THE HBM: SBUX, CMG, YUM, JACK, MSSR

THE HEDGEYE BREAKFAST MONITOR

 

MACRO

 

Comments from CEO Keith McCullough

 

Squeeze me, please me – its 2012, here we go!

  1. SQUEEZE – in both Asian and European Equity squeezage (yesterday + today) there actually was some economic data supporting it; China (which I bought on last day of 2011) printed a 50.3 on its PMI for DEC and Germany’s unemployment rate dropped in DEC to 6.8% vs 6.9% last month, with both economies proving you don’t need Keynesian fear-mongering to generate a solid employment base.
  2. EUR/USD – get the US Dollar’s daily direction right and you’ll get most things beta right; that’s not a perpetual correlation, but it certainly still matters this morning. Euro’s new TRADE range = 1.28-1.31, so we’re dead cat bouncing this thing right back up to the top end of the range and Gold (which has a stunning -0.91% inverse cor to USD right now) pops for a +1.5% gain (covered our GLD short at $1538/oz)
  3. COMMODITIES – as important to watch as European equities as they test their TAIL lines of resistance in early 2012 will be Copper and Oil testing their TAIL lines of resistance of $111.61 (brent) and $3.99/lb, respectively.

 

Don’t be stuck bullish or bearish in 2012. Be right.

 

Game on.

 

KM

 

 

SUBSECTOR PERFORMANCE

 

THE HBM: SBUX, CMG, YUM, JACK, MSSR - subsector fbr

 

 

QUICK SERVICE

 

SBUX: Starbucks is raising prices by an average of roughly 1% in the U.S. Northeast and Sunbelt regions today.  Major cities being affected include New York, Boston, Washington DC, Atlanta, Dallas and Albuquerque. Spokesman Jim Olson said that the hike is coming as a result of “balancing the cost of doing business with competitive dynamics in the markets”.  Starbucks expects high prices for coffee, milk and fuel to cut into profits this year. 

 

CMG: Chipotle Mexican Grill was raised to “Buy” at Deutsche Bank.  The twelve month price target is $390 per share.

 

YUM: The Malay Chamber of Commerce Malaysia said it is prepared to outbid CVC Capital Partners Ltd. for control of the nations KFC franchise operator as it seeks to keep the business in local hands.

 

JACK: Jack In The Box was raised to Top Pick versus Outperform at RBC.

 

 

CASUAL DINING

 

MSSR: Landry’s announced today the successful completion of its tender offer for all of the outstanding shares of common stock of McCormick & Schmick’s Seafood Restaurants at a price of $8.75 per share.  Landry’s now owns, together with its affiliates, roughly 88% of the outstanding shares of MSSR.

 

THE HBM: SBUX, CMG, YUM, JACK, MSSR - stocks

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


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