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THE HBM: PNRA, YUM, KNAPP, TXRH

THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

 

Comments from CEO Keith McCullough

Paying closer attention to better than expected Global Growth in 2012 is paying off here as European crisis-mongering = rear-view:

  1. TREASURIES – the most important line left in my interconnected Global Macro model = the intermediate-term TREND line of 2.02% for 10yr US Treasury yields. The market closed right at that level on Friday and is holding it again this morning as Treasuries have their worst January start since 2003 (not a Bullish on Growth period you wanted to be short in EM or US Equities).
  2. SPREADS – whether it’s the critical ones to counterparty risk (Euribor/OIS or TED) or the Yield Spread in Treasuries, the message is the same = bullish on the margin. And it’s what happens on the margin that matters to me most. Euribor/OIS down to 82bps wide this morn = 2.5 mth low. Yield Spread (10s minus 2s) +179bps wide; 3 month high (bullish for the Financials).
  3. GOLD – wandering on up into no man’s land here (my intermediate-term TREND resistance = $1684). I have no short position, but I likely will again soon. All of the aforementioned will be very bearish for Gold (Growth + Rising 10yr rates). I need to get the Heli-Ben’s FOMC mtg out of the way Wednesday though…

SP500’s refreshed immediate-term range = 1. I still have a bullish bias on Global Equities (buy red on a correction toward 1297).

SUBSECTOR PERFORMANCE

THE HBM: PNRA, YUM, KNAPP, TXRH - subsector fbr

 

QUICK SERVICE

PNRA: Panera Bread was downgraded to Market Perform from Outperform by Raymond James.

YUM: Yum Brands’ Taco Bell is rolling several new menu items including “First Meal” breakfast lineup as well as tests of healthier items to compete with more upscale competitors.

 

 

CASUAL DINING

KNAPP: The Knapp Track Casual Dining Index for December came in at +2.9%.  This was the best reading from Knapp this year, and for several years, but the weather impact on last year’s December number means that the “real trend” is lower than where the reading came in for December 2011.

TXRH: Texas Roadhouse was downgraded from Outperform to Sector Perform at RBC.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

RT: Ruby Tuesday is up 8.2% over the last week.

THE HBM: PNRA, YUM, KNAPP, TXRH - stocks

Howard Penney

Managing Director

Rory Green

Analyst