Trade the News Market Internals Update at 12:00ET

 Dow -19 S&P -5 NASDAQ -16

– (CL) Chile Nov CPI M/M: 0.3% v 0.1%e; Y/Y: 3.9% v 3.7%e

– (GE) Germany Oct Industrial Production M/M: +0.8% v +0.3%e v -2.7% prior; Y/Y: 4.1% v 3.5%e 

– (SA) South Africa Oct Retail Sales M/M: 0.6% v 0.7%e; Y/Y: 7.4% v 7.5%e

– (CL) Chile Nov Trade Balance: $657M v $837.0M prior

– (CL) Chile Nov Copper Exports: $3.7B v $3.5B prior

– (US) MBA Mortgage Applications w/e Dec 2nd: +12.8% v -11.7% prior

– (PD) Poland Central Bank left rates unchanged at 4.50%, as expected

– (BR) Brazil Nov Vehicle Production: 274.5K v 265.6K prior; Vehicle Sales: 321.6K v 280.6K prior

– (PD) Poland Nov Official Total Reserve: $98.7B v $102.7B prior

– (BE) Belgium Q3 Final GDP Q/Q: -0.1% v 0.0% prelim; Y/Y: 1.7% v 1.8% prelim

– (US) DOE CRUDE: +1.33M V -1ME; GASOLINE: +5.15M V +500KE; DISTILLATE: +2.53M V +1ME; UTILIZATION: 87.7% V 85.2%E 

– European and Asian equities made headway overnight after reports circulated yesterday afternoon that Europe would run both the ESM and the EFSF at the same time, using the approach to effectively increase the firepower available to deal with the crisis. The idea is not new, however the renewed discussions of such a plan ahead of the key summit later this week immediately drove risk on trading. The warm glow felt by all from yet another reiteration of a policy rerun didn’t last long, and early on in the European session there were unconfirmed reports that France and Germany still disagreed whether the two bailout funds should be allowed to work side-by-side or not. An unnamed senior German official was said to have told the press that talks in recent days showed some negotiators are not aware of the seriousness of the situation and there is the potential for bad treaty-change compromises being made at the summit. Confidence vanished after these reports, and both US and European equities remain in the red as of writing. Bund and Treasury prices have ticked up while spreads to Italian and Spanish debt have moved wider.

– There have been several notable business pacts among leading companies announced this morning. Martha Stewart Living Omnimedia has apparently given up on its alliance with Macys, agreeing to a 10-year partnership with JC Penny instead. As part of the alliance, JC Penny has acquired a 16.6% stake in MSO for $3.50/share. In response, reports indicated that Macy’s was evaluating whether to keep Martha Stewart product lines in stock. Brazilian airline GOL formed an alliance with Delta, involving a $100M investment by Delta. There were also reports that Total would shortly announce that it had bought a stake in Chesapeake’s Utica shale operations in Ohio for more than $2B. Back in early November, Chesapeake announced a Utica Shale joint venture with an “undisclosed international major energy company” worth $3.4B. 

– In pre-earnings guidance reports, Monsanto raised its Q1 guidance significantly ahead of a conference presentation today, and also reiterated its FY12 outlook. Monsanto said strength has been driven primarily by the business in Brazil and Argentina, with some contribution from the US and Australia. MON is down 2%. Natural gas producer Spectra Energy gave a solidly in-line preview of its FY12 outlook. SE is down 1%. LCD tech firm Photronics warned that its Q1 profit and revenue would miss expectations due to flagging demand. PLAB dropped as much as 6%, before regaining nearly all its losses. Scotts Miracle-Gro warned that its quarterly loss in Q1 would be steeper than analysts project, due to various market problems. The company reaffirmed its prior FY12 outlook. SMG is up 1%.- The risk-on environment in the Asian and early European sessions helped bolster the euro, driving EUR/USD as high as 1.3450 overnight, before disagreement between France and Germany over the proposal to let the two bailout funds work side-by-side cut down the rally. As seen yesterday, the 1.3350 area provided resistance. Dow -19 S&P -5 NASDAQ -16

– 15:00 (US) Oct Consumer Credit: $7.0Be v $7.4B prior

– 15:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to leave the Official Cash Rate unchanged at 2.50%

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