Trade the News Market Internals Update at 12:00ET

***Economic Data***

– (US) MBA Mortgage Applications w/e Jul 29th: +7.1% v -5.0% prior
– (US) July Challenger Job Cuts: 66.4K v 41.4K prior; Y/Y: 59.4% v 5.3% prior ((highest since March 2010)
– (US) July ADP Employment Change: 114K v 100Ke
– (US) July ISM Non-Manufacturing Composite: 52.7 v 53.5e
– (US) Jun Factory Orders: -0.8% v -0.8%e
– (US) DOE Energy Inventories: Crude: +950K v +1Me; Gasoline: +1.7M v flat; Distillate: +410K v +1.5Me; Utilization: 89.3% v 85.8% prior

– US equities were stable in the pre-market session thanks to the better-than-expected jobs data, however the slide that dominated yesterday’s US session got right back under way with the opening bell. Both the NASDAQ and DJIA came within close range of their 2011 lows before bouncing a bit higher. Ahead of the open the July Challenger Job Cuts data hit its highest level since March 2010 and the ADP survey came in higher than estimates. But after the open the soft ISM services index and contraction in June factory orders undermined confidence after the open. In Europe, the situation in Italy remains opaque as traders await a statement shortly due from PM Berlusconi. Meanwhile, it has emerged that euro zone leaders intend to beef up the EFSF fund and possibly make it a permanent institution. Spot gold continues to make big gains, and is near its fresh all-time high of $1,673. Yields on USTs continue to contract as investors seek safe haven.

– MasterCard outperformed expectations in its quarterly results once again. The firm delivered impressive profit and revenue growth, both well ahead of consensus estimates, on robust increases in dollar and transaction volumes. On the conference call, MasterCard’s CEO said that growth in consumer credit continues to be strong in the US, although he also noted that higher levels of spending are being driven primarily by inflation. Shares of MA are not far from session highs of +8%. Insurance names UNUM Provident and XL Capital both beat earnings targets, XL by a wide margin. UNM was up as much as 3.5% before the name dropped with overall markets, while XL remains up 6%.

– Recovering strength in the US advertising market has helped Time Warner and CBS beat earnings expectations in the second quarter. Time Warner also slightly improved its outlook for FY11. Liberty Global’s quarterly losses are getting under control, aided in part by FX, while revenue continues to make incremental improvements. Shares of CBS are flat on the day, LBTYA is down 2% and TWX is down nearly 5%. Telecommunications hardware maker Harris Corp met expectations in its Q4, raised its FY12 outlook, hiked its dividend 12% and approved a big share buyback. HRS was up more than 7% in the premarket, although shares have given up around half their gains on the day.

– Consumer products maker Clorox reported firm operating income in its Q4, although higher material costs and share buyback weighed on profits. Like most other consumer product names, costs have been a serious issue for the firm, which said it will continue to evaluate price increases to cope with raw material costs. Car rental firm Hertz topped earnings and revenue expectations and hiked its FY11 guidance, as the industry continues to benefit from the uptick in travel demand. Recreational vehicle maker Thor Industries offered a big profit warning for its Q4, saying that revenue would be well below expectations due to ongoing weak consumer spending and margin pressure.

– The SNB’s measures to curb CHF gains did not totally distract markets from the debt situation in Europe’s periphery but they did halt the initial panic that almost enveloped the European equity open. Overall dealers believe the SNB could basically only attempt to change the franc’s safe-haven image given the market environment, or at the very least make it inconvenient to hold the currency. The ADP data did coax some risk appetite, but the bulk of the enthusiasm was ebbing as the US cash session got underway. The EU insisted that there has been no talk of a bailout for Italy, raising eyebrows as traders wondered why they would even bring up the issue. Markets are awaiting the Italian PM s speech to the Chamber of Deputies (lower Parliament) which was delayed until after Italian markets close.

***Looking Ahead***

– 11:30 (BR) Brazil July Commodity Price Index M/M: No est v -1.6% prior; Y/Y: No est v 31.7% prior
– 13:00 (IT) Prime Minister Berlusconi address Parliament
– 13:00 (MX) Mexico July IMEF Manufacturing Index: 53.0e v 53.3 prior; Non Manufacturing Index: 52.8e v 52.5 prior
– (JP) Bank of Japan (BOJ) Interest Rate Decision: Expected to leave the Target Rate Range unchanged from 0.00% to 0.10% stance

This information was brought to you courtesy of TradetheNews.com, for your free trial Click Here