THE HEDGEYE BREAKFAST MONITOR
MACRO NOTES
CPI
The Consumer Price Index for November came in at +3.4% y/y versus expectations of +3.5%. CPI Ex Food & Energy came in at +0.2% versus expectations of +0.1%. We will have a post up this morning with more pertinent takeaways.
Comments from CEO Keith McCullough
Buy low, sell high – I really think that idea could be back in 2012.
- GOLD – Most Read on Bloomberg this morning is “Gold Market Rout Leaves Traders Least Bullish in 4 months” – gee, thanks. This is a great contrarian signal when combined w/ my long-term TAIL of support for Gold holding at $1568 (bought it there on 12/14). We’re not free and clear in this position obviously for a while; but getting above $1596 would help – that’s an impt level of immediate-term resistance
- INDIA – good news in Asia overnight was that China stopped going down for a day (+2%); bad news is that the Shanghai Comp remains in crash mode and the Sensex in India continues to crash (down another -2.2% overnight, taking YTD crash to -24.5%); Brent Oil at $115/barrel in November did not help India
- GERMANY – Commerzbank and Deutsche Bank solvency problems finally becoming understood; this should help the Street recognize why the Germans will take care of the German banks before they do French ones. As we’ve outlined in our European bank slide presentation for the last 6 months, the list of insolvent European banks is long and the mechanism to bail the list out is not in place. New DAX range = 5 (bearish)
SP500 holding 1206 is constructive. Strong Dollar = Strong American Consumption and Employment.
KM
SUBSECTOR PERFORMANCE
QUICK SERVICE
DPZ: The Al Jammaz family, owners of Domino’s Pizza operator, Alamar Foods, which operates Wendy’s and Domino’s Pizza restaurants in the Middle East, sold a 42% stake in Alamar to The Carlyle Group.
CASUAL DINING
BWLD: Buffalo Wild Wings was raised to “Buy” at Miller Tabak & Co. The twelve month price target is $78. We have not seen the report but have strong conviction that this stock will underperform over the next couple of quarters. We believe there is downside to $45.
DRI: Darden Restaurants reported 2QFY12 EPS of $0.41, as previously announced on December 6th.
MRT: Morton’s Restaurant Group is being bought by Tilman Fertitta, owner of Landry’s Restaurants Inc. in a deal that values the steak-house company at $117 million or $6.90 per share.
Howard Penney
Managing Director
Rory Green
Analyst