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MAR: TRADE UPDATE

Keith bought MAR in the Hedgeye Virtual Portfolio.

 

 

Keith bought MAR in the Hedgeye Virtual Portfolio at $28.33.  According to his model, MAR currently has TRADE support at $27.52 and TREND resistance at $32.03.  

 

We like the lodging sector because, unlike regional gaming revenues and cruise yields, RevPAR growth is and should continue to accelerate.  Our call has been that the real comps (dollar RevPAR) were difficult over the summer and they ease beginning in September.  So far the weekly numbers are backing up our assertion.  Given its business model MAR should be the safest lodger should the economy double dip.  MAR's risk/reward looks good especially considering it is the only hotel company trading at its March of 2009 trough valuation.   

 

MAR: TRADE UPDATE - MAR


KNAPP: SLOWDOWN IN AUGUST

Malcolm Knapp released the estimates for August 2011 casual dining comparable restaurant sales and guest counts this morning.

 

Knapp Track casual dining same store sales increased a meager 0.1% in August.  On a weather-adjusted basis, comparable sales gained 0.7%, implying a 60 basis point impact from the effects of the hurricane during the last week of the month.  Comparable guest counts for August declined -1.5% after three months of traffic gains.

 

In a break from tradition, the full text report was preceded by a short email with the August estimates. We will publish the usual monthly post, with more specifics, when we receive the full Knapp Track report later on.  These initial numbers are significant, though, because they indicate significant sequential declines in two-year trends for both comparable sales and guest counts.  Even if one includes the weather adjustment, comparable sales came in light in August.

 

TXRH and BWLD are two casual dining names we like on the short side.

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst


MACAU STEADY

No change to September forecast of HK$20-22BN, up 35-48% YoY

 

 

Last week’s performance was similar to that of the week before with average daily table revenue increasing from HK$675MM to HK$690MM. Our September GGR forecast remains at $HK20-22BN, up 35-48% YoY.  Market share has normalized a bit but MPEL is still way above at 17.9% MTD and up from its post GM share of 15.1%.  Wynn also picked up a few points in a likely low hold month for them but share remains way below recent trends.

 

MACAU STEADY - macau1


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.33%
  • SHORT SIGNALS 78.51%

Higher-Lows: SP500 Levels, Refreshed

POSITION: Long Utilities (XLU)

 

It’s sad but it’s true. Provided that the SP500’s immediate-term TRADE line of 1180 holds, I need to cover some high quality short positions ahead of the next Keynesian policy idea. Gaming policy is the game. I will continue to play the game that’s in front of me.

 

Today I covered our short position in Industrials (XLI) so that makes me only long from a Sector Risk perspective. Across all 3 of our core risk management durations (TRADE, TREND, and TAIL), these are the lines that matter most to me now: 

  1. Long-term TAIL resistance = 1266
  2. Immediate-term TRADE resistance = 1225
  3. Immediate-term TRADE support = 1180 

Higher-lows on the immediate-term TRADE duration are bullish. Lower-highs on the long-term TAIL are bearish. I don’t need to reconcile why (Growth Slowing isn’t a new thesis) inasmuch as I need to maintain these two competing thoughts in my melon and remain actively selling high and buying low.

 

KM

 

Keith R. McCullough
Chief Executive Officer

 

Higher-Lows: SP500 Levels, Refreshed - SPX


THE HBM: WEN, SBUX, YUM, KONA, BWLD, CHUX

THE HEDGEYE BREAKFAST MENU

 

Notable macro data points, news items, and price action pertaining to the restaurant space.

 

MACRO

 

Consumer

 

University of Michigan Confidence came in at 57.8 for September versus expectations of 57.

 

Commodities

 

National restaurant chain companies have ethanol tax subsidies in their crosshairs as they push lawmakers to end the Volumetric Ethanol Excise Tax Credit as a means to help reduce the country’s debt, according to thehill.com.

 

Subsectors

 

Food processor stocks have been performing strongly over the last two weeks, outperforming peer subsectors on a one-day, one-week, and two-week duration.  Food retail stocks underperformed .

 

THE HBM:  WEN, SBUX, YUM, KONA, BWLD, CHUX - subsectors fbr

 

 

QUICK SERVICE

 

WEN CEO Brolick appeared on CNBC this morning, showcasing the new burger and discussing the company’s prospects.  He underscored growth outside North America as a goal for the company.  Brolick sees same-store sales up 1-3% this

year.

 

SBUX CEO Howard Schultz, speaking in Madrid, said that Brazil is a “big opportunity” for the company and also sees more stores in Western Europe over the long-term.

 

YUM is the best company to work for in China, according to Fortune magazine. 

 

 

CASUAL DINING

 

KONA, BWLD, and CHUX gained on accelerating volume Friday.

 

THE HBM:  WEN, SBUX, YUM, KONA, BWLD, CHUX - stocks 919

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - September 19, 2011

 

As we look at today’s set up for the S&P 500, the range is 41 points or -2.71% downside to 1183 and 0.66% upside to 1224.

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - levels 919

 

THE HEDGEYE DAILY OUTLOOK - daily sector view

 

THE HEDGEYE DAILY OUTLOOK - global performance

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: +53 (+1586) 
  • VOLUME: NYSE 1813.53 (+88%)
  • VIX:  30.98 -3.1% YTD PERFORMANCE: +74.54%
  • SPX PUT/CALL RATIO: 1.87 from 1.28 (+46.1%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 35.13
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 2.08 from 2.08     
  • YIELD CURVE: 1.90 from 1.88

 

MACRO DATA POINTS (Bloomberg Estimates):

  • IMF/World Bank annual meetings this week
  • FOMC begins two-day meeting tomorrow
  • 10 a.m.: NAHB Housing Market, est. 15, prior 15
  • 11:30 a.m.: U.S. to sell $29b 3-mo., $27b 6-mo. bills

 

 WHAT TO WATCH:

  • EU, IMF inspectors to hold call today with Greek Finance Minister to judge whether Greece is eligible for next aid payment due next month
  • Greek PM George Papandreou canceled U.S. visit that was to begin today
  • AT&T said to approach smaller rivals including MetroPCS, Leap Wireless to sell spectrum, subscribers in bid to save $39b takeover of T-Mobile USA
  • Conagra has said it will withdraw Ralcorp takeover offer unless talks start by today; Ralcorp said not willing to begin them
  • President Obama said to call for $1.5t in tax increases mostly targeting the wealthy over the next decade as part of a plan to cut the U.S federal deficit by $3t
  • GM, UAW reach tentative agreement on 4-yr contract, including $5k bonus for workers; Ford, Chrysler next
  • UTX said to be exploring possible bid for Goodrich
  • Boeing postponed next week’s inaugural delivery of the 747-8 freighter after Cargolux Airlines declined to accept the planes
  • Facebook said to unveil a media platform that will allow people to easily share their favorite music, television shows and movies, NYT says
  • EIA releasing world energy supply and demand projection through 2035
  • Netflix plans to separate its DVD-by-mail service from movie streaming, rename it Quikster
  • UBS said Oswald Gruebel will remain as CEO, boosted estimate of trading loss to $2.3b
  • Siemens drops plan to cooperate with Russia’s Rosatom in field of reactors
  • "Lion King 3D’’ tops N. Amer. box office; “Modern Family” wins 5 Emmys
  • Google Wallet may be introduced today, TechCrunch says 
  • No IPOs expected to price today


COMMODITY/GROWTH EXPECTATION

 

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

 

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • Copper Falls to Nine-Month Low in London on Europe Debts, China
  • Hedge Fund Boxer Hall Says Gold to Extend Gains: Commodities
  • Crude Drops to One-Week Low on Signals Oil-Demand Growth Slowing
  • Commodities Fall as Copper Touches Nine-Month Low; Gold Gains
  • Wheat Drops to Lowest Price Since July as Rain Falls in Texas
  • Gold May Gain in New York as European Debt Concerns Boost Demand
  • Freeport Indonesia Resumes Mining as Grasberg Workers Return
  • Hedge Funds Raise Oil Wagers Most Since March: Energy Markets
  • LNG Surges as Japan Vies With China, Exxon’s Shipments Grow
  • Zinc May Fall After Failing to Top Average: Technical Analysis
  • Funds Cut Bullish Commodity Wagers on ‘Contraction’ Concern
  • Wheat Exports From India May Be Capped 500,000 Tons, Group Says
  • Corn, Soybeans May Fall on Higher U.S. Yields, Economic Woes
  • Teck’s Lindsay Favors Coal Mine Expansion as Industry M&A Booms
  • Coffee Falls as European Stockpiles Are High; White Sugar Slides
  • Shipper Navios Outperforms Parent on Soy Trade: Argentina Credit
  • World Corn Growers Top U.S. Farms on Exports: Chart of the Day

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - daily currency view

 

 

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - euro performance

 

 

ASIAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - asia performance

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - mideast performacne

 

 

Howard Penney

Managing Director

 

 


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