Trade The News Market Internals Update at 12:00ET

Dow +217 S&P +23 NASDAQ +41

***Economic Data***

– (US) MBA Mortgage Applications w/e Oct 28th: 0.2% v 4.9% prior
– (US) Oct Challenger Job Cuts Y/Y: 12.6% v 211.5% prior
– (US) Oct ADP Employment Change: 110K v 100Ke
– (US) Weekly DOE Energy Inventories: Crude: +1.82M v +1Me; Gasoline: +1.35M v -500Ke; Distillate: -3.57M v -1.5Me; Utilization: 85.3% V 84.9%e
– (UK) BOE bought £1.7B in reverse auction for 2022-2036 Gilts

– Optimism about this morning’s jobs data and the upcoming FOMC decision has trumped fresh fears about the Greek referendum. The Challenger Job Cuts survey for October indicated that private employers cut far fewer employees than expected and boosted their hiring outlook in October. Meanwhile, the Oct ADP number was better than expected and the Sept data was revised higher. Non-Farm Payrolls for October are due to arrive Friday morning. The Fed policy decision is scheduled for 12:30ET, and traders are expected lower economic projects to be the only significant change in the report; some believe lower projections could be a foundation on which to build QE3, although many dispute this thesis. Chairman Bernanke will appear at his quarterly press conference later this afternoon. In Europe, Greece is playing chicken with France and Germany this morning, and it appears that Athens could hold its referendum as soon as December 4th. Treasury markets are only modestly lower after two huge up days. The benchmark 10-year yield remains just a few basis points above 2% after the Treasury announced $72B in quarterly refunding sales. Bond prices in Europe are lower across the board but that has not stopped the French/German 10-year spread from toughing another all-time high at 128 basis points.

– MasterCard reported sharply higher Q3 profits, easily beating Wall Street estimates on double-digit increases in volumes. On the conference call, MasterCard’s CFO said that rev growth would be higher in the second half than 1H, although most of this impact arrived in Q3. MA is up 8%, while rival Visa is up 3%. Cable rivals Time Warner and Comcast are heading in different directions this morning. Time Warner narrowly beat estimates, however its FY11 earnings outlook fell well short of expectations. Comcast delivered solid growth in net additions and met expectations. TWX is in the red in the early going, while CMCSA is up 2% but off its best levels. Online media name AOL’s loss was smaller than expected and churn levels declined; shares of AOL are up more than 10% in the first hour of trade. Construction group Foster Wheeler reported lower-than-expected Q3 profits as both its engineering and construction arm and its power unit posted declines. Shares of FWLT are down 10%.

– The greenback maintained a soft tone heading into the FOMC meeting, at which the Fed is expected to lower its growth outlook. EUR/USD re-tested back above the 1.38 handle in an effort to hunt for buy stops lingering. The G20 conference in Cannes, France takes place on Thursday and Friday, and the Greek drama has given them plenty to focus on.

***Looking Ahead***

– 11:00 (DE) Denmark Oct Foreign Currency Reserves (DKK): No est v 490.3 prior
– 12:15 (GE) German Fin Min Schaeuble
– 12:30 (US) FOMC Interest Rate Decision: expected to maintain rates at 0.25%
– 13:00 (FR) Germany’s Merkel, France’s Sarkozy, IMF’s Largarde to meet in Cannes (no ECB’s Draghi)
– 13:00 (IT) Italy Oct New Car Registrations Y/Y: No est v -5.7% prior
– 14:00 (IT) Italy Oct Budget Balance: no est v -€11.8B prior; Budget Balance YTD: No est v -€58.8B prior
– 14:15 (US) Fed Chairman Bernanke speaks at Fed Press Conference
– 14:30 (UK) BOE Fisher
16:15 (CA) BOC Carney

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