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Markets are likely to be cautious until the outcome of this month's Federal Open Markets Committee policy meeting is known. An announcement is due at 12:30 p.m. EDT, followed by a press conference with Chairman Ben Bernanke at 2:15 p.m. EDT. The Fed is widely expected to extend its low-interest rate policy until 2015, but what is less certain -- and could shift markets -- is whether a third round of quantitative easing will be announced.
Other economic data due this morning includes the latest weekly jobless claims figures, which are expected to rise to 370,000 from 365,000 the previous week. August's producer price index is also due and is expected to show a rise of 1%, up from 0.3% in July. August's federal budget is due at 2 p.m. EDT, just before Bernanke takes center stage at the FOMC press conference.
Companies that could make waves in trading today include Apple, whose shares could be heavily traded following the launch of the iPhone 5 last night. Apple shares closed slightly higher yesterday, while Pier 1 Imports is due to release results before markets open, with analysts expecting earnings of $0.19 per share on revenue of $368 million.
European markets were fairly quiet this morning ahead of today's Fed announcement (which will take place after European markets close). One big story affecting the French, German, and U.K. markets was the possible merger between BAESystems (LSE: BA.L ) and EADS, the company which makes Airbus airliners. The deal would create a company to rival Boeing in size, with a substantial presence in both the civil and defense aerospace industries. Shares in both companies fell in trading this morning as investors expressed concerns about the structure and viability of the deal.
At 7 a.m. EDT, the DAX was down by 0.4%, the CAC was down by 0.7%, the FTSE MIB was down by 0.7%, and the IBEX was down by 1.1%. In London, the FTSE 100 (INDEX: ^FTSE ) was just 0.1% lower. Merger candidate BAE Systems reversed yesterday's strong gains and dropped 6%, making it the biggest faller this morning, while fellow aerospace engineer Rolls-Royce was in favor and rose by 2.4%, leading the risers.
Billionaire investor Warren Buffett does not own shares in BAE or Rolls-Royce. However, he did recently invest $1 billion in a well-known British blue chip brand, expanding his stake in the company to more than 5%. This famous British name has global expansion potential -- and you can discover the identity of the company and the price Buffett paid in this special exclusive report. Best of all, the report is free -- so download it today while it's still available.
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