at BMO; PT $140
• Enerflex (EFX CN) Resumed Outperform at Raymond James
• Energy Vault (NRGV) Rated New Buy at Roth MKM; PT $4
• Enphase Energy (ENPH) Reinstated Buy at Canaccord; PT $142
• Esquire Finl (ESQ) Rated New Strong Buy at Raymond James; PT $60
• Fission Uranium (FCU CN) Rated New Buy at Paradigm Capital; PT C$2
• Light & Wonder (LNW) Rated New Buy at Benchmark; PT $92
• Mullen Group (MTL CN) Resumed Market Perform at Raymond James
• Newamsterdam Pharma (NAMS) Rated New Overweight at Piper Sandler
• NEXTracker (NXT) Rated New Buy at Goldman; PT $62
• Seanergy Maritime Holdings (SHIP) Rated New Buy at B Riley; PT $11
• Secure Energy Services (SES CN) Resumed Outperform at Raymond James
• Shift4 Payments (FOUR) Rated New Outperform at KBW; PT $95
• SolarEdge (SEDG) Reinstated Hold at Canaccord; PT $80
• STEP Energy (STEP CN) Resumed Outperform at Raymond James
• Trican Well Service (TCW CN) Resumed Market Perform at Raymond James

Data sources: Bloomberg, Reuters, CQG