MORNING COFFEE

President Obama Outlines Budget Cuts.  In a speech yesterday President Obama outlined his plan to tackle the $14 trillion national debt.  The plan covers 12 years versus the usual 10 years and hopes to reduce the deficit by $4 trillion.  In his speech, he said the plan includes a “debt fail-safe” trigger that would require Congress to pass across-the-board spending reductions if the nation’s debt-to-GDP ratio hasn’t stabilized by 2014. The savings outlined would come in the form of spending cuts including cuts to defense, Medicare and Medicaid. President Obama also said that Social Security should be reformed for long-term results.  Increased revenues would come by reforming the tax code, which would include tax increases, closing loopholes and ending some tax breaks including the home mortgage interest deduction.

Downgrades

Nabors Industries (NBR): Global Hunter Securities lowered their rating from Buy to Accumulate.

Coverage Initiated

Overstock.com (OSTK): The Benchmark Company initiated coverage with a Buy rating and target price of$18.00.

Coverage Resumed

Broadcom (BRCM): Auriga U.S.A resumed coverage with a Buy rating and placed a target price of $50.00 on the company.

Coverage Reiterated/Price Target Changed

Perrigo (PGRO): Caris & Company reiterated their Above Average rating and raised their target price from $93.00 to $103.00.

MetroPCS (PCS): Oppenheimer reiterated their Outperform rating and raised their target price from $17.00 to $19.00.

JPMorgan Chase (JPM): FBR Capital reiterated their Outperform rating and raised their target price from $53.00 to $56.00.

Earning Reports

Check Point Software (CHKP): Reported Q1 EPS of $0.64 beating estimates by +$0.02 on revenue of $281.3 million, beating estimates by +$4.6 million. Pre-market: 52.27 +0.29 (0.56%)

Hasbro (HAS): Reported Q1 EPS of $0.12 missing estimates by -$0.05 on revenue of $672 million, beating estimates by +$11.62 million. Pre-market: 45.22 -0.57 (-1.24%)

Progressive (PGR): Reported EPS of $0.55 beating estimates by +$0.11. Pre-Market: 21.45 +0.04 (0.19%)

Supervalu (SVU): Reported EPS of $0.44 beating estimates by +$0.10. Pre-market: 10.28 +1.20 (13.22%)

·         Futures at 7:00: Dow -0.4%. S&P -0.5%. Nasdaq -0.7%. Crude -0.4% to $106.70. Gold +0.2% to $1458.50.

·         Europe: London -1.0%. Paris -1.2%. Frankfurt -0.8%.

·         Asia: Japan +0.1% to 9654. Hong Kong -0.5% to 24014. China -0.2% to 3043. India +2.25%.