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THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

Notes below from CEO Keith McCullough

Get the US Dollar right, you’ll get most other things right. That’s been our call since May.

  1. SINGAPORE – these guys are now being as explicit as we have seen them since 2008 about Global Growth Slowing (the Monetary Authority of Singapore: “The world economy and financial system are at their most fragile state since the 2008-2009 global financial crisis”); both HK and India continued to crash overnight (down -25.3% and -22.2% respectively from YTD tops)
  2. SPAIN – center right government = austerity = European Stagflation; if Singapore thinks they only to +1-3% GDP growth in 2012, the Europeans could be down -2-4% GDP in no time. European stocks getting rocked and now all major European tapes back in Bearish Formations (bearish across all 3 of my risk management durations); Greece -60% since FEB
  3. SANTA – really red for November to date equity returns and I’ll look forward to hearing what the Tom Lee camp thinks about that into month end. The bull markets I see are in the US Dollar (UUP), Long-term Treasuries (TLT), and Growth Slowing (FLAT)

The only line of big support left for the SP500 = 1203. A close below that puts the YTD low back in play.

 

SUBSECTOR PERFORMANCE

THE HBM: MCD, PNRA, JACK, PFCB - subsector fbr

QUICK SERVICE

MCD: McDonald’s and Target have dropped egg supplier Sparboe Farms due to an undercover video by the animal rights group Mercy for Animals which, according to media reports, showed “mindless animal cruelty”. 

PNRA: Panera Bread has entered into an MOU on proposed settlement of class action law suit.  $5M has been set aside

for payment of claims and, according to the company, this figure was not included in the 4Q guidance.

JACK: Jack in the Box raised to “Buy” at DA Davidson.

 

CASUAL DINING

PFCB: At its analyst meeting in Arizona on Friday, P.F. Chang’s said that the company is expecting 4-6% inflation in 2012.  According to the CEO, Richard Federico, 2012 revenue is a “wild card”.

THE HBM: MCD, PNRA, JACK, PFCB - stocks 1121

Howard Penney

Managing Director

Rory Green

Analyst