Daily Game Plan

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

DATA/HEADLINES:   8:30ET Housing Starts, Building Permits, Philly Fed Business Outlook, Weekly Jobless Claims; 10:15ET
ECB’s Lagarde speaks at Davos; 12:00ET Fed’s Bostic speaks on economic outlook; 1:00ET 10 Year TIPS Auction

TODAY’S HIGHLIGHTS and News:  

• More than half of Americans say they are more concerned about their financial situation than last year; 56% of Americans are living paycheck to paycheck
• Officials from US Treasury set to meet with their Chinese counterparts today
• South Korea will announce policies to boost low birth rates ahead of the April parliamentary elections
• Fed’s Bostic says inflation seems to be on path to 2% target

World stocks edged higher, as markets ignored the latest signs of escalating geopolitical tensions.  The Indian Navy rescued the crew of a US owned ship in the Gulf
of Aden after an attack by Yemen’s Houthi movement as tensions in the region’s sea lanes disrupted global trade. The US & UK carried out another round of missile strikes on Yemen. The US struck more than a dozen Houthi missile launchers in its latest response
to the Iran-backed group’s attacks on shipping. Separately, Pakistan conducted strikes inside Iran, while Tehran launched missiles at Iraq, Syria and Pakistan.

EQUITIES: 
 

US equity futures gained as investors weighed signs of economic resilience after coming to terms with the realization that rate cuts may be delayed beyond the first quarter. Tech giants
outperformed in premarket trading, with Tesla and Nvidia Corp. quoted around 1% higher. Data on unemployment claims due this morning could provide more clues about the monetary-policy outlook, after December retail sales and industrial production released
on Wednesday exceeded estimates. Housing starts probably declined in December after November’s major upside surprise.       

Futures ahead of the bell: E-Mini S&P +0.4%, Nasdaq +0.9%, Russell 2000 +0.6%, Dow -0.1%.

In pre-market trading, Chipmakers gained after Taiwan Semiconductor, the main supplier to Apple and Nvidia, said it expects a return to solid growth this quarter. Microchip Technology,
Advanced Micro Devices and ON Semiconductor Corp. added more than 2% each. Apple (AAPL) shares gain 1.7% after Bank of America upgraded its recommendation to buy.  Boeing (BA) rose 1.6% after winning an order for 150 of its troubled 737 Max jets from India’s
newest airline. Discover Financial (DFS) slides 11% after posting a 62% drop in 4Q profit. Humana Inc. (HUM) falls 12% after the company slashed its 2023 earnings outlook.  Plug Power (PLUG) drops 16% after the company filed for a possible at-the-market offering
of up to $1 billion shares. Spirit Airlines (SAVE) declines 6%, set to extend this week’s 59% drop, as the ultra-low cost airline was downgraded to sell at Citi.

European stocks rose as signs that European policy makers are uniting around a June rate reduction helped calm markets. The Stoxx Europe 600 index edged higher, having slumped almost
2% in the first three days of the week.  Among individual movers in Europe, gambling group Flutter Entertainment Plc soared more than 14% after reporting results. Cartier owner Richemont surged 10%, dragging luxury-goods peers higher, after topping analysts’
sales estimates. Watches of Switzerland, the top UK Rolex seller, plummeted over 30% after it cut forecasts. Stoxx 600 +0.5%, DAX +0.7%, CAC +0.9%, FTSE 100 +0.2%. Travel & Leisure +4.5%, Technology +2.2%. Utilities -0.6%, Food & Beverage -0.5%.      

Asian stocks were mostly higher after their biggest two-day selloff since September 2022 as Chinese shares staged a late-afternoon rebound amid speculation of exchange-traded-fund buying
by state funds. The MSCI Asia Pacific Index rose 0.3%, with technology and consumer discretionary sectors among the top gainers while cyclicals underperformed. China’s benchmark CSI 300 Index gained 1.4% amid a jump in turnover in some major ETFs. Australian
stocks fell after employment surprisingly tumbled in December. Taiwan and South Korea gained, while Japanese shares slipped. Samsung Electronics rose along with its suppliers after the Korean tech giant unveiled the Galaxy S24 product family equipped with
AI features. Hang Seng Index +0.75%, Indonesia +0.7%, Vietnam +0.6%, Shanghai Composite +0.4%, Taiwan +0.4%, Kospi +0.2%. Nikkei 225 -0.03%, Singapore -0.1%, Sensex -0.4%, ASX 200 -0.6%, Philippines -0.9%.

FIXED INCOME: 
 

Treasuries slightly richer across the curve with gains led by front-end, unwinding a portion of Wednesday’s aggressive bear-flattening move.  The yield on the policy-sensitive
two-year US note is down four basis points to 4.32% after adding 22bps in the last two days. 2s10s, 5s30s spreads re-steepening by 2bp and 2.5bp; 10-year at around 4.08%. US session includes weekly jobless claims tally and 10-year TIPS auction.

METALS: 
   

Gold rose from its lowest close in five weeks as the dollar slipped, and investors assessed the prospects of the Federal Reserve cutting rates in March. Spot Gold
+0.4%, Silver is flat.            

ENERGY:  

Oil prices nudged higher as the IEA joined OPEC in forecasting relatively strong growth in global oil demand this year, though its projection remains dramatically
lower than OPEC’s expectations.  The International Energy Agency now expects oil demand to grow by 1.24 million barrels per day in 2024, up 180,000 bpd from its previous projection, its monthly report said. However, this still represents an easing of growth
from 2.3 million b/d in 2023, driven by macroeconomic headwinds, tighter efficiency standards and an expanding electric vehicle fleet, the IEA said. WTI +0.25%, Brent +0.05%, US Nat Gas -0.8%, RBOB -0.2%.       

CURRENCIES:   

In currency markets, the US Dollar traded mixed versus Group-of-10 peers amid tight ranges as the market takes a breather. The Swiss franc extends its longest losing
streak versus the greenback since September, following comments from SNB President Thomas Jordan. The Swiss franc’s gains have become significant enough in recent weeks to materially affect the inflation outlook, according to Switzerland’s central bank chief.
The yen slipped for the first time in four days. The Aussie$ briefly fell as much as 0.4%, before reversing losses, after data showed the biggest monthly drop in full-time employment since the height of pandemic. US$ Index -0.1%, GBPUSD is flat, EURUSD -0.05%,
USDJPY -0.2%, AUDUSD +0.2%, USDCHF +0.15%, NZDUSD is flat.     

Bitcoin -0.5%, Ethereum -0.5%. 

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
• Analog Devices (ADI) Raised to Outperform at Wolfe; PT $225
• Apple (AAPL) Raised to Buy at BofA
• Fannie Mae (FNMA) Raised to Market Perform at KBW; PT $1.25
• Freddie Mac (FMCC) Raised to Market Perform at KBW; PT $1.25
• Grab Holdings (GRAB) Raised to Overweight at JPMorgan; PT $3.80
• Hertz (HTZ) Raised to Overweight at Morgan Stanley
• Microchip (MCHP) Raised to Outperform at Wolfe; PT $105
• Microsoft (MSFT) Raised to Outperform at BNPP Exane; PT $471
• NXP Semi (NXPI) Raised to Outperform at Wolfe; PT $255
• Paramount Global (PARA) Raised to Buy at CFRA
• Tempur Sealy (TPX) Raised to Overweight at Piper Sandler
• Downgrades
• Adobe (ADBE) Cut to Underperform at BNPP Exane; PT $499
• Birchcliff Energy (BIR CN) Cut to Hold at Canaccord; PT C$6
• Century Casinos (CNTY) Cut to Market Perform at JMP
• Playtika (PLTK) Cut to Underperform at BofA
• Schwab (SCHW) Cut to Market Perform at KBW; PT $70
• Shopify (SHOP CN) Cut to Underperform at BNPP Exane; PT C$95.75
• Spirit Air (SAVE) Cut to Sell at Citi; PT $4
• Taro (TARO) Cut to Neutral at HC Wainwright
• Wells Fargo (WFC) Cut to Hold at Odeon Capital
• Zoom Video (ZM) Cut to Underperform at BNPP Exane; PT $60
• Initiations
• Appfolio (APPF) Rated New Buy at Baptista Research; PT $237.60
• Badger Infrastructure Solutions Ltd (BDGI CN) Rated New Outperform at Raymond James; PT C$52
• Canfor Pulp Products (CFX CN) Rated New Sector Perform at Scotiabank
• Canfor (CFP CN) Rated New Sector Perform at Scotiabank; PT C$22
• Cloudflare (NET) Rated New Market Perform at Bernstein
• CrowdStrike (CRWD) Rated New Outperform at Bernstein
• Enbridge (ENB CN) Reinstated Hold at Stifel Canada; PT C$52
• Fabrinet (FN) Rated New Underperform at Baptista Research; PT $195.50
• Fortinet (FTNT) Rated New Market Perform at Bernstein
• Freshworks (FRSH) Rated New Hold at Baptista Research; PT $24.80
• Informatica (INFA) Rated New Hold at Baptista Research; PT $30.70
• Interfor (IFP CN) Rated New Sector Outperform at Scotiabank; PT C$29
• Jack Henry (JKHY) Rated New Neutral at Citi; PT $177
• KBR (KBR) Rated New Outperform at Baptista Research; PT $66.30
• Newamsterdam Pharma (NAMS) Rated New Buy at Guggenheim; PT $30
• Palo Alto Networks (PANW) Rated New Outperform at Bernstein
• Red Rock Resorts (RRR) Rated New Overweight at Barclays; PT $60
• SentinelOne (S) Rated New Outperform at Bernstein
• Sky Harbour Group (SKYH) Rated New Buy at B Riley; PT $15
• SPS Commerce (SPSC) Rated New Hold at Baptista Research; PT $198
• TC Energy (TRP CN) Rated New Buy at Stifel Canada; PT C$61
• West Fraser Timber (WFG CN) Rated New Sector Outperform at Scotiabank
• Western Forest Products (WEF CN) Rated New Sector Perform at Scotiabank
• Zscaler (ZS) Rated New Outperform at Bernstein

Data sources: Bloomberg, Reuters, CQG