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THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

Comments from CEO Keith McCullough

Plenty going on out there in the world – we just need to keep refining a repeatable risk mgt process to absorb it:

  1. KOREA – I learn a lot more about a bear market on the bounces than you do on the down moves – the KOSPI’s -3.4% drop on the “news” was met w/ a +0.91% bounce overnight (you’d need a +3.7% move to get back to breakeven); much like the rest of Asia which was weak again (India down another -1.3%, crashing to -26% YTD), South Korean Industrial and Tech demand continues to slow
  2. FTSE – Steiner highlighted this in our morning meeting yesterday and it appears that the market continues to care about it this morning – capital charges on British banks – gives the FTSE and Swiss Market Index negative divergences vs the region this morn despite the Swedes cutting rates by 25bps to 1.75% (Sweden gets the + divergence for the morning, up +0.8%)
  3. OIL – Bearish is as bearish does; provided that the USD holds my most immediate-term TRADE line of $79.68 support, I see Brent Oil making lower-highs on bounces within a newly established Bearish Formation (TAIL resistance = $110.12/barrel). This read through is wrecking Russia; down another -1% this morning, sending the RTSI to -36.2% since the Bernanke USD debauchery low (April 2011)

1207 holding in the SP500 is critical. We’ll see what the bulls have left to keep it treading water – inflows are dead.

KM

SUBSECTOR PERFORMANCE

THE HBM: CMG, GMCR, SBUX, WEN, DRI - subsector fbr

 

QUICK SERVICE

CMG: Chipotle Mexican Grill was initiated Outperform at Bernstein with a RT of $141.

GMCR: FY13 estimates for Green Mountain were cut by Piper Jaffray, reducing y/y K-Cup sales growth estimate to 30% from 45%.  FY13 EPS now $3.64 from $3.87.  Consensus is $3.62.  PT cut to $52 from $117 versus consensus $89. Rating remains Overweight.

SBUX: Starbucks FY12 estimates raised “after recent checks” on SBUX single-serve during holiday season.  FY12 EPS estimate raised to $1.82 from $1.75 versus consensus $1.82.  Starbucks rating remains Overweight, PT $55 versus consensus $49.

WEN:  The newest Wendy’s prototype features in an article on NRN.com today.

CASUAL DINING

DRI: Darden was reiterated “Overweight” at Barclays.

 

THE HBM: CMG, GMCR, SBUX, WEN, DRI - stocks 1220

Howard Penney

Managing Director

Rory Green

Analyst