MORNING COFFEE

Bank Stress Test Released Today. European and U.S. traders will be on edge today as they await the announcement of stress-test results for 91 European banks in 27 different countries. . Some are questioning whether the test was tough enough to be credible, and which banks could fail and or require recapitalization.

Amazon Misses. Shares of Amazon (AMZN) are lower in the pre-market, following the company's Q2 earnings miss (see details below). Discounted merchandise and increased operating expenses both contributed to the EPS miss.  The company is also seeing increase competition for its eReader from several competitors including Apple’s (AAPL) iPad.

Banks Get Blasted. Pay czar Ken Feinberg is due to release his report citing 17 financial firms for making $1.6 billion in "ill-advised" payments to employees during the financial crisis. The report is designed to put political and public pressure on firms, since he does not have the authority to demand the payments back.  Additionally, many believe that it is un-American for the government to decide how much a citizen can make.

Upgrades

Microsoft (MSFT): The Benchmark Company raised their rating from Sell to Hold and placed a target price of $32.00 on the company.

Nokia (NOK): Wunderlich raised their rating from Hold to Buy.

Downgrades

Estee Lauder (EL): Stifel Nicolaus lowered their rating from Hold to Sell.

Travelers (TRV): Oppenheimer lowered their rating from Outperform to Perform.

SunTrust Banks (STI): FBR Capital lowered their rating from Outperform to Market Perform and lowered their target price from $34.00 to $27.00.

Coverage Reiterated/Price Target Changed

Microsoft (MSFT): Oppenheimer reiterated their Outperform rating and lowered their target price from $38.00 to $35.00.

Chubb (CB): FBR Capital reiterated their Market Perform rating and raised their target price from $63.00 to $65.00.

Earning Reports

Honeywell International (HON): Reported Q2 EPS of $0.60 beating estimates by +$0.03 on revenue of $8.2 billion.

Schlumberger (SLB): Reported Q2 EPS of $0.68 in-line on revenue of $5.9 billion. 

Amazon.com (AMZN): Reported Q2 EPS of $0.45 missing estimates by -$0.07 on revenue of $6.6 billion.

American Express (AXP): Reported Q2 EPS of $0.84 beating estimates by +$0.06 on revenue of $6.9 billion. 

Chubb (CB): Reported Q2 EPS of $1.41 beating estimates by +$0.01 on revenue of $2.9 billion.

Compuware (CPWR): Reported FQ1 EPS of $0.06 in-line on revenue of $207 million. $219M.

E*TRADE Financial (ETFC): Reported Q2 EPS of $0.12 beating estimates by +$0.23 on revenue of $534 million. 

McDonalds (MCD): Reported Q2 EPS of $1.13 beating estimates by +$0.01 on revenue of $5.95 billion.

Microsoft (MSFT): Reported FQ4 EPS of $0.51 beating estimates by +$0.05 on revenue of $16 Billion.

·         Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude -0.4% to $78.99. Gold +0.2% to $1197.60.

·         Asia: Japan +2.3% to 9431. Hong Kong +1.1% to 20815. China +0.4% to 2572. India +0.1% to 18131.

·         Europe: London -0.2%. Paris +0.4%. Frankfurt +3.1%.