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Pre-Market Primer: Futures Rise Ahead of Fed Meeting, New iPhone Announcement Set


Will the Fed go preemptive?

MINYANVILLE ORIGINAL Ahead of today's FOMC meeting, stock indices are looking up.

The Fed might pull a page from Alan Greenspan's book and move towards "preemptive stimulus," and take more aggressive action than the central bank's forecasts would require.

In a June speech, Fed vice chairwoman Janet Yellen hinted that further action might be necessary to reduce risk.

"There are a number of significant downside risks to the economic outlook, and hence it may well be appropriate to insure against adverse shocks that could push the economy into territory where a self-reinforcing downward spiral of economic weakness would be difficult to arrest," she said. Most economists are expecting nothing more than an extension of rates.

US personal incomes rose 0.5% in June after a 0.2% rise in May. Spending stayed flat for the second straight month, however.

Stock futures pointed towards a higher opening. Dow (^DJI) and S&P 500 (SPY) futures both rose 0.15% to 13,021.00 and 1,382.60, respectively. Nasdaq (^IXIC) futures gained 0.30% to 2,643.75.

Asian stocks ended the day higher. Japan's unemployment rate fell to 4.3% from 4.4% in June, as household spending in the country fell 0.8% from May, but rose 1.6% on a yearly basis. China announced that it will pump more money into the country's railway infrastructure and increased investment in health care and utilities to nudge its economy away from a slowdown.

The unemployment rate for the eurozone rose to a record high of 11.2% in June from 11.1% in May. The figure for Germany stayed flat at 6.8%, but the number of people out of work rose by 7,000. In Italy, the jobless rate hit a 13-year high of 10.8%.

Retail sales in Spain fell by 5.2% on a yearly basis, the 24th straight month of declining sales in the country. German sales unexpectedly fell 0.1% while economists predicted that after two months of declines, pent-up demand would raise retail sales by 0.5% over May.

Apple (AAPL) is stocking up on components for the next generation of the iPhone, according to the company's latest 10-Q. The build up in inventory component prepayment definitely points towards a new product launch. AllThingsD confirmed reports in Apple fan blog iMore that this product launch will likely take place on September 12, 2012.

British Petroleum (BP) shares fell 4.42% after writing down assets by $5 billion. The company's adjusted profit fell 96% in the second quarter because of the writedown, but even excluding these one-time charges, profits were still weak. The current quarter is also expected to be lean due to maintenance.

Twitter: @vincent_trivett
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