MORNING COFFEE

Money Flows Out of EU and China. Money is continuing to flow out of the eurozone and seem to be accelerating, as investors move their money to stocks, bonds, forex, and real estate overseas in an attempt to protect themselves from a eurozone break-up or a series of bank failures. The outflow of funds is most pronounced in Greece, Portugal and Italy. Additionally China saw a capital outflow in November, which was the second month in a row. This was the first back-to-back outflow in over a decade. One economist is saying it’s just the beginning.

Upgrades

DTE Energy (DTE): Credit Suisse raised their rating from Neutral to Outperform and raised their target price from %56.00 to $59.00.

Downgrades

Telefonica S.A. (TEF): HSBC Securities lowered their rating from Overweight to Neutral. Pre-market: 16.92 +0.29 (1.74%)

Coverage Initiated

Abbott Labs (ABT): Cowen initiated coverage with a Neutral rating. Pre-market: 55.01 +0.12 (0.22%)

Groupon (GRPN): Barrington initiated coverage with an Outperform rating and target price of $30.00.

Vail Resorts (MTN): Credit Suisse initiated coverage with an Outperform rating and target price of $56.00.

Nestle(NSRGY): Credit Suisse initiated coverage with a Neutral. After Hours: 54.40 -0.02 (-0.04%)

Markets: 
Futures at 7:05: Dow +0.53%. S&P +0.69%. Nasdaq +0.58%. Crude +0.56% to $94.04. Gold -0.13% to $1595.90. 

Europe: London +0.35%. Paris +1.06%. Frankfurt +1.16%. 

Asia: Japan -1.26% to 8402. Hong Kong -1.18% to 18285. China -0.30% to 2225. India -0.72% to 15491.

MORNING COFFEE

Fitch Downgrades Banks. The rating agency Fitch announced that they downgraded the credit ratings of eight major banks to A from either A+ or AA-. Banks downgraded included Bank of America (BAC), Barclays (BCS), Goldman Sachs (GS) and Morgan Stanley (MS). The downgrades were due to the fact that the banks’ are "particularly sensitive" to economic and regulatory challenges.

Upgrades

Buffalo Wild Wings (BWLD): Miller Tabak raised their rating from Hold to Buy and raised their target price from $63.00 to $78.00.

Downgrades

Research In Motion (RIMM): Brigantine lowered their rating from Buy to Hold.

Research In Motion (RIMM): Atlantic Equities lowered their rating from Neutral to Underweight and lowered their target price from $26.00 to $11.00.

Coverage Initiated

Advance Auto Parts (AAP): Piper Jaffrey initiated coverage with an Overweight rating and target price of $83.00.

O’Reilly Automotive (ORLY): Piper Jaffrey initiated coverage with an Overweight rating and target price of $94.00.

Wells Fargo (WFC): UBS initiated coverage with a Neutral rating and target price of $27.00.

Earning Reports

Accenture (ACN): Reported EPS of $0.96 beating estimates by +$0.02.

Adobe Systems (ADBE): Reported EPS of $0.67 beating estimates by +$0.07.

Darden Restaurants (DRI): Reported EPS of $0.41 missing estimates by -$0.01.

Markets: 
Futures at 7:00: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude -0.2% to $93.68. Gold +1.05% to $1593.70. 

Europe: London +0.5%. Paris -0.1%. Frankfurt -0.1%. 

Asia: Japan +0.3% to 8402. Hong Kong +1.4% to 18285. China +2.0% to 2225. India -2.2% to 15491. 

MORNING COFFEE

Moody’s Put’s EU on Review. The rating agency Moody’s Investors Service announced that they will review the ratings of all European Union countries.  This comes after the highly visible EU summit failed to produce “decisive policy measures” to end the region’s debt turmoil. Standard & Poor’s had also previously announced that the company was reviewing the ratings of EU nations for a possible downgrade.  This included the AAA rated Germany.

Upgrades

MetroPCS (PCS): Mizuho raised their rating from Neutral to Buy and raised their target price from $8.50 to $10.50.

Leap Wireless (LEAP): Mizuho raised their rating from Neutral to Buy and raised their target price from $8.00 to $9.50.

Downgrades

First Solar (FSLR): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $80.00 to $35.00. Pre-market: 33.91 +0.46 (1.38%)

E*Trade Financial (ETFC): Raymond James lowered their rating from Strong Buy to Market Perform.

Decker Outdoors (DECK): Sterne Agee lowered their rating from Buy to Underperform and placed a target price of $72.00 on the company. Pre-market: 88.80 -6.79 (-7.10%)

AT&T (T): Macquarie lowered their rating from Neutral to Underperform and placed a target price of $26.50 on the company. Pre-market: 29.01 +0.20 (0.69%)

DirecTV (DTV): Nomura lowered their rating from Neutral to Reduce and placed a target price of $32.00 on the company. Pre-market: 45.01 -0.35 (-0.77%)

Baxter International (BAX): Goldman Sachs lowered their rating from Conviction Buy to Buy and lowered their target price from $60.00 t0 $59.00. Pre-market: 48.50 +0.09 (0.19%)

Boston Scientific (BSX): Goldman Sachs lowered their rating from Neutral to Sell and lowered their target price from $60.00 t0 $59.00. Pre-market: 5.05 -0.08 (-1.56%)

Coverage Initiated

Cree (CREE): Maxim Group initiated coverage with a Buy rating and target price of $45.00. Pre-market: 22.62 +0.58 (2.63%)

Amazon.com (AMZN): Morgan Keegan initiated coverage with an Outperform rating and target price of $210.00. Pre-market: 182.10 +1.89 (1.05%)

Earning Reports

FedEx (FDX): Reported EPS of $1.57 beating estimates by +$0.04. Pre-market: 80.48 +3.19 (4.13%)

Pier 1 Imports (PIR): Reported EPS of $0.21 in line with estimates.

Rite Aid (RAD): Reported EPS of -$0.06 beating estimates by +$0.7. Pre-market: 1.22 +0.08 (7.02%)

Winnebago Inds (WGO): Reported EPS of $0.04 missing estimates by -$0.02.

Markets: 
Futures at 8:35: Dow +0.98%. S&P +1.13%. Nasdaq +0.96%. Crude +0.85% to $95.77. Gold +0.33% to $1592.20. 

Europe: London +1.20%. Paris +1.48%. Frankfurt +1.98%. 

Asia: Japan -1.66% to 8377. Hong Kong -1.78% to 18027. China -2.14% to 2181. India -0.28% to 15836. 

MORNING COFFEE

Italian Debt Sends Market Lower. After highly visible meetings to solve the EU debt crisis, the crisis is continuing.  Italian yields rose to a new euro-era high of 6.47% in a sale of €3B of five-year bonds.  This surpassed the previous high of 6.29%. In the secondary market, 10-year yields were up midday in Europe after initially falling. Additionally, there are now reports that credit markets in the U.S. are beginning to tighten due to the EU crisis.

Upgrades

Avon Products (AVP): Caris & Company raised their rating from Average to Above Average and raised their target price from $19.00 to $21.00.

Downgrades

Kohl’s (KSS): Deutsche Bank lowered their rating from Buy to Hold and lowered their target price from $57.00 to $53.00.

Best Buy (BBY): RBC Capital lowered their rating from Top Pick to Sector Perform and lowered their target price from $32.00 to $28.00.

Toll Brothers (TOL): Stifel Nicolaus lowered their rating from Hold to Sell.

DR Horton (DHI): Stifel Nicolaus lowered their rating from Hold to Sell.

Altria (MO): Stifel Nicolaus lowered their rating from Buy to Hold.

Coverage Initiated

Cintas (CTAS): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $36.00.

Netflix (NFLX): Goldman Sachs initiated coverage with a Neutral rating and target price of $82.00.

Earning Reports

Joy Global (JOY): Reported EPS of $1.90 beating estimates by +$0.03.

Markets: 
Futures at 7:00: Dow -0.2%. S&P -0.1%. Nasdaq -0.35%. Crude -1.0% to $99.15. Gold -1.9% to $1630.90.

Europe: London +0.1%. Paris -1.7%. Frankfurt -1.4%. 

Asia: Japan -0.4% to 8519. Hong Kong -0.5% to 18354. China -0.9% to 2229. India -0.76% at 15881. 

MORNING COFFEE

EU Reaches Agreement without UK. 23 EU nations have increase their fiscal coordination and agreed that central banks will loan the IMF €200B ($267B) to lend to distressed EU members.  But U.K vetoed the measure, after not receiving protection for its financial sector.  The U.K government also warned that the new bloc would not be able to use EU resources.  Despite new doubt that the eurozone will be able to enforce its new fiscal rules U.S. stock futures are higher this morning.

Upgrades

Duke Energy (DUK):FBR Capital raised their rating from Underperform to Market Perform. Pre-market: 20.70 +0.21 (1.02%)

Yum! Brands (YUM): Bernstein raised their rating from Market Perform to Outperform and raised their target price from $57.00 to $70.00. Pre-market: 58.08 +0.59 (1.03%)

Downgrades

T. Rowe Price (TROW): Stifel Nicolaus lowered their rating from Buy to Hold.

Costco (COST): Susquehanna lowered their rating from Neutral to Negative and placed a target price of $65.00 on the company. Pre-market: 84.66 -1.10 (-1.28%)

Coverage Initiated

Ciena Corp (CIEN): Northland Securities initiated coverage with a Market Perform rating and target price of $12.50. Pre-market: 12.31 +0.28 (2.33%)

Sears Holdings (SHLD): Imperial Capital initiated coverage with a Underperform rating and target price of $6.00. Pre-market: 54.80 -3.54 (-6.07%)

Yahoo! (YHOO): BMO Capital initiated coverage with a Market Perform rating and target price of $17.00. Pre-market: 15.70 +0.09 (0.58%)

Earning Reports

Smith & Wesson (SWHC): Reported EPS of $0.01 beating estimates by +$0.05. Pre-market: 3.41 +0.08 (2.40%)

Pall (PLL): Reported EPS of $0.74 beating estimates by +$0.09.

Esterline Techs (ESL): Reported EPS of $1.21 beating estimates by +$0.03. Pre-market: 51.60 +0.52 (1.02%)

Markets: 
Futures at 8:19: Dow +0.89%. S&P +0.67%. Nasdaq +0.65%. Crude +0.11% to $98.44. Gold +0.25% to $1718.80. 

Europe: London +0.19%. Paris +1.19%. Frankfurt +0.74%. 

Asia: Japan -1.48% to 8536. Hong Kong -2.73% to 18586. China -0.62% to 2315. India -1.67% to 16213. 

MORNING COFFEE

ECB to Cut Rates. The next few days will be a few crucial days for the EU, with leaders meeting in an attempt to come up with a plan to keep the eurozone debt crisis from spreading. Today the Wall Street expects the ECB to cut interest rates to a record low of 1% from 1.25% and unveil a new package of bank aid. The European Banking Authority is also expected to say how much banks will need to raise to absorb losses from eurozone bonds.  Additionally, eurozone chief Jean-Claude Juncker in an announcement said the euro "is in no way at risk." Despite this reports say some European central banks are preparing for a partial, or complete, eurozone breakdown. Ireland, is said to be considering whether it needs to increase the number of printing presses in case it must print new notes.  The Swiss are also considering alternate currencies to use as a franc reference point.

Downgrades

THQ (THQI): Brean Murray lowered their rating from Buy to Hold. Pre-market: 1.20 -0.26 (-17.81%)

THQ (THQI): Pacific Crest lowered their rating from Outperform to Sector Perform. Pre-market: 1.20 

-0.26 (-17.81%)

Las Vegas Sands (LVS): Janney Capital lowered their rating from Buy to Neutral and lowered their target price from $57.00 to $48.00. Pre-market: 45.00 -0.62 (-1.36%)

Valero Energy (VLO): RBC Capital lowered their rating from Top Pick to Outperform and lowered their target price from $33.00 to $32.00. Pre-market: 22.10 +0.04 (0.18%)

Coverage Initiated

Tranocean (RIG): Goldman Sachs initiated coverage with a Sell rating and target price of $48.00. Pre-market: 45.37 -0.02 (-0.04%)

Diamond Offshore Drilling (DO): Goldman Sachs initiated coverage with a Sell rating and target price of $70.00.

Halliburton (HAL): Goldman Sachs initiated coverage with a Conviction Buy rating and target price of $55.00. Pre-market: 34.35 +0.95 (2.84%)

Coverage Reiterated/Price Target Changed

CVS Caremark (CVS): Mizuhoreite rated their Buy rating and raised their target price from $$41.00 to $42.00.

Earning Reports

Pacific Sunwear (PSUN): Reported EPS of -$0.10 beating estimates by +$0.05. Pre-market: 1.70 +0.35 (25.93%)

Ciena (CIEN): Reported EPS of -$0.03 missing estimates by -$0.10. Pre-market: 12.30 +0.39 (3.27%)

Costco (COST): Reported EPS of $0.73 missing estimates by -$0.07. Pre-market: 85.81 -1.66 (-1.90%)

Smithfield Foods (SFD): Reported EPS of $0.76 beating estimates by +$0.06.

Markets: 
Futures at 8:21: Dow -0.02%. S&P -0.19%. Nasdaq +0.04%. Crude +0.43% to $100.92. Gold +0.12% to $1746.90. 

Europe: London +0.91%. Paris +0.48%. Frankfurt +0.99%. 

Asia: Japan -0.66% to 8665. Hong Kong -0.69% to 19108. China -0.12% to 2330. India -2.30% at 16488.