MORNING COFFEE

Cisco Announces Buyback Plan. Cisco (CSCO) announced that has plans for up to $10 billion in additional stock repurchases. Cisco's shares are up +1.0% in the premarket.

KKR Looks To Buy Del Monte Foods. KKR (KKR) announced that it is in advanced talks to purchase Del Monte Foods (DLM).  Reports say that KKR has offered $18.50/share, valuing the company at $3.6 billion. In yesterday's trading, Del Monte rose +8.3% and shares are up + 9.8% in premarket trading.

China Raises Rates Again. In an attempt to slow inflation in China the government has raised its reserve ratio by another 50 bps, effective Nov. 29.  This is the fifth increase this year. Reports also say that the PBOC may have ordered select banks to set aside even more reserves.

Coverage Initiated

EMC (EMC): Wunderlich initiated coverage with a Buy rating and target price of $28.00.

VMware (VMW): Wunderlich initiated coverage with a Hold rating and target price of $80.00.

Coverage Reiterated/Price Target Changed

Dell (DELL): ISI Group reiterated their Hold rating and raised their target price from $15.00 to $16.00.

Intuit (INTC): ISI Group reiterated their Hold rating and raised their target price from $44.00 to $55.00.

Salesforce.com (CRM): FBR Capital reiterated their Market Perform rating and raised their target price from $85.00 to $110.00.

Salesforce.com (CRM): ISI Group reiterated their Buy rating and raised their target price from $125.00 to $148.00.

Earning Reports

Autodesk (ADSK): Reported Q3 EPS of $0.32 in-line on revenue of $477 million. 

Dell (DELL): Reported Q3 EPS of $0.45 beating estimates by +$0.12 on revenue of $15.4 billion.

Foot Locker (FL): Reported Q3 EPS of $0.33 beating estimates by +$0.16 on revenue of $1.3 billion. 

Gap (GPS): Reported Q3 EPS of $0.48 in-line on revenue of $3.7 billion.

Intuit (INTU): Reported FQ1 EPS of -$0.12 in-line on revenue of $532 million. 

Marvell Technology Group (MRVL): Reported Q3 EPS of $0.45 beating estimates by +$0.02 on revenue of $959 million.

Salesforce.com (CRM): Reported Q3 EPS of $0.32 beating estimates by +$0.01 on revenue of $429 million.

·         Futures at 7:00: Dow -0.2%. S&P -0.2%. Nasdaq -0.3%. Crude +0.3% to $82.12. Gold +0.3% to $1357.40.

·         Asia: Japan +0.1% to 10022. Hong Kong -0.1% to 23606. China +0.8% to 2889. India -1.7% to 19585.

·         Europe: London -0.8%. Paris -0.5%. Frankfurt -0.1%.

MORNING COFFEE

GM Begins Trading Today. General Motors (GM) priced its IPO at $33.00 and sold 478 million common shares and $4.35 billion in preferred shares.  If underwriters exercise options to cover overallotment, GM's IPO could reach $18.1 billion which would make it the second-largest in U.S. history. The government also sold 358 million shares, raising $11.8 billion and reducing its stake in the company to just under 37%. The government plans to further reduce its ownership in the company and has agreed to a six month lockup.

Fed Wants New Stress Test. The Federal Reserve announced that it plans to do another round of stress tests on top U.S. banks.  The test will affect the top 19 banks and require they submit capital plans. The banks subject to the stress tests are: AXP, BAC, BK, BBT, COF, C, FITB, GJM, GS, JPM, KEY, MET, MS, PNC, RF, STT, STI, USB, WFC.

Upgrades

Estee Lauder (EL): Oppenheimer raised their rating from Underperform to Perform.

Downgrades

Research In Motion (RIMM): Stifel Nicolaus lowered their rating from Buy to Hold and lowered their target price from $65.00 to $45.00.

Coverage Initiated

Motorola (MOT): Stifel Nicolaus initiated coverage with a Buy rating and target price of $11.00.

TiVo (TIVO): Stifel Nicolaus initiated coverage with a Hold rating.

Garmin (GRMN): Stifel Nicolaus initiated coverage with a Sell rating.

Chipotle Mexican Grill (CMG): Miller Tabak initiated coverage with a Hold rating and target price of $210.00.

Coverage Reiterated/Price Target Changed

Coca-Cola (KO): Stifel Nicolaus reiterated their Buy rating and raised their target price from $70.00 to $75.00.

Netease.com (NTES): Auriga U.S.A reiterated their Buy rating and raised their target price from $44.00 to $48.00.

Earning Reports

Staples (SPLS): Reported Q3 EPS of $0.41 beating estimates by +$0.01 on revenue of $6.5 billion. 

Applied Materials (AMAT): Reported FQ4 EPS of $0.36 beating estimates by +$0.05 on revenue of $2.9 billion.

Limited Brands (LTD): Reported Q3 EPS of $0.18 beating estimates by +$0.01 on revenue of $2 billion.

PetSmart (PETM): Reported Q3 EPS of $0.38 in-line on revenue of $1.4 billion. 

Sears Holdings (SHLD): Reported EPS of -$1.98 missing estimates by -$0.90.

Dollar Tree (DLTR): Reported ESP of $0.73 beating estimates by +$0.11.

·         Futures at 7:00: Dow +0.9%. S&P +1.1%. Nasdaq +1.25%. Crude +1.6% to $81.76. Gold +1.5% to $1356.40.

·         Asia: Japan +2.1% to 10014. Hong Kong +1.8% to 23637. China +0.9% to 2865. India +0.3% to 19931.

·         Europe: London +1.4%. Paris +2.4%. Frankfurt +1.4%.

MORNING COFFEE

Warren Buffett changes Stock Holdings. Warren Buffett’s Berkshire Hathaway (BRK.A/BRK.B) disclosed on their 13f filing to the SEC several changes to his investment portfolio.  The company whose total investment holdings exceed $110 billion is closely watched by investors around the world.  For the quarter ending September 30 the company’s publicly trading holdings decreased in value from $50.9 billion to $48.9 billion.  The company added two new holdings, reduced four holdings and liquidated five holdings.

Buffett purchased 2 million shares of Bank of New York Mellon (BK) and 3.9 million shares of Fiserv (FISV).  Additionally Buffett almost doubled his holdings of Johnson & Johnson (JNJ) to 42.6 million shares.

Companies liquidated include: Carmax (KMX), Republic Services (RSG), Iron Mountain (IRM), NRG Energy (NRG), and Home Depot (HD).

Reduced holding included: Comcast (CMCSA), Ingersoll-Rand (IR), Nike (NKE), Nalco (NLC).

Upgrades

Cree (CREE): Morgan Keegan raised their rating from Market Perform to Outperform and raised their target price from $48.00 to $75.00.

Autodesk (ADSK): ISI Group raised their rating from Hold to Buy and placed a target price of $43.00 on the company.

Downgrades

Bucyrus (BUCY): RBC Capital Markets lowered their rating from Outperform to Sector Perform.

Bucyrus (BUCY): Robert W. Baird lowered their rating from Outperform to Neutral.

Eaton Vance (EV): Ticonderoga lowered their rating from Neutral to Sell and placed a target price of $25.00 on the company.

Coverage Reiterated/Price Target Changed

Halliburton (HAL): Argus reiterated their Buy rating and raised their target price from $42.00 to $48.00.

Joy Global (JOYG): RBC Capital Markets reiterated their Outperform rating and raised their target price from $77.00 to $88.00.

Caterpillar (CAT): RBC Capital Markets reiterated their Outperform rating and raised their target price from $92.00 to $98.00.

Urban Outfitters (URBN): Stifel Nicolaus reiterated their Buy rating and lowered their target price from $45.00 to $40.00.

Urban Outfitters (URBN): Brean Murray reiterated their Buy rating and lowered their target price from $45.00 to $39.00.

Earning Reports

Home Depot (HD): Reported Q3 EPS of $0.51 beating estimates by +$0.03 on revenue of $16.6 billion.

Jacobs Engineering Group (JEC): Reported FQ4 EPS of $0.61 missing estimates by -$0.01 on revenue of $2.3 billion.

Nordstrom (JWN): Reported Q3 EPS of $0.53 beating estimates by +$0.01 on revenue of $2.1 billion.

Urban Outfitters (URBN): Reported Q3 EPS of $0.43 beating estimates by +$0.01 on revenue of $574 million.

Abercrombie & Fitch (ANF): Reported EPS $0.56 beating estimates by +$0.05.

The TJX Companies (TJX): Reported Q3 FY11 EPS of $0.92 beating estimates by +$0.01 on revenues of $5.5 billion.

·         Futures at 7:00: Dow -0.7%. S&P -0.6%. Nasdaq -0.8%. Crude -1.4% to $83.67. Gold -1.0% to $1355.50.

·         Asia: Japan -0.3% to 9797.1. Hong Kong -1.4% to 23693. China -4.0% to 2895. India -2.2% to 19865.

·         Europe: London -1.5%. Paris -1.7%. Frankfurt -0.8%.

MORNING COFFEE

October Retail Sales Show Nice Gains. The Commerce Department reported that retail sales for October rose +1.2%, the largest increase in seven months.  Economists were only looking for a gain of +0.7%. The strong showing was helped by strong demand for autos. Excluding autos, retail sales rose +0.4%.  This was the fourth straight increase in retail sales after sales had fallen in May and June.

Germany Pushes Ireland To Accept Bailout. Reports say that Germany is pushing Ireland into talks with the EU's Finance Ministry regarding a request for aid worth €80 billion ($110 billion) between 2011 and 2013. The Irish government is denying that there is a crisis and have stressed that the country is "fully funded till well into 2011. The government is scheduled to release their austerity budget next month, and say that their country’s "hard-won" sovereignty is being threatened by being forced to access the European Financial Stability Facility.

Upgrades

Union Pacific (UNP): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $110.00 to $120.00.

Downgrades

WellPoint (WLP): Stifel Nicolaus lowered their rating from Buy to Hold.

UnitedHealth (UNH): Stifel Nicolaus lowered their rating from Buy to Hold.

Akamai Tech (AKAM): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

Halliburton (HAL): Dahlman Rose reiterated their Buy rating and raised their target price from $47.00 to $53.00.

Peabody Energy (BTU): Brean Murray reiterated their Buy rating and raised their target price from $61.00 to $66.00.

Limited (LTD): RBC Capital Markets reiterated their Outperform rating and raised their target price from $32.00 to $37.00.

Dollar Tree (DLTR): RBC Capital Markets reiterated their Outperform rating and raised their target price from $55.00 to $60.00.

Abercrombie & Fitch (ANF): RBC Capital Markets reiterated their Sector Perform rating and raised their target price from $40.00 to $45.00.

Earnings

Lowe's (LOW): Reported EPS of $0.31 beating estimates by +$0.01.

·         Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq +0.55%. Crude +0.7% to $85.45. Gold +0.1% to $1366.30.

·         Asia: Japan +1.1% to 9828. Hong Kong -0.8% to 24027. China +1.0% to 3014. India +0.8% to 20310.

·         Europe: London +0.1%. Paris -0.8%. Frankfurt +0.2%.

MORNING COFFEE

G20 Meeting Ends With A Fizzle. World leaders wrapped up their two-day G-20 summit in Seoul South Korea.  In a joint statement the leaders pledged to "move toward more market-determined exchange rate systems" to reflect "underlying economic fundamentals." Additionally the language about 'undervalued' currencies was dropped due to Chinese pressures. Overall the meeting was short on specifics and pushed many issues and negotiations to future meetings. G-20 leaders also took on the Irish debt crisis.  The finance ministers from Germany, France and the U.K. issued a joint statement said holders of Irish government debt will not be required to take writedowns.

Eurozone Growth Slows. The eurozone economy grew at only +0.4% in Q3, down from Q2’s +1% growth.  Again most of the eurozone growth came from Germany’s economy which grew +0.7% for the quarter.

China Stocks Tank. Chinese stocks closed down -5.2% as reports say the Chinese government is preparing to limit foreigners' property purchases. Reports say that foreign companies will only be allowed to purchase property for their own use, and foreigners living in China will be able to buy one residential unit only for their own use. Additionally, there are more reports that may again raise interest rates to curb inflation.

Coverage Initiated

Williams-Sonoma (WSM): Robert W. Baird initiated coverage with an Outperform rating and target price of $42.00.

Bed Bath & Beyond (BBBY): Robert W. Baird initiated coverage with a Neutral rating and target price of $48.00.

Coverage Reiterated/Price Target Changed

NVIDIA (NVDA): Stifel Nicolaus reiterated their Buy rating and raised their target price from $14.00 to $16.00.

Viacom (VIA.B): RBC Capital Markets reiterated their Outperform rating and raised their target price from $42.00 to $45.00.

Tim Hortons (THI): RBC Capital Markets reiterated their Outperform rating and raised their target price from $42.00 to $45.00.

Walt Disney (DIS): RBC Capital Markets reiterated their Outperform rating and raised their target price from $39.00 to $41.00.

Advance Auto (AAP): RBC Capital Markets reiterated their Sector Perform rating and raised their target price from $66.00 to $70.00.

Earnings

DR Horton (DHI): Reported FQ4 EPS of -$0.03 beating estimates by +$0.01 on revenue of $926 million.

Wendy's/Arby's (WEN): Reported FQ3 EPS of $0.05 beating estimates by +$0.01.  The company also raised their quarterly dividend by 33% to $0.02/share, and authorized another $170 million to its stock repurchase program.

Disney (DIS): Reported FQ4 EPS of $0.45 missing estimates by -$0.01 on revenue of $9.7 billion.

Nvidia (NVDA): Reported Q3 EPS of $0.15 beating estimates by +$0.01 on revenue of $844 million.

·         Futures at 7:00: Dow -0.4%. S&P -0.6%. Nasdaq -0.6%. Crude -2.15% to $85.92. Gold -1.2% to $1386.20.

·          Asia: Japan -1.4% to 9725. Hong Kong -1.9% to 24223. China -5.2% to 2985. India -2.1% to 20157.

·          Europe: London -0.3%. Paris -1.0%. Frankfurt -0.3%.