Market Perspective for April 10, 2017

The Nasdaq opened the week only 0.7 percent away from another new all-time high, while the broader market saw very slight gains on Monday as stocks attempt to break out of a six-week consolidation phase.
Weekly jobless claims, producer prices for March and the University of Michigan consumer sentiment reading for April will be out on Thursday, and most developed markets will be closed on Friday in observance of Good Friday. Initial claims for unemployment are expected to remain low at 245,000, while producer price inflation anticipates a pause in March.
Core CPI rose 0.2 percent in March. March retail sales are expected to have fallen 0.3 percent, but to have increased 0.1 percent ex-autos. Economists forecast business inventories for February to climb to 0.3 percent.
This week’s overseas data will include Chinese CPI and PPI numbers for March, and Chinese trade data. Economists forecast Chinese producer prices climbed 7.6 percent versus March 2016. Although the year-on-year number is high, monthly Chinese inflation has been decelerating rapidly as commodity prices stabilize. Japanese industrial production for February will be out on Friday and is expected to show a healthy 2 percent increase.
The 10-year Treasury yield remains near the bottom of its four-month trading range. The yield dipped below 2.3 percent last week, signaling a potential breakout rally in bonds, but has since moved up to 2.36 percent. The U.S. Dollar Index followed yields higher and hit 101 on Friday, reversing nearly all of its losses since the Federal Reserve hiked interest rates in March.
First quarter earnings season kicks off this week with Delta Airlines (DAL) on Wednesday. Analysts forecast earnings per share of $0.73 in the quarter, down from $1.32 a year earlier. On Thursday, J.P. Morgan Chase (JPM) is expected to report earnings of $1.51 per share, a better than 10 percent gain on last year’s $1.35, on revenues of $24.9 billion. The consensus is for earnings per share of $0.97 at Wells Fargo (WFC), on revenues of $22.3 billion. WFC earned $0.99 per share in the year-ago quarter. Analysts forecast $1.24 per share at Citigroup (C), also a better-than 10 percent increase versus last year, on revenues of $17.8 billion.
Regional banks will also report on Thursday, including PNC Financial Services (PNC), First Republic Bank (FRC) and Commerce Bancshares (CBSH). Taiwan Semiconductor (TSM) is a major holding in some technology and semiconductor funds, as well as iShares MSCI Taiwan (EWT). Analysts are looking for $0.53 per share versus $0.38 a year ago, an increase of 39 percent.

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