MORNING COFFEE

Spanish Government May Need Bailout. The eurozone crisis seems to be deepening just days after Spain asked for an EU bailout to save its banking system.  The bailout of the banking system will add an addition $125 billion (€100B) to Spain’s already huge debt problem and will increase government debt by around 10% of GDP.  Some economists are now saying that there is a 50% chance that the country itself will need a bailout.  Spanish yields are now at 6.62% just shy of its all time high of 6.72%. The cost of insuring Spanish debt has also risen today to an all time high. 

The turmoil also spread to Italy, the eurozone's third largest economy, where bond yields jumped to 6.15%.  Italy is scheduled to auction up to €4.5 billion of three-year and seven-year bonds Thursday which will test the markets appetite for Italian debt. The cost of insuring Italian debt is also higher today.  

The eurozone debt crisis also moved to today’s Dutch government bond auction.  The Dutch State Treasury Agency sold only €1.65 billion of 2033 Dutch State Loans.  The country had scheduled an auction target range of €1.5 billion to €2.5 billion.

Earning Reports

FactSet (FDS): Reported EPS of $1.05 beating estimates by +$0.01. Pre-market: 100.25 -4.32 (-4.13%)

Upgrades

Dr. Pepper Snapple (DPS): Wells Fargo raised their rating from Market Perform to Outperform and raised their target range from $36.00-$38.00 to $45.00-$47.00.

Boeing (BA): Bernstein raised their rating from Market Perform to Outperform and raised their target price from $85.00 to $92.00 on the company.

Coverage Initiated

KKR & Co (KKR): Argus initiated coverage with a Buy rating and target price of $16.00.

Carlyle Group (CG): Citigroup initiated coverage with a Buy rating and target price of $29.00.

Carlyle Group (CG): Keefe Bruyette initiated coverage with an Outperform rating and target price of $26.00.

Carlyle Group (CG): Credit Suisse initiated coverage with an Outperform rating and target price of $37.00.

Carlyle Group (CG): JPMorgan initiated coverage with an Overweight rating and target price of $26.00.

Carlyle Group (CG): UBS initiated coverage with an Buy rating and target price of $25.00.

Carlyle Group (CG): Deutsche Bank initiated coverage with a Hold rating and target price of $22.00.

Carlyle Group (CG): Goldman Sachs initiated coverage with a Neutral rating and target price of $22.00.

Colombia Sportswear (COLM): Longbow initiated coverage with a Neutral rating.

Markets: 
Futures at 6:08: Dow +0.62%. S&P +0.44%. Nasdaq +0.58%. Crude -0.21% to $82.54. Gold -0.26% to $1592.70. 

Europe: London +0.36%. Paris +0.40%. Frankfurt +0.51%. 

Asia: Japan -1.02%. Hong Kong -0.43%. China -0.70%. India +1.17%.