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Pre-Market Primer: Bernanke Goes to the Hill; FOMC Minutes On Tap

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Central banks of the UK and Japan are staying the course. Will the Fed follow?

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Stock futures are up slightly this morning as investors wait for smoke signals from Ben Bernanke.

With the economic calendar quiet, the markets' attention will be fixed on Federal Reserve Chairman's testimony before the Joint Economic Committee of Congress, starting at 10 a.m.

At 2 p.m., the Federal Open Markets Committee releases its latest minutes. Any hint of a forthcoming end to quantitative easing could rock the markets today. Recently, several Fed chiefs have publicly advocated tapering off the asset purchase program as economic data improves.

Also at 10 a.m., a report on April existing home sales comes out. Economists expect to see a 1.4% rise to a seasonally adjusted annualized rate of 5 million sales.

Dow (INDEXDJX:.DJI) futures were up 0.13% at 15,375 before the opening bell. S&P 500 (INDEXSP:.INX) futures rose 0.22% to 1,669.20 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.26% to 3,029.25.

Japan's central bank voted to maintain its aggressive stance and praised 'Abenomics' for the improving exports, spending, and investment.

"Such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan's economy to overcome deflation that has lasted for nearly 15 years," the Bank of Japan said in a statement.

The Bank of England also voted to stay the course, with rates unchanged and a third of members voted to increase asset purchases.

Yesterday Apple (NASDAQ:AAPL) CEO Tim Cook was grilled by Congress for its controversial tax practices. Much of it hinged on Ireland's policy of not taxing companies that are administered abroad. Thanks to the Irish loophole, Apple paid an effective rate of 2% on its $74 billion overseas income without breaking a single country's laws. France and the UK are increasingly critical of other high-profile companies such as Starbucks (NASDAQ:SBUX) for legal tax-dodging.

At today's European Union summit in Brussels, leaders are likely to address these loopholes. Tax evasion costs the European Union 1 trillion euros per year.

This afternoon, Hewlett-Packard (NYSE:HPQ) is likely to post a drop in sales and profits. Analysts are predicting earnings of $0.81 per share on $20.02 billion in revenue, down from $0.98 per share on $30.69 billion. Despite the massive write-down of Autonomy and sagging PC sales, the stock has risen 48% from the start of the year, but it's still lower than it was during the recession.

Lowe's (NYSE:LOW) shares fell 2.6% this morning after reporting earnings of $0.49 per share, falling short of Wall Street's estimates by $0.02. The second-largest home improvement retailer booked sales of $13.5 billion, which also disappointed. Over the same period, Home Depot (NYSE:HD) grew sales by 18% year-over year. Lowe's executives blamed the poor performance on the cool spring and too much rain.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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