Morning Coffee Pre-Market Wall Street News

U.S. GDP Tops Estimates. The advanced GDP reading on the U.S. economy was released this morning and topped Wall Street estimates. Economist had expected that the U.S. economy had slowed to a growth rate of only 1.1% down from the previous quarters 1.8% growth.  For Q2 the U.S. economy grew by 1.7%, however Q1 GDP was revised downwards to only 1.1% from the prior 1.8%.

Areas of strength in the economy included: Residential fixed investment which increased 13.4%, personal consumption which rose 1.8% and spending on durable goods which increased 6.5%.

Upgrades:

Boyd Gaming (BYD): JPMorgan raised their rating from Underweight to Neutral and raised their target price from $8.00 to $12.00.

Fresh Del Monte (FDP): CL King raised their rating from Neutral to Buy.

Downgrades:

Barclays PLC (BCS): Societe Generale lowered their rating from Buy to Hold.

Diego PLC ADS (DEO): Canaccord lowered their rating from Buy to Hold.

Jacobs Engineering (JEC): Johnson Rice lowered their rating from Overweight to Equal Weight.

Mosaic (MOS): Scotia lowered their rating from Outperform to Sector Perform.

R.R. Donnelley & Sons (RRD): The Benchmark Company lowered their rating from Buy to Hold and lowered their target price from $20.00 to $15.00.

Sprint Nextel (S): FBR Capital lowered their rating from Outperform to Market Perform and placed a target price of $6.00 on the company.

Earning Reports:

AFLAC (AFL): Reported EPS of $1.62 beating estimates by +$0.11.

Amgen (AMGN): Reported EPS of $1.89 beating estimates by +$0.15.

Anheuser-Bush InBev (BUD): Reported EPS of $0.93 missing estimates by -$0.12.

Comcast (CMCSA): Reported EPS of $0.65 beating estimates by +$0.02.

Fiserv (FISV): Reported EPS of $1.50 beating estimates by +$0.06.

MasterCard (MA): Reported EPS of $6.96 beating estimates by +$0.30.

Symantec (SYMC): Reported EPS of $0.44 beating estimates by +$0.08.

Markets: 
Futures at 6:15: Dow 0.0%. S&P +0.5%. Nasdaq 0.0%. Crude +0.2% to $103.33. Gold +0.5% to $1332. U.S. 10 Year -16/32 2.674%

Europe: London +0.6%. Paris +0.02%. Frankfurt +0.08%. 

Asia: Japan -1.45% to 13668. Hong Kong -0.32% to 21884. China +0.19% to 1994. India -0.05% to 19,339. 

Morning Coffee Pre-Market Wall Street News

Omnicom and Publicis to Merge. 

Omnicom Group (OMC) and Publicis Groupe (PGPEF) have agreed to merger that creating the world’s largest advertising firm valued at $35.1B. Publicis Chief Executive Maurice Levy said "This is a new company for a new world," and went on to say "It will be able to face the exponential development of new internet giants like Facebook and Google, changing consumer behavior, the explosion of big data, as well as handle the blurring of roles of all the players in the market." Under the deal, Publicis shareholders will receive one newly issued ordinary share of Publicis Omnicom Group for each Publicis share they own, plus a special dividend of 1.00 euro per share. Omnicom shareholders will receive 0.813 newly issued ordinary shares of Publicis Omnicom Group for each Omnicom share they own, together with a special dividend of $2.00 per share.

Upgrades:

Abbott Labs (ABT): ResearchTeam raised their target price from Reduce to Hold.

Apple (AAPL): ResearchTeam raised their target price from Reduce to Hold.

Bank of New York Mellon (BK): Guggenheim raised their rating from Neutral to Buy.

Harley Davidson (HOG): S&P raised their rating from *** Stars to **** Stars.

Hormel Foods (HRL): Credit Suisse raised their rating from Neutral to Outperform and raised their target price from $39.00 to $46.00.

Downgrades:

Cadence Design Systems (CDNS): ResearchTeam lowered their rating from Hold to Reduce.

Expedia (EXPE): Lazard Capital lowered their rating from Buy to Neutral. Pre-market: 47.85 +0.65 (1.38%)

ING Groep NV (ING): BTIG lowered their rating from Buy to Neutral.

Microsoft (MSFT): Atlantic Equities lowered their rating from Overweight to Neutral and lowered their target price from $35.00 to $33.00. Pre-market: 31.45 -0.17 (-0.54%)

Ryder Systems (R): ResearchTeam lowered their rating from Hold to Reduce.

Tower Watson (TW): ResearchTeam lowered their rating from Accumulate to Hold.

T. Rowe Price (TROW): RBC Capital lowered their rating from Outperform to Sector Perform and lowered their target price from $82.00 to $80.00.

Coverage Initiated:

Smith & Wesson (SWHC): Dougherty initiated coverage with a Buy and target price of $14.00. Pre-market: 11.12 +0.05 (0.45%)

Earning Reports:

Franklin Resources (BEN): Reported EPS of $0.86 beating estimates by +$0.01. Pre-market: 49.26 +0.60 (1.23%)

Hertz Global (HTZ): Reported EPS of $0.45 in-line with estimates. Pre-market: 26.10 -0.79 (-2.94%)

Loews Corp (L): Reported EPS of $0.69 missing estimates by -$0.10. Pre-market: 48.70 +2.65 (5.75%)

Tenneco (TEN): Reported EPS of $1.10 beating estimates by +$0.01. Pre-market: 49.90 +1.16 (2.38%)

Wynn Resorts (WYNN): Reported EPS of $1.51 missing estimates by -$0.06. Pre-market: 129.60 -1.38 (-1.05%)

Markets: 
Futures at 7:00: Dow -0.17%. S&P -0.21%. Nasdaq -0.15%. Crude +0.53% to $105.25. Gold +0.83% to $1332.90. U.S. 10 Year -4/32 2.584%

Europe: London +0.30%. Paris +0.32%. Frankfurt +0.26%. 

Asia: Japan -3.32% to 13661. Hong Kong -0.54% to 21850. China -1.72% to 1976. India -0.78% to 19,593. 

Morning Coffee Pre-Market Wall Street News

Muni Bond Funds Experience Exodus. Through Wednesday Municipal bond funds experienced outflows of over $1.2B since Detroit declared bankruptcy. This marks the ninth week in a row of net outflows that began after the Fed hinted at changing their current stimulus plan.  Yesterday in court Bankruptcy Judge Steven Rhodes suspended the lawsuits by the unions calling the Bankruptcy unconstitutional according to Michigan law. The spike in net outflows is due to the concern that there are many other large cities like Chicago and Los Angeles that are in the same financial position as Detroit.

Upgrades:

Advance Auto Parts (AAP): Deutsche Bank raised their rating from Hold to Buy and raised their target price from $82.00 to $92.00.

Campbell Soup (CPB): Credit Suisse raised their rating from Underperform to Neutral and raised their target price from $44.00 to $48.00.

L-3 Communications (LLL): Bank of America Merrill Lynch raised their rating from Underperform to Neutral and raised their target price from $73.00 to $97.00.

Tesla Motors (TSLA): Deutsche Bank raised their rating from Hold to Buy and raised their target price from $50.00 to $160.00.

Downgrades:

Bed Bath & Beyond (BBBY): BB&T lowered their rating from Buy to Hold.

Diamond Offshore (DO): Williams Capital lowered their rating from Buy to Hold and lowered their target price from $86.00 to $77.00.

Dolby Labs (DBL): Dougherty lowered their rating from Buy to Neutral.

Expedia (EXPE): Raymond James lowered their rating from Outperform to Market Perform.

Facebook (FB): Argus lowered their rating from Buy to Hold.

Noble Energy (NBL): Johnson Rice lowered their rating from Focus List to Overweight.

Viacom (VIAB): Stifel lowered their rating from Buy to Hold.

Southwest Airlines (LUV): Raymond James lowered their rating from Outperform to Market Perform.

Teradyne (TER): Pacific Crest lowered their rating from Outperform to Sector Perform.

Zanga (ZNGA): Needham lowered their rating from Buy to Hold.

Earning Reports:

Amazon.com (AMZN): Reported EPS of -0.02 missing estimates by -$0.07. Pre-market: 300.28 -3.12 (-1.03%)

Chubb (CB): Reported EPS of $1.77 beating estimates by +$0.20.

Dolby Labs (DLB): Reported EPS of $0.47 beating estimates by +$0.05.

Dole Food (DOLE): Reported EPS of $0.28 beating estimates by +$0.17.

Expedia (EXPE): Reported EPS of $0.64 missing estimates by -$0.20. Pre-market: 50.19 -14.81 (-22.78%)

NETGEAR (NTGR): Reported EPS of $0.62 beating estimates by +$0.06.

Republic Services (RSG): Reported EPS of $0.43 missing estimates by -$0.06.

Starbucks (SBUX): Reported EPS of $0.55 beating estimates by +$0.02.

Zynga (ZNGA): Reported EPS of -$0.01 beating estimates by +$0.03.

Markets: 
Futures at 8:41: Dow -0.41%. S&P -0.54%. Nasdaq -0.18%. Crude -0.89% to $104.56. Gold -0.39% to $1323.70.  U.S.10 Year +6/32 2.549%

Europe: London -0.38%. Paris +0.23%. Frankfurt -0.70%. 

Asia: Japan -2.97% to 14130. Hong Kong +0.31% to 21969. China -0.51% to 2011. India -0.29% to 19,750. 

Morning Coffee Pre-Market Wall Street News

Apple Beat EPS Estimates. Apple (AAPL) reported FQ3 earnings that beat Wall Street expectations. EPS was report at $7.47, but net profit dropped to $6.9B from $8.8B, while revenue increased 1% to $35.3B. The company said that iPhone sales came in at 31.2M, up 20% from a year earlier. Gross margins fell along with sales in Europe and China.  iPad sales came in at 14.6M disappointing analysts. Some on Wall Street are pointing to the falling margins being a direct result of competition from Google’s (GOOG) Android based devices. Pre-market: 439.24 +20.25 (4.83%)

Upgrades:

Apple (AAPL): BMO Capital raised their rating from Market Perform to Outperform and maintained their target price of $480.00.

D.R. Horton (DHI): Compass Point raised their rating from Neutral to Buy.

Forest Labs (FRX): Susquehanna raised their rating from Negative to Neutral and raised their target price from $30.00 to $40.00.

VMware (VMW): Nomura raised their rating from Neutral to Buy.

VMware (VMW): Raymond James raised their rating from Market Perform to Outperform.

Wendy’s (WEN): Goldman Sachs raised their rating from Sell to Neutral and raised their target price from $5.00 to $7.50.

Downgrades:

Arch Coal (ACI): Tudor Pickering lowered their rating from Buy to Accumulate.

Broadcom (BRCM): B. Riley lowered their rating from Buy to Neutral.

Broadcom (BRCM): BMO Capital lowered their rating from Outperform to Market Perform.

Broadcom (BRCM): Credit Suisse lowered their rating from Outperform to Neutral and lowered their target price from $45.00 to $32.00.

Broadcom (BRCM): RBC Capital lowered their rating from Outperform to Sector Perform.

Broadcom (BRCM): Mizuho lowered their rating from Buy to Neutral.

Broadcom (BRCM): William Blair lowered their rating from Outperform to Market Perform.

Broadcom (BRCM): Citigroup lowered their rating from Buy to Neutral.

DISH Network (DISH): Wunderlich lowered their rating from Buy to Hold and lowered their target price from $50.00 to $42.00.

Norfolk Southern (NSC): Bank of America Merrill Lynch lowered their rating from Neutral to Underperform and lowered their target price from $81.00 to $74.00.

Starwood Hotels (HOT): UBS lowered their rating from Buy to Neutral and maintained their target price of $71.00.

Coverage Initiated:

Costco (COST): Williams Capital initiated coverage with a Buy rating.

Earning Reports:

Apple (AAPL): Reported EPS of $7.47 beating estimates by +$0.19. Pre-market: 439.24 +20.25 (4.83%)

AT&T (T): Reported EPS of $0.67 missing estimates by -0.01. Pre-market: 35.35 -0.46 (-1.28%)

Boeing (BA): Reported EPS of $1.67 beating estimates by +$0.11. Pre-market: 109.15 +1.36 (1.26%)

Broadcom (BRCM): Reported EPS of $0.70 beating estimates by +$0.01.

Caterpillar (CAT): Reported EPS of $1.45 missing estimates by -0.25. Pre-market: 84.42 -1.10 (-1.29%)

Ford Motor (F): Reported EPS of $0.45 beating estimates by +$0.08.

General Dynamics (GD): Reported EPS of $1.81 beating estimates by +$0.19.

GlaxoSmithKline (GSK): Reported EPS of $0.26 in-line with estimates.

Intl Gaming Tech (IGT): Reported EPS of $0.33 beating estimates by +$0.02. Pre-market: 17.97 -0.33 (-1.80%)

Northrop Grumman (NOC): Reported EPS of $2.05 beating estimates by +$0.34.

Omnicare (OCR): Reported EPS of $0.90 beating estimates by +$0.03.

PepsiCo (PEP): Reported EPS of $1.31 beating estimates by +$0.12.

VMware (VMW): Reported EPS of $0.79 beating estimates by +$0.02. Pre-market: 80.69 +9.41 (13.20%)

Markets: 
Futures at 8:38: Dow +0.23%. S&P +0.28%. Nasdaq +1.01%. Crude -0.39% to $106.81. Gold +0.05% to $1334.90. 10 Year -21/32 2.590%

Europe: London -0.39%. Paris -0.43%. Frankfurt -0.20%. 

Asia: Japan -0.76% to 14731. Hong Kong +0.28% to 21969. China -1.27% to 2018. India -0.48% to 20,205. 

Morning Coffee Pre-Market Wall Street News

Apple Reports Earnings After Close.

Wall Street traders will be waiting for Apple (AAPL) to report their latest earnings after the close today. The company’s shares are well off their all time highs as many see the company’s sales hurting due to the increasing popularity of android based phones and tablets.  Wall Street analysts are expecting that the company will report EPS of $7.28 down from year ago earnings of $9.32. Other companies reporting after the bell today include AT&T (T), International Gaming Tech (IGT), Panera Bread (PNRA), VMware (VMW).

Upgrades:

Barrick Gold (ABX): Macquarie raised their rating from Underperform to Neutral. Pre-market: 17.61 +0.05 (0.28%)

Baker Hughes (BHI): Macquarie raised their rating from Neutral to Outperform and raised their target price from $48.00 to $54.00. Pre-market: 48.20 +0.69 (1.45%)

Baker Hughes (BHI): Cowen raised their rating from Market Perform to Outperform. Pre-market: 48.20 +0.69 (1.45%)

Hasbro (HAS): Needham raised their rating from Hold to Buy and placed a target price of $52.00 on the company.

Texas Instrument (TXN): SunTrust raised their rating from Reduce to Neutral and placed a target price of $40.00 on the company.

Downgrades:

Broadcom (BRCM): Pacific Crest lowered their rating from Outperform to Sector Perform. Pre-market: 32.50 -0.75 (-2.26%)

JDS Uniphase (JDSU): MKM Partners lowered their rating from Buy to Neutral and lowered their target price from $24.00 to $15.00. Pre-market: 14.90 -0.25 (-1.65%)

Yahoo! (YHOO): Needham lowered their rating from Buy to Hold.

Netflix (NFLX): Pacific Crest lowered their rating from Outperform to Sector Perform. Pre-market: 252.76 -9.20 (-3.51%)

Netflix (NFLX): Cantor Fitzgerald lowered their rating from Buy to Hold and placed a target price of $260.00 on the company. Pre-market: 252.76 -9.20 (-3.51%)

Coverage Initiated:

Aetna (AET): Stifel Buckingham initiated coverage with a Buy rating and target price of $80.00.

Alaska Air (ALK): Buckingham initiated coverage with a Buy rating and target price of $75.00. Pre-market: 62.32 +0.16 (0.26%)

BJ’s Restaurants (BJRI): Wunderlich initiated coverage with a Hold rating and target price of $42.00.

Buffalo Wild Wings (BWLD): Wunderlich initiated coverage with a Buy rating and target price of $117.00.

Cheesecake Factory (CAKE): Wunderlich initiated coverage with a Hold rating and target price of $46.00.

Chipotle Mexican Grill (CMG): Wunderlich initiated coverage with a Hold rating and target price of $430.00.

Panera Bread (PNRA): Wunderlich initiated coverage with a Hold rating and target price of $200.00.

Earning Reports:

Altria (MO): Reported EPS of $0.62 missing estimates by -$0.01.

CIT Group (CIT): Reported EPS of $0.91 in-line with estimates.

DuPont (DD): Reported EPS of $1.28 beating estimates by +$0.01.

Forest Labs (FRX): Reported EPS of $2.64 beating estimates by +$0.01.

Lockheed Martin (LMT): Reported EPS of $0.09 beating estimates by +$0.43.

Netflix (NFLX): Reported EPS of $0.49 beating estimates by +$0.10.

Ryder System (R): Reported EPS of $1.25 beating estimates by +$0.03.

Texas Instruments (TXN): Reported EPS of $0.42 beating estimates by +$0.01.

Wendy's (WEN): Reported EPS of $0.08 beating estimates by +$0.02.

Markets: 
Futures at 8:20: Dow +0.15%. S&P +0.2%. Nasdaq +0.23%. Crude -1.00% to $105.87. Gold -0.31% to $1331.60. U.S 10 Ten Year -10/32 2.523%

Europe: London +0.21%. Paris +0.20%. Frankfurt +0.26%.

Asia: Japan +0.82% to 14779. Hong Kong +2.33% to 21915. China +1.95% to 2044. India +0.71% to 20,302.