MORNING COFFEE

Banks Protest Tax. Banks are protesting the IMF's proposal to levy taxes on banks' balance sheets, profits and compensation, calling it a "punishment tax" saying it would hurt profits and do nothing to prevent future failures.  Additionally many say any tax could just be passed onto customers in the form of fees.  The tax would also be the first time a global body would have the ability to tax U.S. business which could lead to other global taxes placed on U.S. business and citizens.

Obama to Speak to Wall Street. President Obama will give a speech today on Wall Street addressing the importance of financial reform.  According to pre-released excerpts of his speech, Obama will say the financial crisis "was born of a failure of responsibility from Wall Street to Washington," and will urge big banks to line up behind the Democratic package of reforms. Many on Wall Street say the reforms do nothing to address both Fannie Mae, Freddie Mac and government policy that caused the financial problems.   Additionally, the reforms do nothing to prevent future failures.  Question are also now arising about the fraud charges against Goldman Sachs (GS) with some calling the timing of the charges a political stunt to win support from the public against the banks.

Toyota’s Credit Rating Lowered. Moody's (MCO) lowered Toyota's (TM) credit rating to AA2 from AA1.  Moody says the reasoning behind the decision is it expects Toyota's low profitability to continue and recall-related litigation costs could be significant.

Upgrades

Starbucks (SBUX): Jesup & Lamont  raised their rating from Hold to Buy and raised their target price from $25.00 to $32.00.

Alcoa (AA): HSBC Securities raised their rating from Underweight to Neutral.

Downgrades

Elan (ELN): UBS lowered their rating from Neutral to Sell.

Hormel Foods (HRL): Deutsche Bank lowered their rating from Hold to Sell.

Time Warner (TWX): BMO Capital Markets lowered their rating from Outperform to Market Perform.

Hershey Foods (HSY): Reported Q1 EPS of $0.64 beating estimates by +$0.17 on revenue of $1.4 billion.

Nokia (NOK): Reported Q1 EPS of €0.14 missing estimates by- €0.01 on revenue of €9.5 billion.

PepsiCo (PEP): Report Q1 EPS of $0.89 Beating estimates by +$0.14 on revenue of $9.4billion.

Philip Morris International (PM): Reported Q1 EPS of $0.90 missing estimates by -$0.03 on revenue of $6.5 billion.

Amgen (AMGN): Reported Q1 EPS of $1.30 beating estimates by +$0.06 on revenue of $3.59 billion. 

eBay (EBAY): Reported Q1 EP S of $0.42 beating estimates by +$0.01 on revenue of $2.2 billion.  The company also sees Q2 EPS of $0.37-0.39 vs. $0.40 consensus. 

Qualcomm (QCOM): Reported Q2 EPS of $0.59 Beating estimates by +$0.02 on revenue of $2.66 billion. The company also sees Q3 EPS of $0.51-0.55 vs. $0.55 consensus. 

·         Futures: Dow -0.4%. S&P -0.6%. Nasdaq -0.7%. Crude -0.6% to $83.21. Gold -0.5% to $1143.40.

·         Asia: Nikkei -1.3% to 10949. Hang Seng -0.3% to 21455. Shanghai -1.1% to 2999. BSE +0.6% to 17574.

·         Europe: London -0.8% to 5678. Paris -0.9% to 3941. Frankfurt -0.9% to 6173.