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Fed Actions May Move Market This Week |
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While the market waits for big retail announcements later this week, all eyes will be on Ben Bernanke and the US Federal Reserve Wednesday. The Federal Open Market Committee will vote whether or not to raise the target federal funds rate, which is at historic lows. 
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Essential Reading for Traders
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| | | | | The markets have been shaky in the early part of this week as the energy sector disappointed and lower retail sales numbers for July have dampened optimism for Wal-Mart Stores (WMT) earnings announcement. The Fed's open market activity consists of mostly purchasing or selling government, agency and mortgage backed debt. This helps them interfere in the balance of supply and demand in debt market so they can manage the overnight Fed funds rate. These disruptions in the market are very valuable to traders for determining when the market may shift, change direction or experience an increase in price volatility.
Read these articles to understand more about Fed activity in the market:
The Fed's announcement is likely to impact commodities across the board, as the Fed is keeping a keen eye on inflation. Companies like Alcoa, Inc (AA) in aluminum, British Petroleum (BP) and Marathon Oil Corporation (MRO) in oil, and Archer Daniels Midland (ADM) in corn are likely to be impacted.
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