Market Perspective for June 6, 2016

Janet Yellen remained relatively positive in today’s speech before the World Affairs Council of Philadelphia. She did not indicate the specific timing for rate hikes, but Friday’s subdued jobs report may delay any changes.

Stocks continue to perform well and most data argues for a rate increase based on Fed officials’ public statements. The labor market has also been very strong, including rising wage growth, which is a key metric for Fed officials concerned about inflation.

The Fed will release its April consumer credit report on Tuesday and is expected to show an increase of $18 billion. Productivity and unit labor costs for the first quarter will also be released. Both of these numbers impact wage growth. Weekly crude inventory data will be released on Wednesday. The report is expected to state a small decline.

The mortgage application index and the Job Openings and Labor Turnover Survey (JOLTS) will also be released on Wednesday. Thursday’s initial unemployment claims figures will better inform the market with fresh data. Economists forecast 270,000 initial claims.  Wholesale inventories for April are out on Thursday as well. This number directly impacts GDP estimates. The University of Michigan Consumer Sentiment Index is due out Friday. The consensus estimate is for a reading of 94.5.

Athletic apparel company lululemon athletica (LULU) is expected to report earnings per share of $0.31 on revenues of $487.7 million on Wednesday. FuelCell Energy (FCEL) is scheduled to report a net loss of $0.40 per share on revenue of $35 million. The company’s stock rallied in May after announcing a joint project with Exxon Mobile. The two firms are working on a new method to capture power plant carbon dioxide emissions. Investors will focus on client volume when the tax preparation services company H&R Block (HRB) delivers earnings Thursday. The consensus estimate is for an EPS of $3.16 on revenues of $2.29 billion.

Overseas, the latest eurozone GDP numbers will be available on Tuesday. The Chinese trade balance for May will also be released. Estimates call for a decline in both Chinese exports and imports. The trade balance is expected to be near-record highs at a positive $58 billion. Chinese CPI and industrial production will be out on Wednesday, which is expected to fall from 3.4 percent in April to 3.3 percent in May.

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