UPGRADES
- Rackspace (RAX) upgraded to Outperform from Market Perform at Wells Fargo – Target $46
- Adobe Systems Inc. (ADBE) upgraded to Buy from Hold at Jeffries – Target $57
- Pandora Media Inc. (P) upgraded to Outperform from Neutral at Cowen
- Mellanox technologies Ltd. (MLNX) upgraded to Buy from Hold at Stifel – Target $63
DOWNGRADES
- Southwest Airlines Co. (LUV) downgraded to Underweight from Equal Weight at Morgan Stanley – Target $13
- Axial Corp. (AXLL) downgraded to Neutral from Buy at SunTrust – Target $44
- Netgear (NTGR) downgraded to Sell from Neutral at Goldman Sachs – Target $28
NEW COVERAGE
- Praxair (PX) initiated with a Buy at SunTrust – Target $128
- Google (GOOG) initiated with a buy at Janney Capital – Target $1050
- Air Products (APD) initiated with a Buy at SunTrust – Target $103
HEADLINES
Chinese markets remained calm today, after the People’s Bank of China issued a statement that it will continue providing liquidity to Chinese banks and that it will inject cash after accessing “the market’s actual situation.” PBOC also suggested that it will continue tightening, stating that they will stay on course with their “prudent monetary policy”. Statements issued by the PBOC continue to reflect an attempt by the bank to ease the country’s credit crunch. Shares fell 0.4% on the day
Drug companies Roche (RHHBF.PF) and AstraZeneca (AZN) have announced that they are the latest pharmaceutical companies to join resources to improve their individual research and development sectors. The pair has agreed to share data on early stage drug designs through a third party firm called MedChemica.
Gold has fallen 4.2% to $1,224.18 an ounce, the lowest it has been since August 24 of 2010 as the improving U.S. economic data boosts the dollar and strengthens the case for the Fed to reduce stimulus. Gold dropped 23% this quarter, and around 25% this year heading for its biggest loss since 1920. This year, around $60 billion was wiped from the value of precious metals exchange-traded product holdings as investors lost faith in them as a store of value and speculation grew that the Fed will cut back on debt-buying. Silver also has been hit hard, with prices down by as much as 56.1% at 18.45 an ounce, also the lowest it has been since August of 2010, and was last at $18.59.
Decreasing bond prices and higher yields are continuing to threaten the recovery in the balance sheets of worldwide banks. These global banks continue to have massive portfolios of liquid securities. An example, American bank, Bank of America (BAC) maintains a $315B portfolio, of which 90% is made up of mortgage bonds and Treasurys. Top Analysts believe that the QE tapering should increase interest margins, which will offset the hit to book values in result of rising bond yields.
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