Morning Coffee Pre-Market Wall Street News

Leaders Defend Detroit Bankruptcy

Michigan Gov. Rick Snyder (R) and Kevyn Orr, the emergency manager and bankruptcy lawyer that was appointed to run the city, both put the city’s bankruptcy blame squarely on the city. The city has been run by Democrats for decades.  At its height Detroit had over 1.8 million citizens, now the city has less than half that many citizens leaving abandoned burned out homes and a $19 billion debt in its wake. The city had once even been considered as a finalist for the Olympics.

The Republican Governor stood by his decision over the weekend on Face the Nation saying that “It’s not about just more money, it’s about accountable government.” He went on to talk about the mismanagement and corruption within the local government. Currently former Detroit Major Kwame Kilpatrick is serving a jail sentence for racketeering, wire fraud, Mail fraud, and obstruction of justice.

Some Wall Street analysts and investors are watching very closely since there are several other major U.S. cities with similar financial problems including : Chicago which has an unfunded pension liability reported to be at least $19 billion and Los Angeles with a liability estimate to be as much as $30 billion.

Upgrades:

Alcatel-Lucent (ALU): Raymond James raised their rating from Outperform to Strong Buy and placed a target price of $3.50 on the company.

Cognizant Tech (CTSH): Goldman Sachs raised their rating from Neutral to Buy and placed a target price of $90.00 on the company.

Downgrades:

Autoliv (ALV): Buckingham lowered their rating from Buy to Neutral and lowered their target price from $68.00 to $63.00. Pre-market: 80.97 -1.16 (-1.41%)

Crocs (CROX): Wedbush lowered their rating from Outperform to Neutral and maintained their target price of $18.00.

Honeywell (HON): Nomura lowered their rating from Buy to Neutral and raised their target price to $88.00.

H&R Block (HRB): BTIG lowered their rating from Buy to Neutral.

Nokia (NOK): Oppenheimer lowered their rating from Perform to Underperform.

TD Ameritrade (AMTD): BMO Capital lowered their rating from Outperform to Market Perform and placed a target price of $26.00 on the company.

Towers Watson (TW): Deutsche Bank lowered their rating from Buy to Hold and raised their target price from $80.00 to $93.00.

VF Corp (VFC): Credit Suisse lowered their rating from Outperform to Neutral and lowered their target price from $208.00 to $188.00.

Earning Reports:

Federal-Mogul (FDML): Reported EPS of $0.57 beating estimates by +$0.18. Pre-market: 11.28 +0.60 (5.62%)

Gannett (GCI): Reported EPS of $0.58 missing estimates by $0.01. Pre-market: 25.11 -1.25 (-4.74%)

Halliburton (HAL): Reported EPS of $0.73 beating estimates by +$0.01. Pre-market: 46.10 +0.27 (0.59%)

Hasbro (HAS): Reported EPS of $0.29 missing estimates by $0.05. Pre-market: 44.60 -0.78 (-1.72%)

Kimberly-Clark (KMB): Reported EPS of $1.41 beating estimates by +$0.02. Pre-market: 98.05 -1.44 (-1.45%)

McDonald's (MCD): Reported EPS of $1.38 missing estimates by $0.02. Pre-market: 97.77 -2.50 (-2.49%)

Markets: 
Futures at 8:30: Dow +0.05%. S&P +0.05%. Nasdaq +0.17%. Crude +0.30% to $108.37. Gold +2.02% to $1319.02.

Europe: London -0.24%. Paris +0.15%. Frankfurt -0.09%. 

Asia: Japan +0.47% to 14658. Hong Kong +0.25% to 21417. China +0.61% to 2005. India +0.05% to 20,159. 

Morning Coffee Pre-Market Wall Street News

U.S. Economy Adds 195,000 New Jobs. According to the U.S. Labor Department the economy added 195,000 new jobs in June. Wall Street economists were looking for only 166,000 new jobs to have been created in June. Private employers added 202,000 positions, while local, state and federal governments shed 7,000 workers. The Manufacturing sector which is a good barometer for the overall economy lost 6,000 jobs in June. While construction gained 13,000 new jobs.

Additionally, the unemployment rate held steady, but high at 7.6%, unchanged from May.  Two weeks ago, Fed Chairman Ben Bernanke said that he anticipated that the Fed’s current bond-buying program would begin to end when unemployment fell below 7%.

Upgrades:

Apache Corp (APA): Argus raised their rating from Hold to Buy and placed a target price of $95.00 on the company. Pre-market: 81.50 +1.27 (1.58%)

Buffalo Wild Wings (BWLD): Miller Tabak raised their rating from Hold to Buy and raised their target price from $99.00 to $117.00.

Pandora (P): HSBC raised their rating from Neutral to Overweight. Pre-market: 19.85 +0.42 (2.16%)

SABMiller (SBMRY): Societe Generale raised their rating from Hold to Buy.

Downgrades:

Mead Johnson Nutrition (MJN): Morgan Stanley lowered their rating from Overweight to Equal Weight and placed a target price of $76.00 on the company. Pre-market: 69.41 +0.56 (0.81%)

Markets: 
Futures at 7:55: Dow +0.97%. S&P +0.81%. Nasdaq +0.73%. Crude +0.52% to $101.75. Gold -1.13% to $1237.70. U.S. 10 Year -1 6/32 2.646%

Europe: London +0.27%. Paris -0.14%. Frankfurt -0.61%. 

Asia: Japan +2.08% to 14310. Hong Kong +1.89% to 20855. China +0.05% to 2007. India +0.44% to 19496.

Clients in the News -

John Henry Johnson, Jr. Named UCLA Women's Track & Field Head Coach

Morning Coffee Pre-Market Wall Street News

World Market Fall. U.S. stock futures along with Asian and European markets are all lower after a landslide of bad news. Wall Street traders are watching closely as Egypt falls into chaos, sending oil prices higher. China reported a tepid services PMI and both Greece and Portugal are back in the spotlight again bring back worries of the EU debt crisis.  

Upgrades:

AutoNation (AN): Credit Suisse raised their rating from Neutral to Outperform and raised their target price from $50.00 to $53.00.

Chipotle Mexican Grill (CMG): Argus raised their rating from Hold to Buy and placed a target price of $430.00 on the company. Pre-market: 375.60 +4.07 (1.10%)

Copart (CPRT): Barrington raised their rating from Market Perform to Outperform and raised their target price from $36.00 to $40.00.

Daimler AG (DDAIF): JPMorgan raised their rating from Neutral to Overweight.

Leap Wireless (LEAP): Macquarie raised their rating from Underperform to Neutral. Pre-market: 6.77 +0.08 (1.20%)

Downgrades:

Adidas (ADDYY): Deutsche Bank lowered their rating from Buy to Hold.

Alcoa (AA): JPMorgan lowered their rating from Overweight to Neutral and placed a target price of $9.00 on the company. Pre-market: 7.64 -0.16 (-2.05%)

Overstock.com (OSTK): BofA Merrill Lynch lowered their rating from Buy to Underperform and lowered their target price from $23.00 to $20.00. Pre-market: 28.60 -1.25 (-4.19%)

Coverage Initiated:

Best Buy (BBY): Goldman Sachs initiated coverage with a Buy rating and target price of $34.00. Pre-market: 28.76 +0.07 (0.24%)

Cintas (CTAS): RBC Capital initiated coverage with an Outperform rating and target price of $52.00.

Ecolab (ECL): RBC Capital initiated coverage with an Outperform rating and target price of $97.00.

Earning Reports:

Intl Speedway (ISCA): Reported EPS of $0.51 beating estimates by +$0.01. Pre-market: 32.66 +0.15 (0.46%)

Markets: 
Futures at 7:35: Dow -0.47%. S&P -0.37%. Nasdaq -0.35%. Crude +2.15% to $101.75. Gold +0.35% to $1247.70. U.S. 10 Year +3/32 2.467%

Europe: London -1.64%. Paris -1.65%. Frankfurt -1.70%. 

Asia, Japan -0.31% to 14056. Hong Kong -2.48% to 20147. China -0.61% to 1994. India -1.47% to 19195. 

Morning Coffee Pre-Market Wall Street News

Home Prices Rise. Home prices in May rose the most in seven years according to CoreLogic. Prices were up +12.2% compared to May of last year and up +2.6% from April. This was the largest increase since February 2006. Excluding distressed sales, which include foreclosures and short sales, prices were up +11.6% on a yearly basis. The analysts on Wall Street forecast prices will rise by another +2.9% in June for a yearly gain of +13.2%. Nevada saw the biggest price increases, followed by Arizona , California,  Hawaii and Oregon.

Upgrades:

JPMorgan Chase (JPM): Raymond James raised their rating from Outperform to Strong Buy and raised their target price from $55.00 to $64.00. Pre-market: 52.65 +0.16 (0.30%)

Las Vegas Sands (LVS): ISI Group raised their rating from Neutral to Buy.

Quicksilver (ZQK): B. Riley raised their rating from Neutral to Buy and placed a target price of $9.25 on the company.

Downgrades:

Accenture (ACN): Argus lowered their rating from Buy to Hold. Pre-market: 71.21 -0.89 (-1.23%)

Barrick Gold (ABX): Jefferies lowered their rating from Buy to Hold and lowered their target price from $30.00 to $14.00.

Newmont Mining (NEM): Jefferies lowered their rating from Hold to Underperform and lowered their target price from $30.00 to $18.00.

Pfizer (PFE): Standpoint Research lowered their rating from Hold to Sell. Pre-market: 27.56 -0.22 (-0.79%)

Tractor Supply Co (TSCO): Nomura lowered their rating from Buy to Neutral. Pre-market: 114.89 -1.49 (-1.28%)

Coverage Initiated:

Groupon (GRPN): Wunderlich initiated coverage with a Buy rating and target price of $11.00.

Ryder Systems (R): Wunderlich initiated coverage with a Buy rating and target price of $72.00.

Earning Reports:

Acuity Brands (AYI): Reported EPS of $0.97 beating estimates by +$0.10. Pre-market: 79.00 +3.07 (4.04%)

Constellation Brands (STZ): Reported EPS of $0.38 missing estimates by -0.03. Pre-market: 52.38 -0.77 (-1.45%)     

      

Markets: 
Futures at 8:18: Dow +0.01%. S&P -0.07%. Nasdaq +0.14%. Crude +0.35% to $98.33. Gold -0.14% to $1254.00.

Europe: London -0.45%. Paris -0.74%. Frankfurt -1.05%. 

Asia: Japan +1.78% to 14099. Hong Kong -0.70% to 20659. China +0.57% to 2007. India -0.58% to 19464. 

Morning Coffee Pre-Market Wall Street News

Record Outflows from Bond Funds. According to TrimTabs a record $79.8B was pulled from exchange-traded and mutual funds in June. The amount of outflow from bonds was almost double the $41B withdrawn during the financial crisis in October 2008. Mutual funds saw a mass exodus of $70.8B and ETFs saw $9B withdrawn in June. Some on Wall Street believe the exodus could continue once investors receive their latest quarterly statements.

Upgrades:

Apple (AAPL): Raymond James raised their rating from Outperform to Strong Buy and maintained a target price of $600.00. Pre-market: 402.81 +6.28 (1.58%)

Big Lots (BIG): MKM Partners raised their rating from Neutral to Buy and placed a target price of $38.00 on the company.

Covance (CVD): Raymond James raised their rating from Market Perform to Strong Buy.

Intuit (INTU): Raymond James raised their rating from Market Perform to Strong Buy. Pre-market: 61.89 +0.85 (1.39%)

LG Display Co (LPL): Topeka raised their rating from Sell to Hold.

MGM Resorts (MGM): Janney Capital raised their rating from Neutral to Buy. Pre-market: 15.03 +0.25 (1.69%)

Tyco Intl (TYC): Morgan Stanley raised their rating from Equal Weight to Overweight and placed a target price of $39.00 on the company. Pre-market: 33.50 +0.55 (1.67%)

Downgrades:

3M (MMM): Morgan Stanley lowered their rating from Overweight to Equal Weight and placed a target price of $112.00 on the company. Pre-market: 108.28 -1.07 (-0.98%)

Coverage Initiated:

Express Scripts (ESRX): Monness Crespi initiated coverage with a Buy rating.

Kennametal (KMT): Goldman Sachs initiated coverage with a Neutral rating and target price of $43.00.

21^st Century Fox (FOXA): Evercore initiated coverage with an Overweight rating and target price of $34.00.

21^st Century Fox (FOXA): Wedbush initiated coverage with an Outperform rating and target price of $31.00.

21^st Century Fox (FOXA): Credit Suisse initiated coverage with an Outperform rating and target price of $34.00.

Markets: 
Futures at 8:27: Dow +0.55%. S&P +0.45%. Nasdaq +0.71%. Crude +1.00% to $97.54. Gold +2.12% to $1237.50. U.S. 10 yr -10/32 2.528%

Europe: London +0.86%. Paris +0.56%. Frankfurt +0.23%. 

Asia: Japan +1.28% to 13852.5. Hong Kong +1.78% to 20803. China +0.81% to 1995. India +0.94% to 19593. 

Morning Coffee Pre-Market Wall Street News

Nike Beats Earnings Estimates. Sporting goods manufacture Nike (NKE) reported that their FQ4 earnings beat Wall Street expectations. Net profit at the company soared +22% to $668M, adjusted EPS came in at $0.76 while revenues climbed +7% to $6.7B. Sales in North American increased by +12% and revenues continued to grow in emerging markets.  The company saw a decline in both Japan and Europe, while China was flat. Pre-market: 61.10 -1.22 (-1.96%)

Upgrades:

Bed Bath & Beyond (BBBY): BofA Merrill Lynch raised their rating from Neutral to Buy and placed a target price of $82.00 on the company. After Hours: 70.15 0.00 (0.00%)

Zumiez (ZUMZ): Wedbush raised their rating from Neutral to Outperform and raised their target price from $30.00 to $36.00. Pre-market: 28.25 +0.30 (1.07%)

Pacific Sunwear (PSUN): Wedbush raised their rating from Neutral to Outperform and raised their target price from $3.75 to $4.00. Pre-market: 3.41 +0.08 (2.40%)

Downgrades:

Accenture (ACN): UBS lowered their rating from Buy to Neutral and lowered their target price from $85.00 to $77.00. Pre-market: 73.50 -6.72 (-8.38%)

BAE Systems (BAESY): Deutsche Bank lowered their rating from Buy to Hold.

Owens Corning (OC): Citigroup lowered their rating from Buy to Neutral and lowered their target price from $48.00 to $43.00.

Coverage Initiated:

Cognizant Tech (CTSH): Societe Generale initiated coverage with a Buy rating and target price of $74.00. Pre-market: 61.00 -2.10 (-3.33%)

Infosys (INFY): Societe Generale initiated coverage with a Hold rating and target price of $44.00. Pre-market: 41.50 +0.11 (0.27%)

Tesla Motors (TSLA): Wedbush initiated coverage with a Neutral rating and target price of $110.00. Pre-market: 110.02 +0.77 (0.70%)

Torchmark (TMK): RBC Capital initiated coverage with an Underperform rating and target price of $60.00. After Hours: 65.72 0.00 (0.00%)

Earning Reports:

Accenture (ACN): Reported EPS of $1.14 beating estimates by +$0.01. Pre-market: 73.50 -6.72 (-8.38%)

Finish Line (FINL): Reported EPS of $0.20 beating estimates by +$0.04. After Hours: 21.20 0.00 (0.00%)

Nike (NKE): Reported EPS of $0.76 beating estimates by +$0.01. Pre-market: 61.10 -1.22 (-1.96%)

Research in Motion (BBRY): Reported EPS of -$0.13 missing estimates by -$0.20. Pre-market: 11.91 -2.57 (-17.75%)

Markets: 

Futures at 6:25: Dow +0.19%. S&P +0.15%. Nasdaq +0.16%. Crude +0.24% to $97.27. Gold -0.65% to $1204.00. U.S. 10 Year +4/32 2.456%

Europe: London -0.05%. Paris -0.49%. Frankfurt -0.21%. 

Asia Japan +3.51% to 13677. Hong Kong +1.78% to 20803. China+1.50% to 1979. India +2.75% to 19396.