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Pre-Market Primer: Import and Export Prices Fall; Fed's Plosser Wants to Scale Back QE

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Plosser would like to reduce asset purchases as early as June.

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Stock futures indicate that major US indices will rise slightly today as import and export prices fell and a non-voting Fed chief suggested lowering asset prices as early as possible.

Dow (INDEXDJX:.DJI) futures are up 0.08% at 15,069. S&P 500 (INDEXSP:.INX) futures are up 0.15% to 1,633.20 and future contracts on the Nasdaq (INDEXNASDAQ:.IXIC) index were up 0.05% at 2,982.50.

Import and export prices fell in April. The Bureau of Labor Statistics says that lower petroleum prices fueled 0.5% decrease in import prices. Over the last 12 months, imports fell 2.6%, the biggest year-over-year decrease since July 2012. As Abenonmics intended, the price of Japanese products fell 0.6% along with the cheap yen. Prices of US exports fell 0.7%. Economists expected export prices to fall 0.1% and imports to fall 0.5%.

In a speech today, Philadelphia Federal Reserve President Plosser said that the Fed should scale back asset purchases before halting them altogether.

"Labor market conditions warrant scaling back the pace of purchases as soon as our next meeting," he told an audience in Stockholm, referring to the next Federal Open Markets Committee meeting in June. "A precursor to an exit must be to slow and then halt the continued expansion of the balance sheet. This would not necessarily indicate that increases in the policy rate were imminent. Rather, it would indicate that efforts to increase accommodation were coming to a close."

Plosser's comments come in the wake of a revealing Wall Street Journal article that said that the Fed is looking for a way to gradually reduce its $85 billion monthly stimulus.

Plosser does not have the opportunity to vote in the FOMC until 2014.

Markets retreated in Asia and Europe today. German investor confidence increased, but by less than forecast this month. The ZEW Center for European Economic Research's index rose 0.1 point to 36.4, missing estimates of 40. Japanese stocks eased off from Monday's record-breaking session.

Finnish mobile phone company Nokia (NYSE:NOK) saw shares fall 4% today after it unveiled a new flagship phone. It unveiled the new Lumia 925, which runs Microsoft's (NASDAQ:MSFT) Windows Phone 8 operating system. It is made of metal and it is thinner and lighter than Nokia's previous offerings. It will be available first in Europe for 469 euros. When it is released in the US later, T-Mobile (NYSE:TMUS) will carry it exclusively.

SolarCity (NASDAQ:SCTY) sank 8% in the premarket, reversing yesterday's 24% gain after the second-largest solar energy company in the US posted a loss of $31 million, or $0.41 per share. SolarCity suffered outsized costs due to its policy of installing solar equipment on rooftops for little to no charge.

Hedge fund manager Dan Loeb of Third Point Capital called on Sony (NYSE:SNE) CEO Kazuo Hirai to spin off the conglomerate's entertainment unit. He also suggested splitting off Sony's insurance division.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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