Before the bell: Futures advance ahead of Fed

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Jennifer Dowty, a Chartered Financial Analyst, writes exclusively for Globe Unlimited subscribers. The Before the Bell report is updated throughout the premarket to reflect latest developments.

Good Wednesday morning to you.

While Greece has dominated the headlines of late, today the Federal Open Market Committee (FOMC) meeting will take centre stage.

Investors will be waiting for this afternoon's FOMC policy statement, which will be released at 2 p.m. A press conference with the U.S. Federal Reserve Chair, Janet Yellen, will follow at 2:30 p.m. While no change in interest rates is anticipated, it will be the message that is important. Investors want clarity surrounding the timing of an expected interest rate liftoff.

Many economists are forecasting a September rate increase given improving U.S. economic conditions. Any signal from the Fed that future rate hikes will be on hold, as the World Bank and the International Monetary Fund have urged the Fed to do until 2016, is likely to send U.S. equity markets higher. Yesterday, U.S. equity markets climbed higher for this reason, investors speculated that the U.S. Fed may not be in a position to raise rates in September given the Greek debt situation.

North American futures are positive but down from earlier this morning. Market action will likely be rather quiet this morning, and equity markets may remain relatively unchanged as investors wait for this afternoon's FOMC statement.

In overseas market action, Asian markets were mixed. The Nikkei closed down slightly while the Shanghai Stock Exchange composite index and the Shenzhen composite index regained their positive momentum. In Europe, markets are down slightly, while the Athens Stock Exchange General Index has stabilized, and is up slightly.

Economic news out of Europe was in-line with expectations. The United Kingdom's unemployment rate was 5.5 per cent, as expected. The Eurozone May consumer price index was up 0.2 per cent month-over-month and up 0.3 per cent year-over-year, spot on with forecasts. The Eurozone core consumer price index increased 0.9 per cent, again meeting economists' forecasts.

Crude oil could see some price action today. At 10:30 a.m. the U.S crude oil inventory data will be released by the U.S. Energy Information Administration. Last week, U.S. crude oil inventories decreased by 6.8 million barrels from the previous week. Today, the street is expecting a decline of 1.5 million barrels. A larger decline could give oil prices a lift, as this would indicate that inventory levels are being worked down.

Here's the bottom line: Markets continue to vacillate on speculation as there is no clarity. One day markets are tumbling and, as we saw yesterday, markets stabilized and actually climbed higher in the U.S. suggesting that until there is clarity investors can expect volatility.

Now, here's a rundown on how the markets are shaping up.

MARKET DATA:

Futures
S&P 500 +0.07 per cent; Dow +0.12 per cent; Nasdaq +0.01 per cent

Equities
Hong Kong's Hang Seng +0.71 per cent
Shanghai composite index +1.65 per cent
Japan's Nikkei -0.19 per cent
London's FTSE 100 -0.58 per cent
Germany's DAX -0.56 per cent
France's CAC 40 -0.97 per cent
Stoxx 600 -0.65 per cent

Commodities
WTI crude oil (Nymex July) +1.67 per cent at $60.97 (U.S.) a barrel
Gold (Comex Aug.) -0.18 per cent at $1,178.80 (U.S.) an ounce
Copper (Comex Sept.) +0.80 per cent at $2.62 (U.S.) a pound

Currencies
Canadian dollar at 81.27 (U.S.), -0.0011
U.S. dollar index -0.08 at 94.88

Bonds
U.S. 10-year Treasury yield 2.33 per cent, +0.015

ECONOMIC INDICATORS:

Japan trade balance. Plus, Euro area consumer price index and core CPI

(8:30 a.m. ET) Canada wholesale trade for April. Consensus is an increase of 0.3 per cent from March.
(2 p.m. ET) U.S. Federal Open Market Committee announcement and summary of economic projections
(2:30 p.m. ET) U.S. Fed chair Janet Yellen's quarterly economic briefing.

STOCKS TO WATCH:

A liquefied natural gas consortium led by Royal Dutch Shell PLC is expected to receive B.C. environmental approval within days as the group positions itself to be one of the first LNG exporters in the province. LNG Canada's plans to export from Kitimat are being reviewed by two B.C. cabinet ministers, who are slated to announce by Monday whether they will grant a provincial environmental assessment certificate.

Canadian oilfield services provider Calfrac Well Services Ltd. halved its quarterly dividend to 6.25 cents per share, citing lower crude oil prices and weak demand for oilfield services. Calfrac's board also approved an additional capital of about $12-million for 2015 to expand in Latin America, the company said on Wednesday.

Starbucks Corp., the world's biggest coffee chain, said it would close all 23 of its La Boulange retail locations by the end of September as the stores were not sustainable for its long-term growth. The company will continue to sell La Boulange items such as blueberry scones, iced lemon pound cakes and marshmallow dream bars at its outlets across the United States and Canada, it said.

UrtheCast Corp., a Vancouver-based company that has staked out the high ground – literally – in its bid to open up the Earth observation industry, says it is ready to switch on a continuous video feed of the planet from the International Space Station. The feed will be available to anyone with an Internet connection.

Earnings include: Actuant Corp.; Clarcor Inc.; FedEx Corp.; Jabil Circuit Inc.; Oracle Corp.; Pier 1 Imports Inc.

ANALYST ACTIONS:

FBR Capital downgraded Standard Pacific (SPF-N) from "Outperform" to "Market Perform."

Goldman Sachs upgrades Coca Cola Femsa (KOF-N) to "Buy."

BTIG initiated coverage on World Wrestling Entertainment (WWE-N) with a "Buy" rating and a price target of $25.

BMO Capital downgraded AXIS Capital (AXS-N) from Outperform to Market Perform with a price target of $59.

Brean Capital analyst Sarah Hindlian reiterated a "Buy" rating and boosted her price target on Facebook (FB-Q) to $108.