it is not a bearish market

capital increase. In addition, Bloomberg noted that Diario Economico reported that the bank plans to strengthen its capital base. The capital comments came after Rioforte, a holding company in the Espirito Santo Group, missed a ~$1B repayment of commercial paper. o Media in M&A headlines: § The upbeat sentiment surrounding M&A remained in focus today with the media space in the headlines. TWX +17.1% confirmed an earlier report that it rejected an unsolicited takeover proposal from FOX (4.6%). The cash-and-stock offer reportedly valued the company at $85 per share, or ~$80B. Time Warner noted that it is confident that a continued execution of its strategic plan will create significantly more value and is superior to any proposal that Twenty-First Century Fox is in a position to offer. The WSJ reported that Time Warner CEO Bewkes is not flatly opposed to selling, though the company is not planning on conducting an auction process. o Last week's earnings angst continues to wane: § The earnings calendar was cited as supportive for the broader market today, even though beats did not always drive stock-specific outperformance. With the latest batch of results, Q2 season-to-date metrics continue to look fairly healthy with a 73% beat rate and companies reporting earnings 4% ahead of consensus expectations in the aggregate. While earnings out of the banking sector from the likes of PNC (3.5%), BAC (2%) and USB (1.8%) were not well received, this was largely a function of the higher bar set by the reports seen over the last couple of days. At the other end of the spectrum, the beat and raise from INTC +% helped underpin several pockets of Tech. o Energy, Tech lead market higher: § Energy outperformed. Underlying commodity strength helped, while coal names were the big gainers with ANR +5.9% and WLT +4.4%. INTC provided the big tailwind for Tech, particularly stocks leveraged to PCs such as MSFT +3.8%. CLF +5% and AKS +3.2% were some of the big gainers. Industrials beat the tape with help from the strength in the machinery space. JOY +8.1% rallied on renewed takeover speculation. The hospital group surged on the positive preannouncement and ACA commentary from HCA +10.5%. o Health Care, Financials, Staples lag: § Health Care was the worst performer. Biotech remained on the defensive with IBB (1.6%) following the recent Fed comments on valuations. The ACA guidance out of the hospital space was a headwind on managed care, while tax inversion scrutiny weighed on names like COV (1.7%) and MDT (1%). The higher earnings bar hit banks with the BKX (0.9%). However, fundamental takeaways still seemed better. Guidance from HSY (2.5%) was an overhang on the Consumer Staples sector. Despite the outperformance of Tech, Internet and social media remained largely on the defensive with QNET (%) and SOCL (%).