MORNING COFFEE

U.S. Economy struggling. The latest batch of economic reports released this morning paints a bad picture. The latest GDP number shows an economy that has stalled. The Q2 GDP came in at only 1.3%, down from 2 ½% in Q1.  Just a year ago GDP came in at 4%.  Economists had estimated that the economy had grown by 1.7%. More troubling is Durable Goods Orders which fell -13.2%. This is the lowest level since 2009.  Economists were looking for Durable Orders to fall only -5%. Additionally, jobless numbers still remain high. Initial jobless claims came in at 359,000 and the previous week’s numbers were revised higher to 385,000. At this point the numbers should be in the range of only 250,000.

Upgrades

IMAX (IMAX): Susquehanna raised their rating from Neutral to Positive and placed a target price of $23.00 on the company.

Dean Foods (DF): BMO Capital raised their rating from Market Perform to Outperform and placed a target price of $21.00 on the company. Pre-market: 16.73 +0.50 (3.08%)

Monsanto (MON): Wells Fargo raised their rating from Market Perform to Outperform and raised their target range from $82.00-$84.00 to $104.00-$106.00. Pre-market: 90.80 +1.31 (1.46%)

Downgrades

Alcoa (AA): Dahlman Rose lowered their rating from Buy to Hold. Pre-market: 8.92 +0.03 (0.34%)

Hewlett-Packard (HPQ): Jefferies lowered their rating from Hold to Underperform and lowered their target price from $17.00 to $14.00. Pre-market: 16.73 -0.38 (-2.22%)

Altera (ALTR): Jefferies lowered their rating from Buy to Hold and lowered their target price from $40.00 to $38.00. Pre-market: 34.47 -0.30 (-0.86%)

Coverage Initiated

General Motors (GM): Stifel Nicolaus initiated coverage with a Hold rating.

Yahoo! (YHOO): Goldman Sachs initiated coverage with a Buy rating and target price of $22.00. Pre-market: 15.90 +0.29 (1.86%)

Amgen (AMGN): Brean Murray initiated coverage with a Buy rating and target price of $96.00. Pre-market: 84.14 +0.68 (0.82%)

Becton Dickinson (BDX): RBC Capital initiated coverage with a Sector Perform rating and target price of $78.00.

Allstate Corp (ALL): Sun Trust initiated coverage with a Neutral rating.

Earning Reports

Thor Industries (THO): Reported EPS of $0.84 beating estimates by +$0.08. Pre-market: 38.26 +3.85 (11.19%)

McCormick (MKC): Reported EPS of $0.78 beating estimates by +$0.02. Pre-market: 60.77 -2.12 (-3.37%)

Sealy (ZZ): Reported EPS of $0.00 beating estimates by $0.03. Pre-market: 2.22 +0.08 (3.74%)

Markets: 
Futures at 8:46: Dow +0.47%. S&P +0.51%. Nasdaq +0.29%. Crude +1.29% to $91.13. Gold +0.70% to $1765.80.

Europe: London +0.27%. Paris +0.74%. Frankfurt +0.34%. 

Asia: Japan +0.48%. Hong Kong +1.14%. China +2.60%. India -0.28%. 

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MORNING COFFEE

U.S. Stock Futures Fall. World markets are lower today on continued concerns about the euro-zone debt crisis.  In Spain stock fell and yield surged after Catalonia, which comprises four provinces: Barcelona, Girona, Lleida and Tarragona fed independence concerns by announcing a snap election. Spain's benchmark 10-year bond rose as much as 23 basis points to 5.94%. In addition back here in the U.S. the Fed's Charles Plosser hurt sentiment after he questioned the effectiveness of the QE3 stimulus.

Upgrades

Transocean (RIG): Goldman Sachs raised their rating from Sell to Neutral and raised their target price from $52.00 to $54.00. Pre-market: 47.10 +0.23 (0.50%)

Downgrades

Chesapeake Energy (CHK): Stifel Nicolaus lowered their rating from Buy to Hold. Pre-market: 18.76 -0.33 (-1.73%)

Texas Instruments (TXN): Oppenheimer lowered their rating from Outperform to Perform. Pre-market: 27.53 -0.30 (-1.08%)

Electronic Arts (EA): Bank of America/Merrill Lynch lowered their rating from Buy to Neutral and lowered their target price from $16.00 to $15.00. Pre-market: 12.43 -0.25 (-1.97%)

Paychex (PAYX): First Analysis lowered their rating from Overweight to Equal Weight.

Intel (INTC): Caris lowered their rating from Buy to Above Average and lowered their target price from $29.00 to $26.00. Pre-market: 22.50 -0.03 (-0.16%)

Oracle (ORCL): Atlantic Equities lowered their rating from Overweight to Neutral and placed a target price of $33.00 on the company. Pre-market: 31.15 -0.15 (-0.48%)

Coverage Initiated

Navistar (NAV): Robert W. Baird initiated coverage with a Neutral rating.

Waste Management (WM): KeyBanc Capital Markets initiated coverage with a Hold rating. Pre-market: 32.10 +0.02 (0.06%)

Republic Services (RSG): KeyBanc Capital Markets initiated coverage with a Hold rating.

Tenet Healthcare (THC): Sun Trust initiated coverage with a Neutral rating.

Earning Reports

Copart (CPRT): Reported EPS of $0.35 beating estimates by +$0.01. Pre-market: 28.80 +1.40 (5.11%)

Markets: 

Futures at 8:20: Dow -0.04%. S&P -0.26%. Nasdaq -0.35%. Crude -1.43% to $90.06. Gold -0.86% to $1751.40.

Asia: Japan -2.03%. Hong Kong -0.83%. China -1.24%. India -0.33%. 

Europe: London -1.31%. Paris -2.20%. Frankfurt -1.96%. 

MORNING COFFEE

Cable Providers Look At Gaming. Just as Nintendo (NTDOY) prepares to roll out their new Wii U gaming system reports say major cable providers are looking to provide the same gaming experience.  Reports say that AT&T (T), Comcast (CMCSA), Time Warner Cable (TWC) and Verizon (VZ), are all in the process of putting together the technology that would eliminate the need for a console.  If the cable providers truly provide the same gaming experience the move would be a major threat to console makers Nintendo (NTDOY), Microsoft (MSFT) and Sony (SNE).

Upgrades

Safeway (SWY): BMO Capital raised their rating from Market Perform to Outperform and placed a target price of $25.00 on the company. Pre-market: 16.40 +0.46 (2.89%)

Buffalo Wild Wings (BWLD): RBC Capital raised their rating from Sector Perform to Outperform and raised their target price from $81.00 to $95.00. Pre-market: 83.59 +1.24 (1.51%)

Downgrades

Coinstar (CSTR): Northland Securities lowered their rating from Outperform to Market Perform and lowered their target price from $96.00 to $52.00.

Nabors Industries (NBR): Global Hunter lowered their rating from Accumulate to Neutral and lowered their target price from $17.00 to $16.00. Pre-market: 15.00 -0.08 (-0.53%)

Paychex (PAYX): UBS lowered their rating from Buy to Neutral and maintained their target price of $35.00. Pre-market: 32.95 -1.43 (-4.16%)

Automatic Data Processing (ADP): UBS lowered their rating from Buy to Neutral and lowered their target price from $64.00 to $59.00. Pre-market: 58.15 -0.71 (-1.21%)

Nokia (NOK): BMO Capital lowered their rating from Market Perform to Underperform and placed a $2.00 target price on the company. Pre-market: 2.77 +0.03 (1.09%)

Coverage Initiated

Walgreen (WAG):  Goldman Sachs initiated coverage with a Conviction Buy and target price of $43.00. Pre-market: 36.24 +0.57 (1.60%)

NVIDA (NVDA): Roth Capital initiated coverage with a Buy rating and target price of $19.00. Pre-market: 13.71 +0.05 (0.37%)

Earning Reports

Paychex (PAYX): Reported EPS of $0.42 beating estimates by +$0.01. Pre-market: 32.95 -1.43 (-4.16%)

Red Hat (RHT): Reported EPS of $0.28 missing estimates by -$0.01. Pre-market: 55.85 -1.69 (-2.94%)

FactSet (FDS): Reported EPS of $1.08 beating estimates by +$0.02. Pre-market: 102.67 -0.13 (-0.13%)

Vail Resorts (MTN): Reported EPS of -$1.50 beating estimates by +$0.05.

Markets: 
Futures at 7:19: Dow +0.17%. S&P +0.09%. Nasdaq +0.20%. Crude +0.92% to $92.78. Gold +0.20% to $1768.20.

Europe: London +0.06%. Paris -0.15%. Frankfurt -0.14%. 

Asia: Japan +0.25%. Hong Kong +0.02%. China -0.19%. India +0.11%. 

MORNING COFFEE

Goldman Sachs Forecasts Big Jump In Commodity Prices. In a report from Goldman Sachs Group (GS) an analyst predicts a 18.2% jump in commodities in the next 12 months, with energy and industrial metals showing the largest gains. The report forecast energy will gain 26.5% followed by industrial metals with a 10% gain. The report goes on to say that precious metals will gain 6%, livestock 4.5%. Agriculture should lose 5% over the next 12 months. DBC close: 28.63 0.00 (0.00%), GLD Pre-market: 170.62 -1.34 (-0.78%)

Upgrades

PVH (PVH): Piper Jaffray raised their rating from Neutral to Overweight and raised their target price from $93.00 to $109.00.

Allergan (AGN): CLSA raised their rating from Underperform to Outperform and raised their target price from $98.00 to $103.00.

Canadian National Railroad (CNI): TD Securities raised their rating from Hold to Buy. Pre-market: 88.10 +0.03 (0.03%)

Downgrades

Regions Financial (RF): Compass Point lowered their rating from Buy to Neutral.

Valero Energy (VLO): Argus lowered their rating from Buy to Hold.

Carnival Corp (CCL): Topeka lowered their rating from Buy to Hold.

Darden Restaurants (DRI): Susquehanna lowered their rating from Positive to Neutral.

Darden Restaurants (DRI): JPMorgan lowered their rating from Overweight to Neutral and lowered their target price from $63.00 to $61.00.

Micron Technology (MU): Pacific Crest lowered their rating from Outperform to Sector Perform. Pre-market: 6.23 -0.13 (-2.04%)

Baxter International (BAX): Deutsche Bank lowered their rating from Buy to Hold and maintained their target price of $63.00 on the company.

United States Steel (X): Citigroup lowered their rating from Buy to Neutral and lowered their target price from $30.00 to $23.00. Pre-market: 19.27 -0.67 (-3.36%)

Coverage Initiated

Genworth Financial (GNW): Macquarie initiated coverage with a Neutral rating and target price of $7.00.

Earning Reports

Lennar (LEN): Reported EPS of $0.40 beating estimates by +$0.12. Pre-market: 38.90 +1.39 (3.71%)

Markets: 
Futures at 7:38: Dow -0.33%. S&P -0.29%. Nasdaq -0.30%. Crude -1.07% to $91.93. Gold -0.85% to $1763.00.

Europe: London -0.54%. Paris -1.10%. Frankfurt -0.70%. 

Asia: Japan -0.45%. Hong Kong -0.19%. China +0.32%. India -0.42%. 

MORNING COFFEE

California Debt Crisis Worse Than Expected. The State Budget Crisis Task Force has just said that California’s debt crisis is much worse than previously stated.  When California Governor Jerry Brown took office last year he said that the state was facing a "wall of debt." At that time he said the debt stood at $28 billion. Now the State Budget Crisis Task Force announced that the true debt is actually at a staggering $167 billion to $335 billion. The new figures include many of off-book items such as pledges to provide pensions to public workers, healthcare for retirees, and $40 billon to improve drinking water.  The rating agency Moody’s said in a report that that the growing fiscal distress in many California cities is putting bondholders at risk.  Three cities have already filed for bankruptcy and it appears as if Atwater, CA will be next. Moody’s also said that it also will examine the outlook for municipal bonds in other troubled states. Analysts believe that Michigan and Nevada may be examined next.

Upgrades

ConAgra Foods (CAG): UBS raised their rating from Hold to Buy and raised their target price from $27.00 to $31.00.

Downgrades

Charles Schwab (SCHW): Evercore lowered their rating from Equal Weight to Underweight. Pre-market: 13.44 0.00 (0.00%)

E*Trade Financial (ETFC): Evercore lowered their rating from Equal Weight to Underweight. Pre-market: 9.15 -0.07 (-0.76%)

Cooper Tire (CTB): KeyBanc Capital Markets lowered their rating from Buy to Hold.

Goodyear Tire (GT): KeyBanc Capital Markets lowered their rating from Buy to Hold. Pre-market: 13.20 -0.18 (-1.35%)

Coverage Initiated

Google (GOOG): Cantor Fitzgerald initiated coverage with a Buy rating and target price of $830.00. Pre-market: 732.49 +4.37 (0.60%)

Automatic Data Processing (ADP): BMO Capital initiated coverage with an Outperform and target price of $67.00. After Hours: 58.64 0.00 (0.00%)

Burger King Worldwide (BKW): UBS initiated coverage with a Neutral rating and target price of $15.50.

Blue Nile (NILE): Deutsche Bank initiated coverage with a Buy rating and target price of $53.00.

AOL (AOL): Blue Nile (NILE): Deutsche Bank initiated coverage with a Buy rating and target price of $40.00.

Yahoo! Inc. (YHOO): Cantor Fitzgerald initiated coverage with a Hold rating and target price of $16.00.  Pre-market: 15.63 -0.16 (-1.01%)

Paychex (PAYX): BMO Capital initiated coverage with an Market Perform and target price of $34.00. After Hours: 34.47 0.00 (0.00%)

Priceline.com (PCLN): Cantor Fitzgerald initiated coverage with a Buy rating and target price of $740.00.  After Hours: 633.45 -0.32 (-0.05%)

Expedia (EXPE): Cantor Fitzgerald initiated coverage with a Buy rating and target price of $64.00.  Pre-market: 58.02 +0.93 (1.63%)

ORBITZ (OWW): Cantor Fitzgerald initiated coverage with a Hold rating and target price of $3.00.  

Shutterfly (SFLY): Cantor Fitzgerald initiated coverage with a Hold rating and target price of $33.00.  

Earning Reports

Cintas (CTAS): Reported EPS of $0.60 beating estimates by +$0.02. After Hours: 41.70 +0.51 (1.24%)

Oracle (ORCL): Reported EPS of $0.53 in-line with estimates. Pre-market: 32.36 +0.10 (0.31%)

Darden Restaurants (DRI): Reported EPS of $0.85 beating estimates by +$0.01. Pre-market: 55.00 +0.28 (0.51%)

Markets: 
Futures at 7:13: Dow +0.30%. S&P +0.28%. Nasdaq +0.28%. Crude +0.62% to $92.99. Gold +0.28% to $1775.10.

Europe: London +0.02%. Paris +0.37. Frankfurt +0.87%. 

Asia: Japan +0.25%. Hong Kong +0.70%. China +0.09%. India +2.20%.