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Inside the Market

Premarket: Traders await Bernanke, early selling erupts in RIM Add to ...

Markets are doing little this morning as the big event of the week draws near: the conclusion of the Fed's two-day policy meeting.

The Fed will release its latest decision on interest rates and outlook on the economy at 2 p.m. (ET), followed later by Chairman Ben Bernanke's news conference.

Traders are particularly anxious this time around to hear what Mr. Bernanke has to say, given the volatility that has erupted on worries the Fed will soon withdraw some of its stimulus to the economy - probably through tapering its $85-billion monthly bond-buying program.

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The Fed earlier dropped hints it could start that process this fall, given that keeping it in place for too long could create imbalances in the economy. But it has also suggested that decision will be contingent on economic data - especially readings on the job market and on inflation. A reading on consumer prices earlier this week was certainly subdued enough to suggest there was no need to rush into tightening monetary policy - but there have also been tangible signs of a sustained recovery in U.S. employment.

It's a risky proposition to be buying equities ahead of the Fed meeting today; any strong hints from Mr. Bernanke that the Fed's quantitative easing days are numbered could once again prompt a sell-off. That said, he'll most likely try to build up the market's confidence by suggesting the Fed will continue to do what it takes to ensure the economic recovery doesn't wane.

Now, here's a closer look at what's going on this morning and what's to come.

MARKETS:

Equities:

Futures: S&P 500 +0.1 per cent; Dow +0.1 per cent; Nasdaq +0.2 per cent

Hong Kong's Hang Seng  -1.13 per cent

Shanghai composite index -0.75 per cent

Japan's Nikkei +1.83 per cent

London’s FTSE 100 -0.16 per cent

Germany’s DAX +0.25 per cent

France's CAC 40 -0.14 per cent

Commodities:

WTI crude oil (Nymex Aug) +0.33 per cent at $99.00 (U.S.) a barrel

Gold (Comex Aug) +0.20 per cent at $1,367.10 (U.S.) an ounce

Copper (Comex Sep) -0.02 per cent at $3.17 (U.S.) a pound

Currencies:

Canadian dollar up 0.0005, or 0.05 per cent, at $0.9794 (U.S.)

Bonds:

U.S. 10-year Treasury yield 2.18 per cent, up 0.01

Canada 10-year government bond yield 2.16 per cent, up 0.01

ECONOMIC INDICATORS TO WATCH:

Statistics Canada said wholesale trade grew 0.2 per cent in April, slightly below consensus calling for a gain of 0.3 per cent.

(2 p.m. ET) FOMC meeting announcement on interest rates and economic forecasts. Followed 30 minutes later by Fed Chairman Ben Bernanke's press conference.

STOCKS TO WATCH:

Research In Motion Ltd. shares are down 3.5 per cent in the premarket, suggesting the stock may give up much of Tuesday's gains, which were sparked by RBC analysts raising their earnings and BlackBerry 10 estimates on the company. Today, there are reports that analysts at Bernstein downgraded the company to "underperform" from "market perform" with a reduced price target of $10 from $15. Bernstein reportedly believes second-half results for fiscal 2014 will disappoint, citing weak sales traction for the new BlackBerry 10 smartphones.

FedEx Corp. reported adjusted earnings of 2.13 a share, beating estimates of $1.96. It sees earnings growing 7 per cent to 13 per cent in fiscal 2014. Shares are nearly unchanged in the premarket.

Tesla Motors Inc. shares are down 2 per cent in the premarket after recalling some Model S vehicles due to a possible defect.

Earnings today include: D-Box Technologies; FedEx Corp.; and Red Hat Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

The utilities sector is seriously lagging the overall market. But don't be too worried.

Technicals and other signals suggest commodity prices are nearing a major uptrend.

Three charts that sum up the market rally since 2009.

The likely candidates to succeed the Fed's Ben Bernanke.

When searching for a new financial adviser, remember to do some googling.

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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.

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