• It's Coming...

    MARKET EDGES

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

THE HEDGEYE BREAKFAST MONITOR


We are hosting a call detailing our short thesis on Buffalo Wild Wings on January 19th at 11am.  Stay tuned for details.  

MACRO NOTES

Initial Claims

Initial jobless claims came in at 372k versus 375k consensus and 387k (revised) the week prior.

THE HBM: MCD, SONC, DNKN - claim

Comments from CEO Keith McCullough

Fascinating to watch the Correlation Risk in Global Macro markets start to burn off as consensus keeps focusing on stale indicators:

  1. ASIA – Growth Slowing at a slower rates as a Deflating The Inflation is starting to slow the pace of declines on Asian Equity market down days; India’s Services PMI 54.2 for DEC (vs 53.2 NOV) was a positive surprise and Thailand reporting lower sequential inflation for DEC at 3.5% vs 4.2% in NOV was more of what we are seeing across Asia.
  2. DAX – can I get a live quote/recap of a European Bond Auction? Cmon. That mattered 12 months ago when few were focused on it – now, every time European equities have a downtick my tweet-stream lights up w/ the same known knowns. What isn’t obvious yet is how strong German stocks and bonds act on these down moves. DAX holding 5 range of support is bullish. Period.
  3. EUR/USD – is the Euro getting blasted to a 15 month low because of Unicredit or b/c a Romney win in NH is a big time stabilizer for the USD? Or both? Markets don’t move on a 1-factor model – I think this Presidential debate is going to be USD bullish inasmuch as insolvent European banks blowing up is bearish.

EUR/USD immediate-term TRADE oversold at $1.28 so make some gross/net exposure moves on that. Buying more US Equity exposure provided that my TAIL line of 1267 holds. Waiting and watching first.

KM

SUBSECTOR PERFORMANCE

THE HBM: MCD, SONC, DNKN - subsector fbr

 

QUICK SERVICE

MCD: McDonald’s Japan same-store sales gained 5% in December and 1% in 2011. 

MCD: McDonald’s Hong Kong raising average prices 2.3% this month.

SONC: Sonic reported Q1FY12 EPS of $0.09 versus consensus $0.09.  Comps at franchise restaurants came in at +0.2% versus consensus +0.3% and company-owned restaurants’ comps came in at -0.1% versus consensus of +0.8%.

THE HBM: MCD, SONC, DNKN - sonc company pod1

THE HBM: MCD, SONC, DNKN - sonc franchised pod 1

DNKN: Dunkin’ Donuts is going to double its store base in 20 years, according to the NY Post.  Where is the backlog?

THE HBM: MCD, SONC, DNKN - stocks

Howard Penney

Managing Director

Rory Green

Analyst