PickAlpha Evening Insights | 2026-01-07 - Three Trades For Tomorrow
• Stocks mixed, yields higher as ISM services and prices-paid surprise toward firmer inflation. • After-hours: Constellation beat and Applied Digital missed revenue; AZZ declared a dividend. • Etc.
Market Wrap
Market Recap — Stronger-than-expected ISM services and a jump in Prices Paid set a firmer inflation tone today, while JOLTS showed cooling openings alongside rising hires and quits; ADP payrolls were modest and factory orders slipped. Energy inventories drew modestly, supporting crude supply tightness. After the close Constellation topped estimates, Applied Digital missed revenue, and AZZ announced a cash dividend.
Intraday — ADP reported a 41k private payrolls gain and 4.4% y/y pay growth for job-stayers at 08:15 ET; the ISM services PMI unexpectedly rose to 54.4 with Prices Paid at 64.3, boosting rate sensitivity; factory orders fell 1.3% in October and JOLTS showed openings declined to about 7.08mn while hires and quits rose, weighing on growth/rate dynamics; the EIA weekly showed a 3.8mb draw in commercial crude and 94.7% refinery utilization.
After Hours — Constellation Brands reported a fiscal Q3 beat on adj. EPS (3.06 vs 2.63 est.) and held FY guidance, Applied Digital posted a slightly smaller loss but missed revenue expectations, and AZZ declared a $0.17 quarterly dividend payable Feb. 3.
Three Trades For Tomorrow
1/3 Long 10Y U.S. Treasury Note Futures (CBOT) ($ZN=F) — If the Initial Jobless Claims print at 08:30 ET on Jan 8, 2026 is 230k or higher (vs 213k forecast), go long ZN=F between 08:31–08:40 ET. Target a +0.4% price gain by the Jan 8 close; place a stop-loss at -0.25%…
Initial Jobless Claims are forecast at 213k vs a 199k prior reading. A print at or above 230k would signal a notable softening in the labor market relative to expectations. That would typically support Federal Reserve rate-cut pricing, lower yields, and higher Treasury futures. Going long ZN=F immediately after such a downside surprise expresses that macro view.
Trade credibility: actionability 8.0 | timeliness 9.0 | clarity 8.0
2/3 Long $STZ — On Jan 8, 2026, if between 09:35–10:00 ET STZ trades between -1% and +1% versus its Jan 7 close, enter long. Target +3% versus entry by Jan 9 close; place a stop-loss at -2% versus entry. Close any remaining position at Jan 9, 2026 close.
Constellation Brands posted a solid fiscal Q3 beat, with adjusted EPS 3.06 vs 2.63 consensus and net sales about 2.22bn vs 2.20bn, while maintaining full-year EPS guidance. That combination suggests resilient demand and credible guidance. A muted early reaction would offer an attractive entry for investors rewarding earnings quality in a stable consumer franchise.
Trade credibility: actionability 8.0 | timeliness 8.0 | clarity 8.0
3/3 Long 10Y U.S. Treasury Note Futures (CBOT) ($ZN=F) — On Jan 8, 2026, enter long ZN=F at 08:25 ET ahead of the 08:30 ET BLS Productivity & Costs release. Target a +0.25% price gain; place a stop-loss at -0.15% versus entry. Close the entire position no later than 08:50 ET…
The BLS Productivity & Costs report directly affects views on unit labor costs and productivity, key inputs to wage-driven inflation. Surprises can quickly move Treasury markets as traders reassess real growth and inflation trajectories. Pre-positioning long ZN=F just before the release seeks to capture a typical volatility uptick, with tight intraday risk controls limiting adverse moves.
Trade credibility: actionability 8.0 | timeliness 8.0 | clarity 8.0