• It's Coming...

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

Comments from CEO Keith McCullough

Europe failed to deliver on a consensus failure to understand what they could deliver. Back to reality.

  1. INDIA – all the Growth Slowing on the East side of the world continues - China (down another -1% to a new low last night, down -18.4% YTD) and India put up their worst Industrial Production print in 28 months last night (down -5.1% y/y) = Sensex dropped another -2.2% (crashing, down -23% YTD)
  2. EURO – get the USD right, you’ll get the big beta moves generally right and that’s what’s shaking out there this morning w/ the EUR/USD testing 1.32 again. All European stock markets making consecutive lower-highs and now testing immediate-term TRADE lines of support (the only lines left) of 5845, 3071, and 15102 on the DAX, CAC, and MIB, respectively.
  3. COPPER – the Doctor is ill this morning, trading down -2.7% moving back into a Bearish Formation as Gold fails at $1743 TREND resistance ($1683/oz last) and Brent Oil’s TAIL remains broken ($110.11/barrel) – all this started breaking down again on Thursday morning after the ECB press conf call where it was clear that there would be no ECB backstop (bond buying).

Interconnectedness should insulate the risk management of ranges. We like US Consumption stocks (Healthcare and Consumer Discretionary) as the USD strengthens and Deflating The Inflation becomes more and more obvious.

KM

SUBSECTOR PERFORMANCE

<chart2>

 

QUICK SERVICE

YUM: Pizza Hut acquired almost 50 of its Southwest Ohio locations from a local franchisee.  Details of the transaction have not been disclosed. 

MCD:  McDonald’s was reiterated “Buy” at UBS and the PT was raised to $106 from $98.

 

THE HBM: YUM, MCD - stocks 1212

Howard Penney

Managing Director

Rory Green

Analyst