MORNING COFFEE

Bailout Package For Spain. Rumors are flying about a possible rescue package for Spain, with a Spanish newspaper reporting that the EU, IMF and U.S. Treasury are working on a liquidity plan involving a €250B ($335 billion) credit line. The IMF and the Spanish government both deny that any rescue package is in the offing.

Fannie & Freddie To Be Delisted. The Federal Housing Finance Agency (FHFA) has directed both Fannie Mae (FNM) and Freddie Mac (FRE) to delist from the New York Stock Exchange. The delisting of their common and preferred shares from the NYSE will be effective around July 8, when their stocks will move to the OTC market.

Economic Data Disappoints. Housing starts fell -10% to 593,000 in May, well below economist estimates of 655,000.  Building permits also fell -5.9% to 574,000, missing economists' forecasts. Additionally, the producer price index fell -0.3% last month, compared with forecasts of a -0.5% decline. The core number PPI, which excludes food and energy, rose +0.2%. Economists expected a +0.1% increase in May on the core number.

Coverage Initiated

Caterpillar (CAT): Jefferies initiated coverage with a Buy rating and target price of $75.00.

MGM Mirage (MGM): Brean Murray initiated coverage with a Hold rating.

JP Morgan Chase (JPM): FBR Capital initiated coverage with an Outperform rating and target price of $45.00.

·         Futures: Dow -0.2%. S&P -0.3%. Nasdaq -0.2%. Crude -0.4% to $76.66. Gold +0.2% to $1236.60.

·         Asia: Japan +1.8% to 10067. Hong Kong +0.1% to 20062. China +0.3% to 2570. India +0.3% to 17463.

·         Europe: London +0.3%. Paris +0.2%. Frankfurt +0.3%.