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Pre-Market: Amazon Expected to Reveal 3D Smartphone Today; Janet Yellen to Speak Following FOMC Policy Decision


The US current account deficit increased in the first quarter.

Stock futures pointed toward a slightly higher open on Wednesday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.01% to 16,730. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.13% to 3,777.25.  Futures on the S&P 500 (INDEXSP:.INX) were up 0.01% to 1,934.


Amazon (NASDAQ:AMZN) is widely expected to be revealing its 3D smartphone today at an event in Seattle. Beyond 3D capabilities -- which utilize infrared cameras to track the position of a user's face and work without the need for 3D glasses -- the  phone will have a gesture control feature that allows users to operate their phones and play games without using the screen. But, as often is the case with Amazon, the hardware isn't what matters. Journalist Steve Ranger put it this way on ZDNet:

Amazon's strategy isn't about making money out of the hardware itself; that's not the point. The point is to lock the customer in to its shopping and content ecosystem. And that ecosystem continues to grow steadily. Last week, Amazon added a music streaming service to Amazon Prime -- a service that would fit in very nicely if you were about to launch a new smartphone.

AT&T (NYSE:T) has been chosen as the phone's exclusive carrier in the US, and Amazon is reportedly in talks with Vodafone (NASDAQ:VOD) and O2 (OTCMKTS:OTOW) to provide service in Europe. Shares of Amazon rose 0.66% in pre-market trading.

Hennes & Mauritz AB (OTCMKTS:HNNMY), owner of the H&M retail store chain, reported its strongest quarterly profit in over four years. New store formats and online expansion helped fuel growth for Europe's second largest clothing seller. Net income rose 25% to $870 million, beating analyst estimates. In other earnings news, FedEx (NYSE:FDX) is slated to report earnings this morning, with investors expecting a rise in earnings growth on an improving economy. Shares of FedEx rose 3.06% in pre-market trading.

Citigroup (NYSE:C) paid a record $697 million for a 512,000-square-foot office building in Hong Kong, a record sale for the city. The tower, which will be completed in 2015 and house 5,000 Citigroup employees, was bought from a unit of Chinese property developer Wheelock & Co (OTCMKTS:WHLKF). The sale could signal a comeback for Hong Kong's property market, which has been plagued by high rents and vacancies.

Financial data provider Markit will hold its initial public offering today and expects $23 to $25 per share. The London-based information source for everything from accounting firms to central banks has already garnered investment from JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), and Deutsche Bank (NYSE:DB). The company could earn a $4.47 billion valuation at the top of the range.


Mortgage applications fell over the past week as interest rates moved higher. The Mortgage Bankers Association reported a 5% decrease in its purchase index and a 13% decrease in its refinancing index for the week of June 13. The United States' current account deficit increased to $111.2 billion in the first quarter, or 2.6% of the GDP. That's up from 2.0% in the fourth quarter of 2013. The Energy Information Administration delivers its weekly report on the United States' petroleum inventories at 10:30 a.m. At 2:00 p.m., the Federal Open Market Committee policy meeting wraps up and any updates to the Fed's policy rates will be announced -- these are widely expected to remain unchanged, with the Fed's taper to remain on schedule with another $10 billion in monthly reductions. The FOMC will also release its economic forecasts for the next three months at 2:00 p.m. At 2:30 p.m., Federal Reserve Chairperson Janet Yellen will hold a press conference.

Global Markets

Asian stocks moved lower overnight ahead of the FOMC announcement, with energy stocks seeing the lowest dips. The exception was in Japan, where stocks rallied and the Topix index hit a five-month high. Japan saw its exports decrease 2.7% in May on weak US and Asian demand,  the first time in 15 months that exports have fallen for the country. In China, average home prices across the country rose 5.6% in May year-on-year, lower than the 6.7% a month earlier. The rise was the lowest seen in China in the past 13 months.

European stocks remained flat ahead of the FOMC meeting. The European Central Bank published a paper saying the basis for Forex benchmarks could be too small, just as the EU is approving a law to regulate market benchmarks. The Bank of England has said that an interest rate increase is more likely than most investors are expecting. The presidents of Russia and Ukraine met to discuss a cease-fire in southeastern Ukraine where conflict has most recently seen a gas pipeline set ablaze.

Two days after the US Supreme Court ruled that Argentina needed to repay debts it defaulted on in 2001, Standard & Poor's Rating Services lowered its long-term foreign currency rating on Argentina to CCC-. 

Twitter: @brokawbrokaw
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