Market Perspective for February 14, 2017

The volume of economic data from the United States and abroad will pick up this week. Federal Reserve Chair Janet Yellen, Atlanta Fed President Dennis Lockhart, and Richmond Fed President Jeffrey Lacker are expected to deliver prepared remarks this week. As stocks have continued to reach new all-time highs over the past month, insider buying has also increased. Strong economic reports, positive news from Fed officials, and favorable tax and regulatory reforms from the Trump Administration should continue to propel the major averages higher.

Chinese Consumer and Producer Price Index readings will be out on Tuesday. While the CPI is expected to increase 2.3 percent year-over-year, analysts are forecasting a 5.6-percent PPI increase. Domestic PPI figures are expected to rise 0.4 percent month-over-month. Eurozone fourth quarter Gross Domestic Product (GDP) estimates will also be released Tuesday. Economists are forecasting 1.8 percent growth.

U.S. CPI data and the latest oil inventory report will be available on Wednesday. Domestic consumer prices are expected to reflect 1.8 percent year-over-year rise. Analysts anticipate another large build in oil stockpiles. The Empire State Manufacturing Survey and the latest domestic retail sales figures will also be out on Wednesday. The consensus estimate is for an increase of 0.1 percent in sales. Economists are forecasting continued growth in the New York Fed region. Thursday’s weekly unemployment claims figures are expected to be slightly higher than last week’s multi-decade low. The latest Philly Fed Manufacturing Survey, also scheduled for Thursday, anticipates a marginal increase in activity.

Just over 60 percent of the S&P 500 index has reported earnings so far. T-Mobile, Express Scripts, Cisco Systems, John Deere, and Campbell Soup will report this week. T-Mobile (TMUS) is expected to report its fourth quarter results Tuesday before the opening bell. Analysts forecast that the mobile service provider will report greater market share as it benefits from consolidation in the mobile internet space. Express Scripts (ESRX) will report after markets close. Over the past year, the company has reported earnings and revenues in line with expectations. The pharmacy benefits manager should continue to benefit from an aging population, an increase in the use of generic drugs, a shift toward mail order and strong growth in its specialty drug offerings.

The only Dow component reporting this week, Cisco (CSCO) will deliver its fiscal second quarter results Wednesday after the bell. Analysts are forecasting a slight drop in year-over-year earnings per share and revenues. When John Deere & Company (DE) reports Friday, analysts will pay close attention to sales of its agricultural equipment through the global farming recession. Campbell Soup’s (CBP) quarterly returns on Friday will determine whether the recent rally in the firm’s share price was justified. Gold stocks will also be in focus with earnings reports expected from Barrick (ABX), Yamana (AUY) and Kinross (KGC).

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