Stock Futures Creep Higher Even as More Join Chorus for June Rate Hike
Philadelphia (May 24) The central bank could raise rate two or three times this year, Philadelphia Fed President Patrick Harker said on Tuesday, backing up recent calls suggesting a rate hike could come as soon as June.
"Although I cannot give you a definitive path for how policy will evolve, I can easily see the possibility of two or three rate hikes over the remainder of the year," Harker told an audience in Philadelphia on Monday. "If the data comes in and it's not that consistent with my view of the strength in the economy, then I would pause, but otherwise, I think a June rate increase is appropriate."
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A rate hike in June now has a roughly 30% probability, according to CME Group, after starting the month with odds of less than 10%. The Federal Open Market Committee's next meeting is June 14-15.
Best Buy (BBY) fell 6% after forecasting a weaker-than-expected second quarter and announcing the departure of Chief Financial Officer Sharon McCollam, effective June 14. The electronics retailer expects second-quarter earnings between 38 cents and 42 cents a share, short consensus of 50 cents. Best Buy also expects full-year sales and earnings to come in flat for the year.
Autozone (AZO) was slightly lower after a disappointing third quarter tied to rough weather in Midwestern, Middle Atlantic, and Northeastern states. The auto parts retailer reported a 4% sales increase to $2.59 billion, though revenue fell short of consensus of $2.65 billion. Same-store sales rose 2% in the third quarter, compared to 2.3% in the year-ago period.
Toll Brothers (TOL) gained 3% in premarket trading after posting a better-than-expected second quarter. Profit-per-share rose to 51 cents from 37 cents in the year-ago quarter, topping estimates of 46 cents. Revenue surged 31% to $1.12 billion. Toll Brothers has benefited from a robust housing sector which has seen resilient construction growth despite a downturn elsewhere in the economy.