Barchart Morning Call

Sep E-mini S&Ps (ESU17 +0.13%) this morning are up +0.14% on strength in energy producing stocks with Jul WTI crude oil (CLN17 +1.03%) up +0.61%. European stocks are up +0.32% ahead of Sunday’s second round of elections in France that are expected to hand President Macron an overwhelming legislative majority. Asian stocks settled mixed: Japan +0.56%, Hong Kong +0.24%, China -0.30%, Taiwan +0.68%, Australia +0.19%, Singapore -0.02%, South Korea +0.03%, India -0.06%. Japanese stocks settled higher as strength in exporter companies led the overall market higher on improved earnings prospects for exporters after USD/JPY rose to a 2-week high when the BOJ left monetary policy unchanged. The Chinese yuan fell to a 2-week low against the dollar after the PBOC injected a net 250 billion yuan through reverse-repurchase agreements the most in 5 months, as it boosts the supply of cash in the financial system to alleviate a cash squeeze caused by regulatory checks on banks.

The dollar index (DXY00 -0.07%) is down -0.12%. EUR/USD (^EURUSD) is up +0.31%. USD/JPY (^USDJPY) is up +0.32% at a 2-week high.

Sep 10-year T-note prices (ZNU17 -0.06%) are down -2 ticks.

As expected, the BOJ decided by a 7-2 vote to keep a negative interest rate of -0.1% to the balances in current accounts held by financial institutions at the central bank and the BOJ will continue to purchase Japanese government bonds so that 10-year JGB yields remain at around 0%. The BOJ’s overall assessment of the economy remained unchanged from the last meeting, saying it was “turning toward a moderate expansion.”

As expected, the Bank of Russia cut its key interest rate by -25 bp to 9.00% from 9.25%.

Key U.S. news today includes: (1) May housing starts (expected +3.9% to 1.218 million, Apr -2.6% to 1.172 million), (2) prelim-June University of Michigan U.S. consumer sentiment (expected -0.1 to 97.0, May +0.1 to 97.1), (3) Dallas Fed President Robert Kaplan (voter) speaks to the Park Cities Rotary Club.

Notable Russell 2000 earnings reports today include: none.

U.S. IPO’s scheduled to price today: none.

Equity conferences this week: none

Planet Fitness (PLNT +0.67%) was added to the U.S. ‘Focus List’ at William O’Neil.

Square (SQ +2.22%) lost over 1% in pre-market trading after it was downgraded to ‘Neutral’ from ‘Outperform’ at Credit Suisse.

Celgene (CELG -0.36%) was upgraded to “Outperform’ from ‘Market Perform’ at Leerink Partners LLC.

Stanley Black & Decker (SWK -0.44%) was initiated with a ‘Buy’ rating at Seaport Global Securities with a 12-month target price of $160.

Cal-Maine (CALM -1.39%) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs with a price target of $31.

Shire PLC (SHPG -0.81%) was initiated with a recommendation of ‘Overweight’ at Wolfe Research with a 12-month target price of $222.

Aclaris Therapeutics (ACRS -1.95%) was initiated with an ‘Overweight’ rating at Cantor Fitzgerald with a 12-month target price of $50.

Microchip (MCHP -0.89%) was initiated with an “Outperform’ rating at Raymond James with a 12-month target price of $95.

Booz Allen Hamilton Holdings (BAH -0.51%) sank over 10% in pre-market trading after the company said the U.S. Justice Department is investigating its cost accounting and charging practices.

Valeant Pharmaceuticals International (VRX -2.73%) rose over 1% in after-hours trading after it was initiated with an ‘Overweight’ rating at Cantor Fitzgerald with a 12-month target price of $18.

Finisar (FNSR +1.50%) bounced back from a 10% loss in after-hours trading and rose over 5% after management said on an earnings call that they remain optimistic about fiscal 2018 and expect revenue growth to resume in Q2 driven by sales of 100-gigabit transceivers for hyper-scale data centers and arrays for 3D sensing. Finisar had fallen 10% after it reported Q4 revenue of $357.5 million, less than consensus of $359.6 million, and said it sees Q1 revenue of $330 million-$350 million, below consensus of $366.2 million.

Horizon Pharma Plc (HZNP -5.12%) gained almost 2% in after-hours trading after it was initiated with an ‘Overweight’ rating at Cantor Fitzgerald with a 12-month target price of $13.

Adamis Pharmaceuticals (ADMP +53.33%) rose over 2% in after-hours trading, after it surged over 50% in Thursday’s session, when it received approval from the FDA for its epinephrine pre-filled syringe for the emergency treatment of allergic reactions.

Sep E-mini S&Ps (ESU17 +0.13%) this morning are up +3.50 points (+0.14%). Thursday’s closes: S&P 500 -0.22%, Dow Jones -0.07%, Nasdaq -0.46%. The S&P 500 on Thursday closed lower on weaker tech stocks, long liquidation, political uncertainty, and the Fed’s intent to continue with its rate-hike regime. In addition, U.S. May manufacturing production fell by -0.4%, weaker than expectations of +0.1%.

Sep 10-year T-notes (ZNU17 -0.06%) this morning are down -2 ticks. Thursday’s closes: TYU7 -9.00, FVU7 -6.00. Sep 10-year T-notes on Thursday closed lower on signs of strength in the U.S. labor market after weekly jobless claims fell -5,000 to 237,000, more than expectations of -4,000 to 241,000. In addition, there was a +20.8-point increase in the U.S. Jun Empire manufacturing index to 19.8, the highest in 2-3/4 years.

The dollar index (DXY00 -0.07%) this morning is down -0.116 (-0.12%). EUR/USD (^EURUSD) is up +0.0034 (+0.31%) and USD/JPY (^USDJPY) is up +0.35 (+0.32%) at a 2-week high. Thursday’s closes: Dollar index +0.494 (+0.51%), EUR/USD -0.0073 (-0.65%), USD/JPY +1.35 (+1.23%). The dollar index on Thursday rose to a 2-week high and closed higher. The dollar was boosted by the stronger-than-expected U.S. jobless claims report and Jun Empire manufacturing index.

Jul WTI crude oil prices (CLN17 +1.03%) this morning are up +27 cents (+0.61%) and July gasoline (RBN17 +1.69%) is +0.0209 (+1.46%). Thursday’s closes: Jul crude -0.27 (-0.60%), Jul gasoline +0.0030 (+0.21%). Jul crude oil and gasoline on Thursday settled mixed with Jul crude at a 1-1/4 month low. Crude oil prices were undercut by a stronger dollar and by negative carry-over from Wednesday’s EIA data that showed a -1.66 million bbl decline in EIA crude inventories (vs expectations of -2.4 million bbl) and an unexpected +2.1 million bbl increase in EIA gasoline stockpiles (vs expectations for a -1.15 million bbl decline). Gasoline closed higher after operations were halted at Pemex’s Salina Cruz 330,000 bpd refinery, Mexico’s largest refinery, due to an ongoing fire.