- The same conditions that pushed hotel demand much higher than the national average (see 2nd chart) are now moving against the lodging environment in NYC. The dollar recorded the highest monthly gain in 15 years in August and global GDP growth is slowing rapidly. Since 1/1/07, the dollar index fell 15% to the end of July 2008 while international visitation to NYC grew over 20% against the backdrop of strong global economies. Meanwhile, the spread of NYC RevPAR growth vs the national average remained significantly positive throughout the period in the range of +5-9%. I believe the recent sharp reversal of the dollar and slowing global economies will narrow that gap considerably, and quickly. Considering the recent national RevPAR trends, this is not good for the NYC hotel market. August RevPAR probably fell 1% nationally.
- In my 6/26/08 post, “NOT BEARISH ENOUGH? NOT EVEN BEARISH”, I estimated that 2009 lodging company EPS estimates were too high on average by 30%. At the time, the consensus HOT estimate was $2.92. Two months later, the consensus estimate has fallen 25% to $2.19. Unfortunately, the data has deteriorated further and forward looking indicators are worsening. I now think 2009 EPS estimates need to be reduced by another 25% and EBITDA by about $150 million. We’ll probably have to wait for the next “beat and lower” quarter come October to actually see the reductions.
Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?
This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”read more
7 Tweets Summing Up What You Need to Know About Today's GDP Report
"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.read more
GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist
“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.read more
Inside the Atlanta Fed's Flawed GDP Tracker
"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.read more
People's Bank of China Spins China’s Bad-Loan Data
PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.read more
UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'
“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."read more
Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)
"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.read more
An Update on Defense Spending by Lt. Gen Emo Gardner
"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.read more