The following setting detail reveals the celebratory mood: “He looks around, indicating the streamers, balloons, and cake.”
This sentence describes the surroundings; in this case, the way the room was decorated for a party. "Streamers," "balloons" and "cake" are what you traditionally find at a birthday party, for example.
Since this is a play, stage directions like this one tell the director what kind of props to put on stage to create the party mood required for the scene.