MORNING COFFEE

Debt Limit Will Be Hit Today. 

Reports say that the Treasury department is expected to announce that they will stop issuing and reinvesting in government securities of certain state pension plans.  The effort is an attempt to delay hitting the $14.3 trillion debt limit that otherwise would be hit today.   Republicans and many Blue Dog Democrats want a deal on reducing the deficit before they vote to raise the debt ceiling.  I believe that not addressing the deficit and raising the debt ceiling would be a mistake.  It’s like maxing out your credit card with no plans on how you would make the payments.  Then asking the credit card company to raise you charge limit, it would not happen.

Upgrades

Accenture (ACN): UBS raised their rating from Neutral to Buy and raised their target price from $54.00 to $63.00. Pre-market: 56.12 +0.38 (0.68%)

American Eagle (AEO): Susquehanna raised their rating from Neutral to Positive. Pre-market: 14.85  +0.16 (1.09%)

Jacobs (JEC): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $54.00 to $55.00. Pre-market: 47.00 +0.41 (0.88%)

Ford (F): Citigroup raised their rating from Hold to Buy and placed a target price of $18.00 on the company. Pre-market: 15.23 +0.15 (0.99%)

Sara Lee (SLE): JP Morgan Baird raised their rating from Neutral to Overweight and raised their target price from $21.00 to $23.00. Pre-market: 19.44 +0.18 (0.93%)

Downgrades

Knight Transportation (KNX): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their rating from $22.00 to $20.00.

Coverage Reiterated/Price Target Changed

Apple (AAPL): Credit Suisse reiterated their Outperform rating and placed a target price of $500.00 on the company. Pre-market: 339.70 -0.80 (-0.23%)

Mastercard (MA): Argus reiterated their Buy rating and placed a target price of $325.00 on the company. Pre-market: 279.00 -1.00 (-0.36%)

Earning Reports

Lowe's (LOW): Reported Q1 EPS of $0.34 missing estimates by -$0.02 on revenue of $12.18 billion, missing estimates by -$0.3 billion. Pre-market: 24.77 -0.99 (-3.84%)

JC Penny Co. (JCP): Reported Q1 EPS of $0.28 beating estimates by +$0.02. Pre-market: 40.85 +2.41 (6.27%)

·         Futures at 9:09: Dow -0.19%. S&P -0.26%. Nasdaq -0.15%. Crude -1.9% to $97.79. Gold -0.15% to $1491.30.

·         Europe: London -0.9%. Paris -1.5%. Frankfurt -1.3%.

·         Asia: Japan -0.9% to 9558.3. Hong Kong -1.4% to 22961. China -0.7% to 2850. India -1.0% to 18345.