MORNING COFFEE

Warren Buffett Testifies On Rating Agencies. Warren Buffett testifying before the Financial Crisis Inquiry Commission yesterday warned lawmakers not to enact reactionary reforms or single out the ratings agencies for criticism. Buffett who’s company Berkshire Hathaway is a major shareholder of Moody's (MCO) said managers at Moody’s "made a mistake that 300 million other Americans made" in overestimating housing-related assets.

Car Sales Increase. Carmakers once again saw sales gains in May, with several companies posting double-digit growth. Chrysler (FIATY) sales +33%, Ford (F) sales +21.9%. GM sales +16.6%. Toyota (TM) sales +6.7%.

Upgrades

eBay (EBAY): MKM Partners raised their rating from Sell to Neutral.

Charles Schwab (SCHW): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $29.00 to $33.00.

Coverage Initiated

Procter & Gamble (PG): Stifel Nicolaus initiated coverage with a Buy rating and target price of $72.00.

Colgate-Palmolive (CL): Stifel Nicolaus initiated coverage with a Hold rating.

Earning Reports

Hovnanian (HOV): Reported Q2 EPS of -$0.36 beating estimates by +$0.28 on revenue of $319 million. 

Joy Global (JOYG): Reported FQ2 EPS of $1.15 beating estimates by +$0.38 on revenue of $896 million.

·         Futures: Dow +0.4%. S&P +0.4%. Nasdaq +0.3%. Crude +0.6% to $73.27. Gold -0.4% to $1217.50.

·         Asia: Japan +3.2% to 9914. Hong Kong +1.6% to 19787. China -0.7% to 2553. India +1.7% to 17022.

·         Europe: London +1.7%. Paris +2.2%. Frankfurt +1.7%.