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Pre-Market Primer: JPMorgan Probed for Hiring Chinese Scions; Stocks and Treasuries Fall


Bond yields are up sharply as investors fear the taper.

Stock futures are mixed and Treasury yields continue to rise this morning as investors hold their breath for this Wednesday's Federal Open Market Committee meeting minutes.

US stock index futures might extend last week's losses today. Before the opening bell, Dow (INDEXDJX:.DJI) futures were down 0.06% to 15,029 while futures contracts on the S&P 500 (INDEXSP:.INX) fell 0.11% to 1,649.30. Nasdaq (INDEXNASDAQ:.IXIC) futures ticked up 0.03% to 3,070.75.

No US economic indicators are due out today, but the Treasury will auction short-term debt. The yield on US 10-year Treasuries spiked last week to 2.824%, the highest close since July 2011. This morning, yields have reached 2.86% as investors are nervous about the future of the Federal Reserve's monetary stimulus program. Though Chairman Ben Bernanke stresses that tapering off asset purchases is contingent on economic data, investors fear that it will happen next month.

The Fed's policy committee might give more hints on its plans when it releases the minutes of its July 30-31 meeting on Wednesday afternoon. On Thursday, the world's central bankers and financial titans will gather in Jackson Hole, Wyoming.

Along with Treasuries, gold prices are also rising. Spot gold was up 0.09% today to $1,372.30. Barrick Gold (NYSE:ABX), the largest gold producer, rose 1.4% in the pre-market to $19.59 per share.

European markets declined. Japanese stocks fared better, with the Nikkei (INDEXNIKKEI:NI225) gaining 0.79%. Japan announced that it had its third largest ever monthly trade deficit in July, thanks to energy imports and the yen's diminishing strength. Imports rose 19.26% while imports rose 12.2%. Exports to Europe rose 16.6% while exports to the US rose 18.4%.

The SEC will investigate allegations that came out this weekend that JPMorgan Chase (NYSE:JPM) gave the children of Chinese officials plum jobs in a quid pro quo to win contracts in China. In one instance, it hired the son of Tang Shuangning, a former banking regulator who is now chairman of Everbright Group, a state-sponsored company. Subsequently, JPMorgan won work from Everbright. In another instance, it hired the daughter of a railway official shortly before advising China Railway Group (HKG:0390) on its 2007 public offering.

Urban Outfitters (NASDAQ:URBN) will release earnings after the bell today. Analysts see the retailer's earnings rising 14% to $0.48 per share and expect sales to rise 13.5% to $768.06 million. Shares pulled ahead 0.2% before the market open.

Twitter: @vincent_trivett
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