Trade the News Market Internals Update at 12:00ET

***Economic Data***

Trading was choppy in the premarket and the first hour of trading following the lower-than-expected US GDP data and the failure of the supercommittee, not to mention continued debt crisis issues. However by mid morning equities were tilting firmly to the downside. The supercommittee outcome came as little surprise to anyone, and its trading impact has been limited so far. Moody’s and S&P dismissed it as immaterial to their US sovereign ratings for the moment, although Fitch warned that it could trigger a downgrade in outlook. The revision lower in the second reading of the Q3 US GDP was more surprising. Analysts said that the revision mainly reflected a reduction in inventories, while GDP excluding the effects of inventories was unchanged from the advance reading. Commodity prices tried to bounce early after yesterday’s move lower but as equities have given ground gold and oil prices have given back some gains.

The US 10-year yield is little changed are remains below 2% while sovereign spreads remain wider across Europe. – Investors are not enthusiastic about Hewlett-Packard’s Q4 results, and shares of HPQ are down more than 4%. HP only just met expectations in the quarter, while its earnings forecast for Q1 and FY12 was strikingly weak. In addition, the firm refrained from offering revenue guidance. Newly-installed CEO Meg Whitman explained the omission as being due to HP’s need to focus on growing earnings rather than revenue. Telecom and networking equipment manufacturer Brocade crushed top- and bottom-line estimates in its Q4 and offered strong guidance for Q1. Share of BRCD are up more than 5%. Consumer staples names Hormel and Campbell Soup were both in line with all expectations.

– Solar names reporting yesterday and this morning were slammed in the premarket thanks to an ocean of red on the bottom line. Canadian Solar, LDK Solar, Jinko Solar, Trina Solar and Suntech Power all reported much larger-than-expected quarterly losses. The CEO of Canadian Solar summed it up: “We saw significant declines in raw materials costs in the third quarter of 2011, including lower costs for polysilicon, wafers and cells, which we expect to help lessen the impact of expected declines in module average selling prices.” Shares of JKS is still down 10%, although TSL an LDK are off their worst levels and CSIQ and STP are both back in positive territory.

– The greenback continued to trade on a softer note despite the trouble in Europe. Funding surged to a two-year high earlier today to €247B, as fast-spreading sovereign debt worries left lending markets virtually frozen and the ECB the only available funding option for many institutions. The revision lower seen in the second reading of Q3 US GDP data spurred a moment of risk off sentiment but the greenback was unable to sustain any positive momentum. EUR/USD was trading above 1.35 by mid morning.

***Looking Ahead***

– 11:00 (US) Fed to Purchase $4.25-5.00B in Notes/Bonds
– 11:00 (EU) ECB member Coene speaks at Financial Forum Conference in Brussels
– 11:00 (EU) EU Barroso speaks at Beer Serves Europe Event in Brussels
– 11:30 (US) Treasury to sell 4-Week Bills
– 12:30 (GE) Germany Fin Min Schaeuble, Commerzbank CEO Blessing, Fuest Speak on Euro Debt Crisis, Berlin
– 13:00 (US) Fed member Kocherlakota speaks in Winnipeg, Manitoba
– 13:00 (US) Treasury to sell 5-Year Notes
– 14:00 (US) Fed releases minutes from Nov. 1-2 FOMC Meeting
– 14:00 (UK) BOE member Jenkins
– 14:00 (US) Minutes of FOMC Meeting
– 14:00 (AR) Argentina Oct Trade Balance: $1.0Be v $1.1B prior
– 14:00 (US) Fed to Purchase $2.25-2.75B in Notes/Bonds
– 16:30 (US) Weekly API Energy Inventories
– 21:30 (CH) China Nov HSBC Flash China Manufacturing PMI: No est v 51.1 prior