>>> Europe : Brokers Upgrades & Downgrades - 28th of January 2016

>>> Up
*ATRESMEDIA RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS - Note Attached
*CEWE RAISED TO BUY VS HOLD AT BANKHAUS LAMPE
*FERROVIAL RAISED TO OUTPERFORM VS SECTOR PERFORM AT RBC
*LAGARDERE REINSTATED OVEREWIGHT AT BARCLAYS, PT EU30 - Note Attached
*MEDIASET ESPANA RAISED TO EQUALWEIGHT VS UNDERWEIGHT: BARCLAYS - Note Attached
*TDC RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS
*WOLTERS KLUWER RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS - Note Attached

>>> Down
*BASF CUT TO ADD VS BUY AT ALPHAVALUE
*CENTRICA CUT TO SELL VS HOLD AT SOCGEN
*BUREAU VERITAS CUT TO REDUCE VS HOLD AT HSBC
*DELTICOM CUT TO SELL VS HOLD AT BANKHAUS LAMPE
*GENERALI CUT TO HOLD VS BUY AT HSBC
*INTERTEK CUT TO REDUCE VS HOLD AT HSBC
*METRO CUT TO UNDERWEIGHT AT JPMORGAN

>>> PT Change

>>>> Initiation
*ADECCO RATED NEW HOLD AT BERENBERG; PT CHF62
*AMADEUS FIRE RATED NEW HOLD AT BANKHAUS LAMPE, PT EU73
*BASTEI LUEBBE RATED NEW BUY AT BANKHAUS LAMPE, PT EU8.50
*BETFAIR RATED NEW HOLD AT LIBERUM; PT 3,900P
*CHORUS CLEAN ENERGY RATED NEW BUY AT BANKHAUS LAMPE, PT EU12
*HALMA RATED NEW BUY AT HSBC, PT 950P
*HAYS RATED NEW BUY AT BERENBERG; PT 150P
*LADBROKES RATED NEW SELL AT LIBERUM; PT 106P
*LAGARDERE REINSTATED OVEREWIGHT AT BARCLAYS, PT EU30
*MASTERFLEX RATED NEW HOLD AT BANKHAUS LAMPE, PT EU6
*MICHAEL PAGE RATED NEW BUY AT BERENBERG; PT 530P
*PLAYTECH RATED NEW BUY AT LIBERUM; PT 980P
*RANDSTAD RATED NEW BUY AT BERENBERG; PT EU60
*SCHALTBAU HOLDING RATED NEW BUY AT BANKHAUS LAMPE, PT EU55
*SIKA RATED NEW OUTPERFORM AT BERNSTEIN; PT CHF4,650
*VILLEROY & BOCH RATED NEW HOLD AT BANKHAUS LAMPE, PT EU13
*WASHTEC RATED NEW BUY AT BANKHAUS LAMPE, PT EU33
*WILLIAM HILL RATED NEW HOLD AT LIBERUM; PT 367P
*WINDELN.DE RATED NEW HOLD AT BANKHAUS LAMPE, PT EU10

>>> Call

>>> TalkTalk might have attracted interest from Iliad - market reports

TalkTalk might have attracted interest from Iliad 

TalkTalk [LON:TALK], a UK-based telecoms group, may have attracted takeover interest from the French mobile operator Iliad [EPA:ILD], according to The Times. The newspaper’s market report section did not cite a source for what it described as recent speculation.

As previously reported, the entrepreneur Xavier Niel is the controlling shareholder in Iliad.

A market report in the Financial Times also noted speculation that Iliad might be eyeing TalkTalk. The article did not cite a source for the speculation but cited analyst who argued that regulatory constraints on TalkTalk expanding its mobile business could be loosened should Iliad enter the UK market.

A Daily Mail market report also mentioned market gossip that TalkTalk may not be independent much longer and tipped Vodafone [LON:VOD] as a potential acquirer.

TalkTalk’s share price closed 12.9p up at 215.9p in London yesterday, 27 January, valuing the company at GBP 2.06bn (EUR 2.69bn).

>>> UBI Banca CEO asks for guarantees from Italian government in exchange for me

UBI Banca CEO asks for guarantees from Italian government in exchange for merger with BMPS 

Victor Massiah, the CEO of UBI Banca [BIT:UBI], has asked for guarantees in exchange for agreeing to a merger with BMPS [BIT:BMPS], another listed Italian bank, Italian language daily Il Sole 24 Ore reported. The unsourced report said that Massiah is believed to have asked for the guarantees at a meeting yesterday 27 January with the Minister of Economy Pier Carlo Padoan.

The report said that one of the guarantees that UBI Banca is asking for is protection against BMPS' badwill caused by the fact that its market cap is now much less than its assets. The report said that UBI is also asking for guaranteed liquidity for the merged entity for the next two years. However, the item noted that only the European Central Bank can agree to this.

The report said that Massiah is believed to have asked for further concessions that would benefit UBI Banca.

UBI Banca has a market cap of EUR 4.159bn and BMPS EUR 2.081bn

Il Sole 24 Ore

>>> Lonza could acquire in existing sectors

Lonza could acquire in existing sectors Aargauer Zeitung

Lonza, the listed Swiss chemicals group, could make acquisitions in existing sectors, Aargauer Zeitung reported. The Swiss daily cited Lonza Chief Executive Richard Ridinger who told a media conference that he has the finance to make buys having reduced debts by around CHF 1bn to CHF 1.66bn, and having a cash flow of CHF 667m. Ridinger did not identify potential targets but stated buys could be made in existing sectors if necessary.

Lonza achieved a turnover of CHF 3.8bn in 2015, up 4.5% on the previous year, the report noted.

Aargauer Zeitung

Liberation : Bolloré lorgne BeIn pour sauver Canal+

Bolloré lorgne BeIn pour sauver Canal+


Selon nos informations, le boss de Vivendi veut racheter la chaîne sportive des Qataris pour relancer son groupe de télé à péage, en perte de vitesse.

Il y a quelques mois, la seule évocation de cette hypothèse aurait fait hurler de rire. Mais la piste d’un rachat de BeIn Sports France par Vivendi, la maison mère de Canal +, est de plus en plus sérieuse. Même François Hollande y croit ! Le président de la République a évoqué cette possibilité la semaine dernière, lors d’un déjeuner avec des journalistes raconté dans le Parisien. «Les discussions, entamées en décembre, ont repris mi-janvier», indique à Libération une source au fait du dossier. Elles avaient été rapidement stoppées après leur ouverture, les deux parties ayant d’abord fait le constat de leurs désaccords. L’attrait d’un tel rapprochement a pourtant convaincu les uns et les autres de se retrouver autour d’une table. Le groupe présidé par Vincent Bolloré pousse le plus fort. «On aimerait bien que ça aboutisse», reconnaît-on à Vivendi, qui a autant à y gagner que le Qatar, propriétaire de BeIn Sports.

C’est ce qu’explique une note d’Exane BNP Paribas, publiée le 22 janvier. «Il y a deux raisons de croire que le Qatar pourrait accueillir favorablement une proposition de Vivendi, écrit le fonds d’investissement. La cession de son actif télévisuel français, non rentable, lui permettrait d’atténuer son stress financier croissant. L’utilité marginale de cette télévision diminue. En face, un tel accord permettrait à Canal + d’inverser sa dynamique commerciale négative et de reconstituer son portefeuille de plus en plus mince de droits sportifs.» L’observation suit deux analyses similaires, faites avant Noël par la banque Natixis et la société de gestion Raymond James. Au taquet, le milieu des affaires a déjà dit oui à l’opération et les marchés attendent la prochaine prise de parole publique du patron de Vivendi, le 18 février, lors de la présentation des résultats annuels.

Foot français et NBA
Pas sûr, cependant, que les négociations soient finalisées à cette date. Selon nos informations, deux schémas d’alliance sont envisagés à ce stade. Le premier, de nature commerciale, ferait de Vivendi le distributeur exclusif de BeIn Sports. Autrement dit, ceux qui voudraient à l’avenir avoir accès aux chaînes qataries devraient nécessairement s’abonner aux offres de Canal + ou CanalSat. Comme c’est le cas actuellement pour Eurosport. Cette exclusivité a un coût : Canal + paye 50 millions d’euros par an à Discovery, l’américain qui possède Eurosport. Bien mieux doté en droits, BeIn Sports, qui diffuse notamment le foot français et la NBA, n’offrira sûrement pas la possibilité de diffuser ces événements sportifs à moins de 100 millions d’euros. Ce scénario s’appuie sur une expérience promotionnelle en cours qui a valeur de test : actuellement, tout nouvel abonné à Canal + ou CanalSat a le droit à BeIn Sports gratuitement pendant trois mois. Cocasse, lorsqu’on se rappelle les noms d’oiseaux qu’ont échangés les deux médias après le lancement de BeIn en France. Mais ça, c’était en 2012, avant que Canal + ne tombe sous la coupe de Bolloré.

L’autre schéma, plus ambitieux, plus onéreux et bien plus complexe à monter, a les faveurs du boss de Vivendi. C’est le genre de montage dont raffole le loup Bolloré, qui s’est amusé toute sa vie à prendre des positions capitalistiques ici ou là pour les revendre ensuite. Il s’agirait d’une acquisition pure et simple de la partie française de BeIn Sports. Sa valeur est estimée à 500 millions d’euros par Natixis. Payée en actions plutôt qu’en cash, la somme permettrait aux Qataris de prendre en échange 8 % de Canal +. Ou même de demander une participation à l’étage au-dessus, dans Vivendi. Ils connaissent bien la maison. Qatar Holding, le fonds souverain de Doha, a détenu jusqu’à 2 % du capital du groupe français, mais il a revendu ses parts fin 2014. A la suite de l’opération, phosphore Natixis, «Vivendi pourrait proposer une alliance à l’international» à son nouveau partenaire. Avec sa chaîne d’information mondiale Al-Jezira et BeIn Media Group qui est présent dans une trentaine de pays, le Qatar a une résonance planétaire. De quoi allécher Bolloré, qui trouve son Vivendi encore bien trop franco-français.

«C’est dérisoire»
Pourquoi l’homme d’affaires breton lâcherait-il 500 millions d’euros ? D’abord parce qu’il a l’argent : fin septembre, Vivendi avait 8 milliards de trésorerie en réserve. Lors d’un one man show à l’Olympia, devant les salariés de Canal + il y a un mois et demi, Bolloré a même promis d’investir 2 milliards pour relancer la chaîne cryptée. Il y a urgence. La maison Canal est sur une mauvaise pente. En un an, le groupe de télé à péage a perdu 88 000 abonnés en France. Inquiétant : son marché domestique représente plus de 60 % du chiffre d’affaires de Canal. Dans un contexte d’augmentation des droits sportifs et des coûts de production des fictions télévisées, la profitabilité de la boîte s’érode d’autant plus vite. Alors difficile d’avoir des grands rêves de conquête extérieure quand on se fait enfoncer de tous les côtés chez soi. «Quand on ajoute à ça la concurrence de Netflix et l’envie des opérateurs télécoms de selancer dans les contenus, eux qui ont des bases d’abonnés gigantesques pour amortir leurs investissements, on se dit que continuer la bagarre avec BeIn Sports, c’est dérisoire», argumente un proche de la direction de Canal. Et de citer l’exemple d’Altice, le groupe de télécoms de Patrick Drahi (propriétaire de Libération), qui vient de chiper à Canal + les droits du foot anglais, à partir de la saison prochaine. Cela ne devrait pas aider à enrayer la fuite des abonnés (qui sont encore 5,9 millions en France). «La chaîne tient sa place sur le cinéma et la fiction, mais elle doit récupérer une offre sportive plus étendue», résume un autre. D’où l’idée de s’associer avec BeIn Sports.


2,5 millions d’abonnés
Encore faut-il que les Qataris soient vendeurs. «Jamais», jurait un de leurs représentants au temps de premières rumeurs. Mais Doha vient de vivre un «annus horribilis», selon la formule d’Exane BNP Paribas. La valeur cumulée des principales participations prises par ses fonds d’investissement a fondu de 13 milliards d’euros depuis juin, dont 7 milliards sur Volkswagen. Surtout, la chute du prix des hydrocarbures oblige le Qatar, comme l’Arabie Saoudite, à resserrer ses budgets. «Le gouvernement est en train de tout rationaliser, il y a des coupes de 30 % à 50 % partout», relève un intermédiaire français bien implanté au Qatar. L’austérité n’épargne pas les activités médias. Al-Jezira vient d’annoncer la fermeture de sa chaîne d’info aux Etats-Unis, lancée en grande pompe en 2013, car son modèle n’était «pas soutenable», dixit son patron. Le Qatar n’a pas toujours été aussi regardant sur la rationalité économique de ses investissements…

Or, BeIn Sports France, avec 2,5 millions d’abonnés, est un puits sans fond : la chaîne perdrait de 250 millions à 300 millions d’euros par an selon Natixis ! La faute à un prix d’attaque (13 euros par mois) pour une grille de programmes riche et donc chère. «Ils ont toutes les raisons de se rapprocher de nous», veut croire un négociateur de Vivendi, qui se montre cependant très prudent sur l’issue des discussions : «On n’est pas les seuls sur le coup.»

A l’écouter, BeIn Sports aurait sondé Orange et Free à propos d’un accord de distribution exclusive.

Par ailleurs, une alliance avec Vivendi n’est pas assurée de recevoir l’aval de l’Autorité de la concurrence, encore échaudée par la fusion en 2007 de TPS et CanalSat. «Les questions d’ego entrent en jeu», remarque enfin notre négociateur. Sous-entendu : les Qataris, pas toujours bons perdants, verraient une cession comme un aveu d’échec. L’émir cheikh Tamim, seul vrai décisionnaire, se laissera-t-il convaincre par Bolloré ? Pour rapprocher les points de vue, les deux hommes peuvent compter sur un ami commun : Nicolas Sarkozy. D’après nos informations, l’ex-chef de l’Etat, jamais bien loin lorsqu’il est question de foot et de télé, suit de très près le dossier.

>>> Asian Update

Asian Market Update: Samsung Q4 results disappoint; RBNZ holds cash rate at 2.50% with a dovish outlook; BOJ policy decision in focus


***Economic Data***
- (JP) JAPAN DEC RETAIL SALES M/M: -0.2% V +1.0%E; RETAIL TRADE Y/Y: -1.1% V +0.2%E
- (AU) AUSTRALIA Q4 IMPORT PRICE INDEX Q/Q: -0.3% V -0.8%E; EXPORT PRICE INDEX Q/Q: -5.4% V -3.9%E
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 2.50%; AS EXPECTED
- (NZ) NEW ZEALAND DEC TRADE BALANCE (NZD): -53M V -131ME; 7th straight month deficit
- (SG) SINGAPORE Q4 PRELIMINARY UNEMPLOYMENT RATE: 1.9% V 2.0%E

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -0.4%, S&P/ASX +0.6%, Kospi +0.1%, Shanghai Composite -0.5%, Hang Seng +0.2%, Mar S&P500 +0.2% at 1,878

***Commodities/Fixed Income***
- Apr gold +0.6% at $1,122/oz, Mar crude oil -1.3% at $31.89/brl, Mar copper -0.3% at $2.05/lb
- (NZ) Fonterra cuts FY15/16 forecast milk price to NZ$4.15/kg from NZ$4.60/kg; Sees cash payout NZ$4.50-4.55/kgMS
- USD/CNY: SWIFT: CNY use in international transactions 2.3% of total in Dec v 2.3% prior
- USD/CNY: *(CN) PBOC SETS YUAN MID POINT AT 6.5528 V 6.5533 PRIOR; strongest Yuan setting since Jan 6th, 14th straight firmer setting relative to Close
- (CN) PBOC to inject CNY80B in 7-day reverse repos and CNY260B in 28-day reverse repos; Injects net CNY590B (3-year high) this week v injected CNY315B prior
- JGB: (JP) Japan MoF sells ¥2.28T in 0.1% 2-year JGBs; Avg yield: -0.018% v -0.013% prior; bid-to-cover 4.84x v 4.72x prior
- (JP) Japan investors bought net ¥475B in foreign bonds v sold net ¥375B in prior week; Foreign investors sold net ¥189B in Japan stocks v sold ¥358B in Japan stocks in prior week

***Market Focal Points/FX***
- Asian indices are mixed as investors digest policy statement tweaks by the FOMC and prepare for tomorrow's Bank of Japan announcement. The Fed largely accomplished its delicate task of acknowledging global market turmoil since its December hike in the context of both - tempering expectations for four 2016 rate hikes implied by the dot chart while still remaining data dependent. Removal of "balanced risks" and return of "monitoring global developments" were seen as key to diminished expectations of another March tightening - in fact the fed funds futures now only price in a full hike toward the end of the year. USD majors were somewhat volatile in the wake of the decision but did not make significant leaps. In Asian session, USD/JPY was rangebound in 50pip band below 119, EUR/USD traded in a 25pip range above 1.0880, and AUD/USD was supported above the 0.70 level.

- NZD was most volatile after the RBNZ rate decision, falling over 60pips below 0.6420. As expected, New Zealand central bank kept rates on hold at 2.50% but reintroduced an easing bias, judging that return to target inflation range is likely to take longer than last anticipated. Recall last time RBNZ cut rates but concluded it could achieve its inflation objective at current rates, sending NZD higher. Today, RBNZ expressed new concerns about China and other emerging markets, reiterated it would prefer to see further depreciation in exchange rate, and acknowledged the impact of falling fuel prices. After the decision, Westpac pushed forward its expectation of next easing from June to March, while ANZ noted RBNZ stepped up its easing bias but did not necessarily set up expectations for another cut in March. Separately in New Zealand, Fonterra cut its FY15/16 forecast milk price to NZ$4.15/kg from NZ$4.60/kg, noting there was still imbalance between supply and demand which continues to put pressure on global milk prices. New Zealand trade data was in deficit for the 7th straight month but much smaller than the prior 6 deficit readings, as shipments to China were up nearly 9% and those to Australia and US up 2%.

- Ahead of tomorrow's BOJ decision, PM Abe's advisor Honda said he would conduct further monetary easing and also postpone sales tax hike in 2017 amid slowdown in global economy. PM Abe also remarked that the govt is working with the BOJ to end deflation. In China, state press People's Daily reiterated the economy will not experience a hard landing in spite of recent comments to the contrary from famed investor George Soros.

- Samsung Electronics traded down nearly 3% as Net profits in Q4 were well below expectations. Samsung noted its 2016 capex plan remain under review and that it takes efforts to stay profitable in every business unit. For 2016, Samsung forecast single-digit percentage growth for smartphone and tablets amid overall slowdown in IT industry during Q1. Finally, Samsung announced it was buying back KRW2.5T in common stock.

***Equities***
US equities / ADRs:
- FB: Reports Q4 $0.79 v $0.68e, R$5.84B v $5.36Be; +12.1% afterhours
- TER: Reports Q4 $0.13 ex-items v $0.10e, R$318M v $310Me; +8.8% afterhours
- MLNX: Reports Q4 $0.77 v $0.69e, R$176.9M v $174Me; +7.9% afterhours
- PYPL: Reports Q4 $0.36 v $0.34e, R$2.56B v $2.51Be; Announces $2B share buyback; +4.8% afterhours
- TXN: Reports Q4 $0.71 v $0.69e, R$3.19B v $3.20Be; +3.4% afterhours
- CTXS: Reports Q4 $1.50 (ex tax benefit) v $1.19e, R$905M v $878Me; authorizes $400M (3.9% of market cap) increase to share repurchase program; +2.6% afterhours
- LVS: Reports Q4 $0.62 v $0.64e, R$2.86B v $2.92Be; +2.0% afterhours
- LRCX: Reports Q2 $1.57 v $1.42e, R$1.43B v $1.41Be; +1.5% afterhours
- QCOM: Reports Q1 $0.97 v $0.90e, R$5.77B v $5.70Be; -0.6% afterhours
- DFS: Reports Q4 $1.14 v $1.30e, R$2.21B v $1.80Be; -7.4% afterhours
- JNPR: Reports Q4 $0.63 v $0.60e, R$1.32B v $1.30Be; CFO resigns; -10.7% afterhours
- URI: Reports Q4 $2.19 v $2.35e, R$1.52B v $1.55Be; -11.2% afterhours
- EBAY: Reports Q4 $0.50 v $0.49e, R$2.32B v $2.32Be; -12.3% afterhours
- NOW: Reports Q4 $0.19 v $0.08e, R$285.7M v $280Me; -16.9% afterhours

Notable movers by sector:
- Consumer discretionary: Huayi Brothers Media Corp 300027.CN +1.1% (guidance); Japan Airlines Corp 9201.JP +1.1% (9-month result speculation)
- Financials: China Merchants Securities Co 600999.CN +0.5% (guidance)
- Industrials: Vinda International 3331.HK -8.3% (FY15 result); Zoomlion Heavy Industry Science and Technology Co 000157.CN +3.5% (proposed acquisition); Weichai Power 2338.HK -0.7% (guidance); Chongqing Changan Automobile Co 000625.CN +4.3% (guidance); Asciano Limited AIO.AU +3.3% (consortium makes proposal); Kawasaki Heavy Industries 7012.JP -5.2 % (9-month result); GS Engineering & Construction Corp 006360.KR +1.6% (Q4 result)
- Technology: Canon 7751.JP +1.2% (FY15 result); Samsung Electronics 005930.KR -2.8% (Q4 result)
- Materials: China Minmetals Resources 1208.HK +1.4% (Q4 result); Drillsearch Energy DLS.AU -3.1% (Q2 result); Fortescue Metals Group FMG.AU +4.5% (Q2 result); Newcrest Mining NCM.AU +2.7% (Q2 result); Sandfire Resources SFR.AU +2.3% (Q2 result)
- Energy: Sinopec (China Petroleum & and Chemical Corp) 600028.CN -0.2% (FY15 result); Beach Energy BPT.AU -3.4% (Q2 result)
- Telecom: Ten Network TEN.AU -0.8% (H1 result); M2 Telecommunications Group Ltd MTU.AU +2.6% (in favor of agreement with Vocus Communications)

>>> US After Hours Summary: FB -12.2%, CAVM +10.8%, TER +10.

After Hours Summary: FB -12.2%, CAVM +10.8%, TER +10.3%, MSTR +6.8%, MLNX +6.6%, PYPL +5.0%, NOW -15.2%, EBAY -12.2%, JNPR -7.4%

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance:  FB -12.2%, CAVM +10.8%, TER +10.3%, MSTR +6.8%, MLNX +6.6%, PYPL +5.0%, TXN +3.6%, AMP +3.6%, CTXS +2.4%, LVS +2.2%, CCI +2.2%, CRUS +1.9%, SNDK +1.9%.

Companies trading higher in after hours in reaction to news:  ETE +3.6% (maintained same dividend as Q3; Extends management fee to ETP through 2016; ETP maintains dividend, provided cap-ex update).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance:  NOW -15.2%, EBAY -12.2%, OSIS -10.8%, URI -9.5%, SGI -9.3%, DFS -7.5%, JNPR -7.4%, INVN -7.3%, CLB -3.9%, VAR -1.9%.

Companies trading lower in after hours in reaction to news:  INCY -12.6% (stopped phase 2 sub-study early after interim analysis of the high CRP subgroup demonstrated that ruxolitinib plus regorafenib did not show a sufficient level of efficacy), FCX -3.6% (Moody's downgrades FCX's ratings, assigns B1 CFR; outlook negative).

>>> US Close Dow-1.38% S&P-1.09% Nasdaq-2.18% Russell-1.50%

Closing Market Summary: Fed Policy Statement Sparks Selloff

The stock market ended its Wednesday affair under heavy selling pressure as the major indices sold off in response to the Federal Open Market Committee's policy statement for January. Today's trade saw a break with tradition as a jump in crude prices was not enough to alter the trajectory of the market. The S&P 500 (-1.1%) and the Dow Jones Industrial Average (-1.4%) returned all of their inter-day gains, but finished ahead of the tech-heavy Nasdaq (-2.2%), which spent the day in negative territory.

A rebound in crude oil helped lift equity markets from their opening lows, but the stock market stopped following oil once the FOMC statement crossed the wires. As for oil, WTI crude managed to attract buyers despite the commodity showing larger than expected builds in both the EIA and API weekly inventories. This bullish activity in the face of poor data and increasing chatter regarding production cut agreements between OPEC and non-OPEC states may have been enough to signal a bottom to some investors, or at the very least a spot to cover short positions. WTI crude ended its pit session higher by 2.5% at $32.22/bbl.

In the early afternoon, the latest directive from the Federal Open Market Committee demonstrated less dovish undertones than market participants may have been expecting. The statement partly acknowledged that growth had slowed and that inflation is expected to remain low in the near-term. However, the Fed's belief that inflation is expected to rise to 2.0% over the medium term in the face of declines in energy and import prices creates doubt as to whether the central bank will revise its glide path. Stocks ticked up immediately after the release, but followed that move with a slide to new lows. 

A key earnings miss in the influential technology sector (-2.5%) helped keep the group at the bottom of the leaderboard. Technology was joined by heavily-weighted consumer discretionary (-1.5%) and health care (-1.1%) while telecom services (+0.8%) and utilities (+0.2%) ended in the green.

In the top-weighted technology space Apple (AAPL 93.44, -6.54) underperformed after issuing Q2 guidance below expectation while reporting a miss on revenue in their Q1 earnings report. Other heavyweight constituents like Alphabet (GOOLG 717.58, -16.21) and Facebook (FB 94.45, -2.89) shed 2.2% and 3.0%, respectively, with Facebook set to report after today's close.

Elsewhere, large-cap component Amazon (AMZN 583.35, -17.90) demonstrated relative weakness in the consumer discretionary space. Meanwhile, fellow heavyweight Disney (DIS 94.32, -1.95) outpaced the losses in the sector with a decline of 2.0%. Also of note, Netflix (NFLX 91.15, -6.68) slid 6.8% as the company continues to show weakness after reporting earnings last week.

Biotechnology showed relative weakness in the health care space, evidenced by the 3.1% decline in the iShares Nasdaq Biotechnology ETF (IBB 273.40, -8.68). This downshift came despite a strong performance from Biogen (BIIB 273.26, +13.39), which climbed 5.2%, after the company reported an earnings beat before today's open.

Treasuries moved to their lows during today's rally but were able to climb to session highs during the pullback in equity markets. The yield on the benchmark note ended its day unchanged at 2.00%. 

Today's participation was true to recent form with more than a billion shareschanging hands at the NYSE floor. 

Today's economic data included the weekly MBA Mortgage Index and the New Home Sales report. Later today the FOMC policy statement for January (consensus 0.5%) will be announced at 14:00 ET

  • The MBA Mortgage Index showed a seasonally adjusted increase of 8.8% in mortgage application from last week's 9.0 increase.
  • New home sales were up 10.8% month-over-month in December to a seasonally adjusted annual rate of 544,000 (consensus of 506,000) versus 491,000 in December (revised from 490,000).
  • An estimated 501,000 new homes were sold in 2015, which is up 14.5% from 2014.

Tomorrow's economic data includes weekly Initial Claims (consensus 285k) and Durable Orders for December (consensus -0.5%) being reported at 8:30 ET. Meanwhile, Pending Home Sales for December (consensus 0.8%) will cross the wires at 10:00 ET.  

  • Russell 2000 -11.8% YTD
  • Nasdaq  -10.8% YTD
  • Dow Jones -8.5% YTD
  • S&P 500 -7.9% YTD