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THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

According to the National Bureau of Statistics, the annual inflation rate in China decelerated to 5.5% in October from 6.1% in September. 

Hedgeye Financials posted this on today's MBA Mortgage Purchase Applications print - "The MBA Purchase Index rose 4.8% last week, bringing the series to an index level of 173. In spite of this improvement, purchase application levels remain roughly 5% below their rates from the summer. At the current rate, applications will finish the year roughly 10% lower than 2010. We reiterate that this has a direct read through to prices."

SUBSECTOR PERFORMANCE

THE HBM: CBOU, CAKE - subsector fbr

QUICK SERVICE

CBOU: Caribou Coffee reported 3Q EPS after the close yesterday of $0.07 versus expectations of $0.06.  Comps increased 4.1% and FY11 and FY12 guidance of $0.39-$0.41 and $0.48-$0.51, respectively.  Consensus is at the high end of both ranges.

CASUAL DINING

CAKE: Cheesecake Factory says it’s doing nearly anything it can to lower costs without cutting portions during a time of high commodity-price inflation.  “We have to balance the need to protect margins with the even greater desire to grow guest counts”, said CFO Douglas Benn.  WSJ

THE HBM: CBOU, CAKE - stocks 119

Howard Penney

Managing Director

Rory Green

Analyst