>>> Amazon, Netflix and Apple rumoured to approach ITV shareholders about GBP 12

Amazon, Netflix and Apple rumoured to approach ITV shareholders about GBP 12bn bid - report

Apple [Nasdaq:AAPL], Netflix [Nasdaq:NFLX] and Amazon [Nasdaq:AMZN] are rumoured to have been sounding out ITV’s [LON:ITV] biggest shareholders about a potential deal for the UK-based television group, the Evening Standard reported. The unattributed City-based rumour suggested the giant North American companies are prepared to offer GBP 3.00 per share to acquire ITV, giving the British broadcaster a valuation of approximately GBP 12bn (USD 15bn).
The report noted longstanding rumours that ITV is also a takeover target for the international media group Liberty Global [Nasdaq:LBTYA]. Unspecified sources cited in the piece said news of interest from rival would-be acquirers of ITV may motivate Liberty - already an almost 10% shareholder in the company - to essay a full takeover.
ITV has a current market capitalisation of GBP 8.1bn.


Market report: Buzz in Square Mile as US suitors eye ITV takeover

Chatter in the Square Mile that Liberty Global could buy out ITV is nothing new, but rumour has it that the Virgin Media owner may face competition from some of the world’s largest companies.

The word on the street is that major shareholders of ITV have been sounded out by tech giants Apple, Amazon and Netflix about a possible takeover.

They are thought to have been enticed by the cheap pound and ITV’s production arm — behind shows such as Mr Selfridge and which has been growing over the past few years through acquisitions.

The gossip suggests the US giants are willing to pay 300p a share, valuing ITV at around £12 billion.

That’s 50% up on the present share price, which edged down 1.1p to 200.2p today, although ITV’s shares were trading as high as 268p at the end of 2015 before collapsing amid concerns about TV advertising spending.

Sources said the purported interest could prompt Liberty, which has built a near-10% stake in ITV, to make a move for the entire company.

ITV, Amazon, Apple and Liberty said they did not comment on market speculation. Netflix did not respond for comment.

The pound weakened after the Supreme Court ruled that Parliament must vote on whether to trigger Article 50. This had the effect of boosting the FTSE 100 — which is dominated by dollar-earning companies — by 20.03 points to 7171.21 points, with miners driving gains.

Rio Tinto was up 121p, or 3.5%, at 3595.5p as it sold its Aussie coal subsidiary Coal & Allied for $2.45 billion (£1.96 billion).

Investors cashed in their William Hill shares after UBS downgraded to Sell, warning that they were underestimating the impact of the regulatory clampdown on addictive fixed-odds betting terminals — dubbed the “crack cocaine” of gambling.

The shares tumbled 9p or 3.3% to 267.8p as UBS claimed that the average hit to profits in shops would be around 40% after assessing a number of regulatory outcomes.

Beleaguered tech firm Laird enjoyed a rare day in the sun, rising 9.68p, or 7%, to 154.18p after showing signs the business had stabilised following a shock profit warning in October that forced the business to shelve the divi.

The company, which designs antennas for iPhones and Samsung handsets, said it secured an extension to its debt covenants at the end of last year as a precaution.

Meanwhile, North Sea oiler EnQuest strengthened 1p to 50.25p after buying a 25% stake in the Magnus field from BP for $85 million, which will be funded by cash generated from the assets.

>>> Asian Update

Asia Mid-Session Market Update: Australia CPI misses estimates, weighs on AUD; Japan posts first trade surplus in 6 years

**US Session Highlights***
- (US) President Trump signs executive orders advancing the Keystone and Dakota pipelines, as expected - press
- (US) JAN PRELIMINARY MARKIT MANUFACTURING PMI: 55.1 V 54.5E (highest since March 2015); new orders rise m/m to highest since Sep 2014
- (US) DEC EXISTING HOME SALES: 5.49M V 5.51ME; supply shrinks to 3.6 months
- (US) JAN RICHMOND FED MANUFACTURING INDEX: 12 V 7E; Volume of new orders 15 v 11 prior
- (US) Jan Philadelphia Fed Non-Manufacturing General Business Conditions 37.7 v 19.5 m/m; New orders 28.9 v 20.2 m/m

***US markets on close: Dow +0.6%, S&P500 +0.7%, Nasdaq +0.9%***
- Best Sector in S&P500: Basic Materials
- Worst Sector in S&P500: Healthcare
- Biggest gainers: FCX +8.3%, PWR +7.6%, DHI +6.6%, LEN +6.0%, MOS +6.0%
- Biggest losers: VZ -4.4%, FSLR -3.4%, ENDP -2.6%, HUM -2.5%, WAT -2.2%
- At the close: VIX 11.1 (-0.7pts); Treasuries: 2-yr 1.22% (+6bps), 10-yr 2.47% (+7bps), 30-yr 3.06% (+7bps) 3

***US movers afterhours***
- BOBE: Sells Bob Evans Restaurants to Golden Gate Capital for $565M plus debt; Acquires Pineland Farms Potato Company for $115M; +15.8% afterhours
- STX: Reports Q2 $1.38 v $1.07e, R$2.89B v $2.81Be; +12.2% afterhours
- CREE: Reports Q2 $0.20 v $0.16e, R$347M v $325Me; Guides Q3 $0.01-0.09 v $0.08e, R$285-315M v $320Me; +3.6% afterhours
- AA: Reports Q4 $0.14 v $0.22e, R$2.54B v $2.21Be; Guides initial FY17 aluminum demand growth +4%; +3.4% afterhours
- CXO: Announces sale of $1.21B in assets to PAA; +2.9% afterhours
- ISRG: Reports Q4 $6.09 v $5.92e, R$757M v $749Me; Announces $2B buyback (7.8% of market cap); +1.3% afterhours
- COF: Reports Q4 $1.45 v $1.60e, R$6.57B v $6.61Be; -0.9% afterhours
- HA: Reports Q4 $1.28 adj v $1.30e, R$633M v $628Me; -2.5% afterhours
- CA: Reports Q3 $0.63 v $0.61e, R$1.01B v $1.01Be; -2.6% afterhours

***Asia Key economic data:***
- (JP) JAPAN DEC TRADE BALANCE: ¥641B (6-month high) V ¥281BE; ADJ TRADE BALANCE: ¥357B (3-month low) V ¥210BE; 2016 trade surplus
- (AU) AUSTRALIA Q4 CONSUMER PRICES (CPI) Q/Q: 0.5% V 0.7%E; Y/Y: 1.5% (1-year high) V 1.6%E; TRIMMED MEAN Q/Q: 0.4% V 0.5%E ; Y/Y: 1.6% (5-year low) V 1.6%E
- (AU) AUSTRALIA DEC SKILLED VACANCIES M/M: 0.2% V 0.3% PRIOR
- (AU) AUSTRALIA DEC WESTPAC LEADING INDEX M/M: 0.4% V 0.0% PRIOR
- (KR) SOUTH KOREA PRELIM Q4 GDP Q/Q: 0.4% V 0.3%E; Y/Y: 2.3% V 2.2%E
- (US) NORTH AMERICA DEC SEMI BOOK/BILL RATIO: 1.06 V 0.96 PRIOR; Discontinues publishing monthly report

***Asia Session Notable Observations, Speakers and Press***
- Asian indices mostly firmer, tracking the gains in US markets; Gaming and tech firms outperformed in Hong Kong, while Australia was bolstered by mining names.
- FX majors have been range-bound with the exception of AUD and JPY. Aussie fell on softer than expected CPI data, and JPY was somewhat stronger after improved terms of trade. MXN was also lower after US press reported Pres Trump will proceed with announcing plans a for a Mexico border wall initially funded by federal money.
- Moody's affirmed Australia AAA rating and stable outlook, forecast 2.5-3.0% GDP this year; Softer than expected Aussie CPI sent AUD/USD down about 50pips below 0.7540 - tobacco and fuel saw the biggest price increases while travel and other discretionary consumer spending lagged.
- BHP Q2 production report was largely positive with a rise in iron ore output q/q and y/y. BHP also affirmed FY17 production plans, but reduced copper output target.
- Japan Dec trade surplus was at a 6-month high as exports rose for the first time in 15 months; Overall, lower oil prices have also helped Japan register its first suprlus in 2016 in 6 years. Shipments to Asia and China were up over 12%, while those to Europe fell about 4%.

China:
- (CN) China planning to cut gasoline and diesel fuel prices by CNY70/ton - financial press
- (CN) China MOFCOM Official Wang: US anti-dumping ruling on Chinese tires hurts its interests
- (CN) China Financial News Commentary: PBOC should create interest rate corridor

Japan:
- (JP) Japan govt said to be looking to revamp team devoted to TPP talks to also include negotiators for FTA, EU-related trade deals – Japan press
- (JP) Japan PM Abe: Will not speculate on possibility of US/Japan trade talks

Australia / New Zealand:
- (AU) Moody's maintains Australia AAA rating; Outlook Stable
- (AU) JPMorgan now sees RBA cutting rates further in May and August - press

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +1.2%, Hang Seng +0.2%, Shanghai Composite +0.2%, ASX200 +0.4%, Kospi +0.2%
- Equity Futures: S&P500 +0.1%; Nasdaq +0.1%; Dax flat; FTSE100 -0.2%

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0720-1.0740; JPY 113.40-114.00; AUD 0.7535-0.7600; NZD 0.7230-0.7260
- Feb Gold -0.5% at $1,205/oz; Mar Crude Oil -0.3% at $53.00/brl; Mar Copper flat at $2.71/lb
- SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 804.1 tonnes; 2nd straight decline; Lowest since Apr 29th
- SLV: iShares Silver Trust ETF daily holdings fall to 10,494 tonnes from 10,524 tonnes prior; lowest since July 2016
- (US) Weekly API Oil Inventories: Crude: +2.9M v -5.0M prior
- (CN) PBOC SETS YUAN MID POINT AT 6.8596 V 6.8331 PRIOR (biggest margin of weakness since Jan 9th)
- (CN) PBOC to inject combined CNY30B in 14-day and 28-day reverse repos v CNY20B prior

***Asia equities / Notables / movers by sector***
- Consumer discretionary: 210.HK Daphne International Holdings -1.5% (FY16 result); 47.HK Hop Hing Group Holdings +14.3% (profit alert)
- Financials: 6837.HK Haitong Securities -2.2% (FY16 result); 1336.HK New China Life -0.9% (profit warning); 086790.KR Hana Financial Group +3.3% (JPMorgan making positive comments); 086790.KR Hana Financial Group % (FY16 result)
- Industrials: 1072.HK Dongfang Electric Corp -2.8% (profit warning); 1157.HK Zoomlion Heavy Industry Science and Technology Co -4.7% (profit warning); 7312.JP Takata Corp +18.2% (not expect court-led turnaround); 6594.JP Nidec Corp -2.0% (9-month result)
- Technology: 6502.JP Toshiba -2.8% (to announce writedown); 006400.KR Samsung SDI Co +4.6% (battery risk eased); 066570.KR LG Electronics Inc +1.5% (FY16 result)
- Materials: 600362.CN Jiangxi Copper Company +3.9% (profit alert); AWC.AU Alumina +8.4% (aluminum rises, Alcoa reports); SFR.AU Sandfire Resources +5.5% (expects to be debt free); WSA.AU Western Areas +5.0% (Citi raises rating); BSL.AU Bluescope Steel -1.4% (Credit Suisse cuts rating); NST.AU Northern Star Resources -2.7% (Q2 result); BHP Billiton BHP.AU +3.2% (Q2 result)
- Energy: COE.AU Cooper Energy +2.9% (raises guidance)
- Healthcare: PRY.AU Primary Health Care +4.6%
- Utilities: EPW.AU ERM Power -2.7% (Citi cuts rating)

>>> US After Hours Summary: STX +11%, CREE +3%, AA +2.5% following ear


After Hours Summary: STX +11%, CREE +3%, AA +2.5% following earnings/guidance, BOBE +17% on plans to sell restaurant unit/focus on BEF Foods

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: STX +11.4%, CREE +2.7%, AA +2.5%, ISRG +1.2% (also enters into $2.0 bln accelerated share repurchase program),

Companies trading higher in after hours in reaction to news: CDTI +22.7% (partnered with DENSO to provide its technology to the North American heavy-duty market), BOBE +16.9% (to sell Bob Evans Restaurants, will acquire Pineland Farms Potato Company; reaffirms FY17 guidance), WDC +4.9% / QTM +3.3%  (following STX earnings/guidance), HK +4.1% (very light volume; to acquire Southern Delaware basin assets and divest East Texas Eagle Ford assets), AHP +3.4% (ticking higher;refinances three mortgage loans with existing outstanding balances totaling ~$334 million; increases quarterly dividend), CXO +2.8% (confirms sale of 100% of their respective ownership interests of Alpha Holding Company to Plains All American Pipeline for a combined total of $1.215 billion), TGI +2.4% (will replace LogMeIn in the S&P SmallCap 600; awarded $52 mln contract from Rolls Royce for Trent XWB engine components), GNW +2.3% (to report Q4 results on February 7; does not plan to host an earnings call due to the pending sale to China Oceanwide), ONVO +2.3% (initiated with Outperform at Raymond James), BLDP +2% (signed initial Equipment Sales Agreement with Zhuhai Yinlong Energy Group for 10 FCveloCity-MD 30-kilowatt fuel cell engines), MMP +1.2% (increases quarterly distribution to $0.855/unit from $0.8375/unit),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: HA -2.5%, CA -2.3%, MIK -2% (sees Q4 EPS in-line with consensus; announces secondary offering of 18 mln shares by selling stockholders), YRCW -1.2% (amends its term loan credit agreement; guides Q4 rev above Consensus), COF -0.9%

Companies trading lower in after hours in reaction to news: NCIT -5.9% (numerous prior financial statements should no longer be relied upon in connection with the previously disclosed internal investigation), NEWT -4.7% (announces 1.5 mln share common stock offering), MRCY -4.6% (to offer 5 mln shares of its common stock pursuant to an underwritten public offering), NAK -2.1% (modestly pulling back), PAA -1.2% (Plains All American announces agreements to acquire Permian Basin gathering system for $1.2 bln and to sell assets for $380 mln; sees Q4 EBITDA near midpoint of guidance; guides FY17 cap-ex), AGN -1.2% (still checking)

>>> Vestiaire Collective raises EUR 58m in Vitruvian Partners-led funding round

Vestiaire Collective raises EUR 58m in Vitruvian Partners-led funding round
24 JAN 2017
Vestiaire Collective, the European leader in luxury and premium pre-owned fashion today announces the completion of a EUR 58m round of financing to fuel continued international growth and increase operational capabilities. The round was led by new investor Vitruvian Partners as part of Vitruvian's increasing focus on French opportunities. Existing major shareholders Eurazeo and Idinvest Partners also participated, reaffirming their support of the company. Created in October 2009, Vestiaire Collective has since raised more than EUR 116m (from Zadig & Voltaire, Ventech, Balderton Capital, Conde Nast International, Idinvest Partners, Eurazeo and Vitruvian Partners).
This significant new round of funding confirms investors' belief in the large global opportunity for Vestiaire Collective's business model and will allow for further acceleration of its international business beyond the countries where the Vestiaire Collective community is already well-established. Almost two-thirds of the French headquartered company's transactions are already generated cross-markets.
This global success is based on a unique proposition: Vestiaire Collective is the only consumer-to-consumer marketplace where 100% of the products are physically checked by a team of experts, a quality control that makes the platform unique.
Vestiaire Collective has posted consistent strong growth over the past 4 years. The company will use the funds to further increase its growth, develop its presence in the United States where its aim is to rapidly achieve the same leadership position that it enjoys in Europe and to move to expand into the APAC region, where the early evidence underscores the potential for the model to succeed.
This expansion builds on the strong base to its business that Vestiaire Collective has established across Europe. With number one positions in the European G5 countries (France, the United Kingdom, Germany, Spain, Italy), and strong presence throughout the Nordics, Vestiaire Collective has become the undisputed European leader in luxury and premium pre-owned fashion.
Vestiaire Collective entered the US market in 2015 and has subsequently grown in this geography where over in the last 18 months, it has established itself as a leading and expert company in the pre-owned luxury and fashion business. Part of the proceeds of this funding will be used to accelerate its position in this market.
Vestiaire Collective's ambition is to become the clear global leader as a trading platform for both buyers and sellers by 2018, and already counts over 65% of its revenue outside of France.
Additionally, the new funds will also be used to strengthen Vestiaire Collective's distribution platform and accelerate improvements to users' multi device experience.
Finally, the company will create 120 jobs globally. Not only will Vestiaire Collective hire professionals to support its international expansion and reinforce its Tech team, the company also plans to invest in the construction of a new unique logistics centre in France in 2017 to fully meet increasing demand generated by constant growth of transactions and interactions on the platform.
Sebastien Fabre, founder and CEO of Vestiaire Collective said: "Through their investment in a new round of funding, our new and existing investors are backing our business model and are confident in our capacity to pursue tremendous international growth. They are providing us with the means for organic and possibly non-organic growth, to consolidate our leadership in Europe, pursue in a similarly rapid growth in the US, as well as enter new high potential markets such as Asia Pacific. I would like to thank all our investors and especially Eurazeo and Idinvest Partners for their ongoing support and am very pleased to welcome Vitruvian as a new shareholder. Over the last eight years, we have consistently delivered remarkable growth, which makes us highly confident in our ability to deliver on our ambition to become the leading global company in luxury and premium pre-owned fashion."
Thomas Studd, Partner at Vitruvian Partners said: "Vestiaire Collective is the largest specialist marketplace for pre-owned luxury clothes and accessories in Europe by a great distance and its highly disruptive platform is rapidly growing the market and enabling it to take share from less efficient legacy models. The platform allows sellers to realise value from their wardrobes and allows buyers to browse 600,000 items to find coveted pieces at great prices, and these benefits have built a highly engaged and enthusiastic user base. We are excited to partner with such a high calibre management team and look forward to helping our first investment in France continue its international expansion and become the global champion."
Yann du Rusquec, Managing Director of Eurazeo said: "We are delighted with this excellent funding round for Vestiaire Collective and welcome Vitruvian as a new investor who, like Eurazeo, has great ambitions for the company. We fully support Vestiaire Collective's strategy to consolidate its global leadership, particularly in the United States and thus we have taken the opportunity to increase our investment in the company."
Matthieu Baret, Partner at Idinvest Partners said: "We are proud to have been supporting Vestiaire Collective for 4 years now and helping the company to become the European leader in luxury and premium pre-owned fashion. The high volume of the company's transactions generated cross-borders confirms that the luxury and premium pre-owned fashion market is truly global. We strongly believe in Vestiaire Collective's strong growth potential and capacity to become the leading player in this market in the US and Asia."

REuters - Italy's Intesa examining possible 'combinations' with Generali

Italy's Intesa examining possible 'combinations' with Generali

Italian banking and insurance group Intesa Sanpaolo (ISP.MI) confirmed on Tuesday it was examining a possible tie-up with Italy's largest insurer Assicurazioni Generali (GASI.MI), in what would be one of Europe's biggest such deals.

In a statement, Intesa said its management "carefully examines, and will examine, any possible opportunities to strengthen its positioning and financial performance... including possible industrial combinations with Assicurazioni Generali."

It was the bank's first comment since reports emerged at the weekend that it was interested in building a stake in Generali.

Earlier on Tuesday sources told Reuters Intesa is considering a share offer for a majority stake in Generali, whose market value they put at 22 billion euros ($24 billion).

Intesa, worth almost double that, has the backing of at least two major shareholders for a bid.

Generali's recent leadership change and the perceived instability of its share register, combined with political weakness in Rome, which sees it as a strategic asset, have all encouraged bid talk and shares in the 186-year-old company soared on Tuesday.

Other rumored suitors include France's AXA (AXAF.PA) and Germany's Allianz. Generali chief executive Philippe Donnet, hired last year, was formerly an executive of AXA.

Generali, Allianz and AXA all declined to comment.

Intesa aims to reorganize Generali and sell some assets abroad, one source said. Intesa is already bigger in life insurance than Generali and a bid would attract anti-trust scrutiny.

The sources said Intesa's two main shareholders -- Compagnia di San Paolo and Fondazione Cariplo -- would tolerate a temporary reduction in dividends to help finance a takeover.

DEFENSIVE MOVE

Under Italian rules on cross-shareholdings, Intesa would have to launch an offer for at least 60 percent of Generali.

On Monday, Generali made sure of that by taking a 3.01 percent stake in the bank in a pre-emptive strike, effectively robbing Intesa of the option of taking a minority stake.

La Repubblica first reported on Tuesday that Intesa, whose board meets on Friday, was considering a share swap offer for Generali, which had 472 billion euros in assets under management at end-2016. Generali offered no explanation for its sudden investment in Intesa, borrowing shares rather than buying them outright.

"The move to acquire a stake of little more than 3 percent of the share capital of Intesa Sanpaolo has an obvious defensive quality," said analyst Luca Comi of brokerage Icbpi.

Generali, whose shares had risen by 9.8 percent to 15.64 euros by 1200 GMT, has returned as the subject of takeover speculation since Donnet was appointed.

Speculation of a deal involving Generali has been kept on the boil by plans by its biggest shareholder, Mediobanca (MDBI.MI), to reduce its 13 percent stake as part of a longer-term objective to bolster its capital.

Political uncertainty has also dogged Generali, on the grounds that a weakened Italian government would be less able to defend it against a foreign takeover.

Generali owns 70 billion euros in Italian government debt and is viewed as a strategic asset in Rome.

"Our country could not tolerate the loss of Generali, particularly if you look at assets under management. It would create too strong a competitor for Intesa," one of the sources told Reuters. "Together, the group would be a formidable one from an industrial point of view."

Italy's La Stampa daily has said that Intesa could seek to build a large stake in Generali, possibly as part of a broader deal with Germany's Allianz (ALVG.DE), Europe's biggest insurer ahead of Axa and Generali.

"Our understanding is that Intesa Sanpaolo would have purchased a large stake in Generali only to prevent a takeover or a merger with Axa," analysts at Mediobanca Securities said.

"In case of an offer coming from the French insurer, we do not rule out a counteroffer potentially being made by Allianz."

Shares in Generali closed up more than 8 percent on Tuesday. Intesa shares fell 4.5 percent and Allianz's were down just over 1 percent.

>>> Texas Instruments beats by $0.09, beats on revs; guides Q1 EPS, rev midpoint

Texas Instruments beats by $0.09, beats on revs; guides Q1 EPS, rev midpoint above consensus; promotes Brian Crutcher to COO
  • Reports Q4 (Dec) earnings of $0.91 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus of $0.82; revenues rose 7.1% year/year to $3.41 bln vs the $3.32 bln Capital IQ Consensus.
    • "Revenue increased 7% from the same quarter a year ago, as demand for our products remained strong in the automotive market. The improvement we saw in the third quarter for the industrial market continued. Demand in the personal electronics market was down slightly from a year ago. "In our core businesses, Analog revenue grew 10% and Embedded Processing grew 6% from the same quarter a year ago. Operating margin increased in both businesses.
    • "Gross margin of 62.5% in the fourth quarter reflected the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production.
    • "Our cash flow from operations of $4.6 billion for the year again underscored the strength of our business model. Free cash flow for the year was up 6% from a year ago to $4.1 billion, and represents 30.5% of revenue, up from 29.6% a year ago.
  • Co issues guidance for Q1, sees EPS of $0.78-0.88, excluding non-recurring items, vs. $0.78 Capital IQ Consensus Estimate; sees Q1 revs of $3.17-3.43 bln vs. $3.21 bln Capital IQ Consensus Estimate.
  • TI said Brian Crutcher has been promoted to chief operating officer. Crutcher, 44, is a 21-year veteran of the company and has been executive vice president responsible for all business and sales operations, as well as for Kilby Labs and information technology. As COO, he adds oversight of TI's global technology and manufacturing operations to his current duties.

>>> Alcoa misses by $0.10, beats on revs; sees 4% aluminum demand growth in 2017


Alcoa misses by $0.10, beats on revs; sees 4% aluminum demand growth in 2017
  • Reports Q4 (Dec) earnings of $0.14 per share, ex-$151 mln of special items primarily related to the permanent closure of Suralco's refinery and mines in Suriname and the impairment of Alcoa of Australia Limited's interests in a Western Australia gas field, $0.10 worse than the Capital IQ Consensus of $0.24; revenues rose 3.5% year/year to $2.54 bln vs the $2.37 bln Capital IQ Consensus, reflecting higher volumes in the Company's rolled products business, as well as rising alumina and aluminum pricing.
    • Alcoa reported fourth quarter 2016 adjusted EBITDA excluding special items of $335 million, up 18 percent from third quarter 2016. Higher alumina and metal prices drove the sequential change in adjusted EBITDA, more than offsetting increased costs primarily tied to energy.
  • For 2017, the Company projects relatively balanced global bauxite and alumina markets and a modest global aluminum surplus of 400 thousand to 800 thousand metric tons. Alcoa is projecting 2017 global aluminum demand growth of 4 percent over 2016.

>>> US Close Dow +0.57% S&P +0.66% Nasdaq +0.86% Russell +1.59%

Closing Market Summary: Nasdaq Closes Tuesday at Record High

Slow and steady was the theme on Tuesday as the major averages opened flat and advanced throughout the duration of the session to close solidly higher. The Nasdaq (+0.9%) picked up steam in the afternoon to finish a step ahead of the S&P 500 (+0.7%), while the small-cap Russell 2000 (+1.7%) surpassed them all.

Investors replaced yesterday's cautious tone with a risk-on attitude. The change of heart was most obvious in the Treasury market, which lost all of Monday's gain as the 10-yr yield swung seven basis points higher to 2.47% after losing the same amount the day before. The U.S. dollar faced a similar dynamic, with the U.S. Dollar Index (100.34, +0.39) adding 0.4% after succumbing to selling pressure on Monday. 

Generally speaking, investors traded Treasuries for stocks, but they were more specifically after growth-sensitive equities as all six cyclical sectors outpaced the broader market. Materials led all sectors with a 2.5% gain, setting the pace early following DuPont's (DD 76.05, +3.27) positive earnings report. The stock jumped 4.5% after the company beat earnings estimates and announced that its merger with Dow Chemical (DOW 59.64, +2.50) is expected to close in the first half of 2017.

A ways off from the materials sector was the financial space (+1.2%). The sector ended in second place after many of its top components recouped some of the losses suffered at the start of the earnings season. Technology, the only sector with more influence than financials, finished the day 1.0% higher after strength in chipmakers sent the PHLX Semiconductor Index higher by 2.0%. In the broader tech space, Yahoo! (YHOO 43.90, +1.50) was the most notable advancer after reporting favorable earnings results following yesterday's close.

Following the pro-cyclical narrative, energy added 1.0% on the back of crude oil's 0.8% advance. The commodity finished near this week's flat line, at $53.15/bbl, as reports pointing to lower production from top exporters offset an uptick in U.S. drilling.

On the non-cyclical side of the market, telecom services (-2.7%) finished the day at the bottom of the leaderboard following the disappointing earnings report from Verizon (VZ 50.12, -2.29), which also weighed on AT&T (T 41.36, -0.64). The two stocks account for a significant share of the lightly-weighted sector.

Health care (-0.7%) also finished in the red, while consumer staples bucked the trend, advancing 0.8%. The space's solid showing stemmed from an upbeat response to Kimberly Clark's (KMB 121.79, +4.81) better than expected earnings report. Sector heavyweights like like Procter & Gamble (PG 87.86, +0.90) and Coca-Cola (KO 41.90, +0.47) outperformed, adding close to 1.0% apiece.

Today's economic data was limited to December Existing Home Sales:

  • Existing home sales for December decreased 2.8% from November to an annualized rate of 5.49 million units while the consensus expected a reading of 5.55 million.
    • The key takeaway from the report is that inventory constraints, rising prices, and higher mortgage rates remain a key obstacle to stronger sales activity.

Tomorrow's economic data will include MBA Mortgage Applications Index at 7:00 am ET and November FHFA Housing Price Index at 9:00 am ET.

  • Russell 2000 +0.9% YTD
  • Dow Jones Industrial Average +0.8% YTD
  • S&P 500 +1.8% YTD
  • Nasdaq Composite +4.1% YTD