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Premarket: Recent rally looking shaky ahead of Fed action

Ben Bernanke has the starring role in markets today -- and investors are starting to feel a little concerned that his performance may not quite live up to expectations.

North American markets are poised to open modestly in the red this morning, as they await Mr. Bernanke's monetary policy statement and news conference this afternoon. With the Dow hitting five-year highs this week, investors seem to have priced in significant action from the Federal Reserve, with many speculating there will be another round of large-scale asset purchases similar in size as 2010's $600-billion (U.S.) second quantitative easing program. Mr. Bernanke may also today extend his near-zero interest rate policy into 2015.

But there's also speculation that the Fed isn't going to pull out all the stops, and instead may decide to wait until the so-called Operation Twist program expires at year end to ignite further stimulative measures, or wait until there are signs of further economic chaos in Europe.

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Regardless, both his actions today and words will be heavily scrutinized, and it seems unlikely markets will stray too far from unchanged until the Fed starts revealing its latest actions at 1230 p.m. (ET) this afternoon. Futures were sticking to mild losses as a number of economic reports were released at 0830 a.m. (ET), including a higher-than-expected rise of 15,000 in U.S. jobless claims to 382,000. The bump up was blamed on hurricane Isaac.

Indeed, today's economic data, detailed below, appear to support further action from the Fed.

Here's the rundown of what else you need to know as the investing day gets underway.


Futures: Dow -0.2 per cent, S&P 500 -0.2 per cent, Nasdaq -0.3 per cent

Hong Kong's Hang Seng index -0.14 per cent

Shanghai Shenzhen CSI 300 -0.78 per cent

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Japan's Nikkei +0.39 per cent

London's FTSE 100 -0.99 per cent

France's CAC 40 -0.90 per cent

Germany's DAX index -0.37 per cent

WTI (Nymex Oct) +0.32 per cent at $97.32 (U.S.) a barrel

Gold (Comex Dec) +0.005 per cent at $1,733.80 (U.S.) an ounce

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Copper (Comex Dec) 0.14 per cent at $3.69 (U.S.) a pound

Canadian dollar unchanged at 1.0247 (U.S.)


U.S. released jobless claims for the week ended Sept. 8 showing a rise of 15,000 to 382,000. This was more than expected but largely blamed on hurricane Isaac.

U.S. released producer price index for August, with a reading of 1.7 per cent, higher than the consensus of 1.4 per cent. A lot of this was blamed on higher gasoline prices.

Statistics Canada reported on the capacity utilization rate in the second quarter, with a reading of 81.0 per cent, up half a percentage point from the first quarter. It was in line with economist forecasts.

Statscan reported on the new housing price index in July, coming in as forecast at plus 2.3 per cent year over year.

(1230 p.m. ET) U.S. fed issues policy statement on interest rates. The market expects the fed funds target will be left at a range of zero to 0.25 per cent; some believe guidance will extend beyond 2014. Watch for an announcement of quantitative easing at this time.

(215 p.m. ET) Press conference with the Fed's Ben Bernanke.

Intel and Advanced Micro Devices look set for weaker openings after Citigroup downgraded its ratings on both computer chip makers. Intel is down 0.6 per cent in the pre-market and AMD is down 2.8 per cent.

Transat AT returned to profitability in its third quarter and it says the outlook for the fourth quarter has improved.

Empire Company, owner of Sobeys, says its first-quarter profit rose to $108.9 million or $1.60 per share, up from $89.2 million or $1.31 per share a year earlier.

Other earnings out today include Patheon


If only Canada was more like Greece. The Athens market has gained 63.4 per cent since early June.

A meaningful number of U.S. carrier retail locations have had not sold a single BlackBerry in over a month, according to one analyst's store checks.

...But there are some countries where the BlackBerry is still king -- of pop culture at least.

It's not the new and improved features of the iPhone 5 that got the most attention from Wall Street analysts Wednesday, but rather the mass global rollout of the new device and the speed of that availability around the world.

A new ETF launches today that focuses on frontier markets -- those countries that are considered to be among the smallest, least mature and least liquid.

Robert Shiller and Barclays launch new indices based on low cyclically adjusted price-to-earnings, or CAPE.

Wall Street appears to be planning for a victory by President Obama but hoping for one by Mitt Romney, according to a CNBC poll.

Demographics are about to shift in favour of stocks for the first time since the 1990s.

The stock market may actually like government gridlock in the U.S.

U.S. pension funds are falling out of love with commodities.

The highest-yielding S&P 500 stocks that are going ex-dividend.

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