MORNING COFFEE

Large Banks Get Downgrades. In an expected move 15 of the largest banks had their rating downgrades by 1 to 3 notches by the rating agency Moody’s (MCO).  The only bank to receive a 3 notch downgrade was Credit Suisse (CSGN).  In the U.S. 5 of the largest banks received a downgrade.  They included Bank of America (BAC) cut one notch, to BAA2 from BAA1, Citigroup (C) cut two notches, to BAA2 from A3, Goldman Sachs (GS) cut by two notches, to A3 from A1, JPMorgan Chase (JPM) cut by two notches, to AA3 from A2,  Morgan Stanley (MS) cut by two notches, to BAA1 from A2. The downgrades will make it even harder for individuals and businesses to get loans and slow down an already slowing an economy.  Other banks downgraded included: Barclays (BCS), BNP Paribas (BNPQY), Credit Agricole, Deutsche Bank (DB),  HSBC (HSBC),  Royal Bank of Canada (RBKDF), Royal Bank of Scotland (RBS) and Societe Generale (SCGLY)

Upgrades

Watson Pharmaceuticals (WPI): Berstein raised their rating from Market Perform to Outperform and raised their target price from $80.00 to $82.00.

Coverage Initiated

PPG Industries (PPG): Robert W. Baird initiated coverage with an Outperform rating and target price of $120.00.

Sherwin-Williams (SHW): Robert W. Baird initiated coverage with a Neutral rating and target price of $13.00.

Cardinal Health (CAH): Mizuho Baird initiated coverage with a Neutral rating and target price of $99.00.

Facebook (FB): Nomura initiated coverage with a Buy rating and target price of $40.00. Pre-market: 32.33 +0.49 (1.54%)

Polo Ralph Lauren (RL): JPMorgan initiated coverage with a Neutral rating and target price of $155.00.

VF Corp (VFC): JPMorgan initiated coverage with a Overweight rating and target price of $167.00.

Downgrades

ITT Corp. (ITT): FBR Capital lowered their rating from Market Perform to Underperform and placed a target price of $15.50 on the company.

Ryder Systems (R): Wells Fargo lowered their rating from Outperform to Market Perform to and lowered their target range from $62.00-$65.00 to $41.00-$45.00. Pre-market: 36.70 -4.05 (-9.94%)

Coverage Reiterated/Price Target Changed

Celgene (CELG): Cantor Fitzgerald reiterated their Buy rating and lowered their target price from $90.00 to $73.00. Pre-market: 60.30 +0.86 (1.44%)

Celgene (CELG): The Benchmark Company reiterated their Buy rating and lowered their target price from $90.00 to $73.00. Pre-market: 60.30 +0.86 (1.44%)

Earning Reports

Darden Restaurants (DRI): Reported EPS of  $1.16 in-line with estimates. Pre-market: 48.90 -1.49 (-2.96%)

Markets:
Futures at 7:02: Dow +0.40%. S&P +0.49%. Nasdaq +0.42%. Crude +0.60% to $78.67. Gold +0.26% to $1569.50.

Europe: London -0.77%. Paris -0.39%. Frankfurt -0.58%. 

Asia: Japan -0.29%. Hong Kong -1.40%. China -1.40%. India -0.35%.