Initial jobless claims came in at 367k versus 371k consensus and 379k (revised from 377k) the week prior.


THE HBM: CMG ,GMCR, YUM, DNKN - initial claims 22



Comments from CEO Keith McCullough


Almost all of the sequential Growth Slowing signals that matter in my model are flashing amber lights now:

  1. CHINA – all of the high-frequency economic data (inflation accel, growth decel) looks primed to slow in FEB as both the Shanghai Comp (+2% last night) and the Hang Seng (+12.5% YTD!) move to immediate-term TRADE overbought signals. Plenty of Johnny come lately pundits, who I didn’t hear a peep from when we bought China in DEC, going bullish.
  2. COPPER – the Doctor finally breaking its most immediate-term price momentum level of support of $3.83/lb this morn at the same time that Singaporean Stocks back off and moved red into the close. Stealth signals, but they’re leading ones that matter in my model. Copper’s long-term TAIL of 3.98/lb resistance intact – lower-highs.
  3. TREASURIES – if you only bet w/ the bond market for the last year on its implied growth slowing/accelerating signals, you’d have not been sucked into any of the lower-highs in US Equities (Feb 2011, Apr 2011, Jan 2012). I bought the long-bond back yesterday as the 10yr yield looks like it wants to make lower-lows for the YTD.


I was very bullish until policy infected the growth/inflation signals in my model. I’m data dependent – and the data is now going the wrong way. Jobless claims and the employment report up next.





THE HBM: CMG ,GMCR, YUM, DNKN - subsector





CMG: Chipotle Mexican Grill reported $0.81 EPS for 4Q11 versus $1.83 consensus.  Comps were up +11.1% and January comps were up roughly 10.1%.  The company plans to take price in the Pacific region which should help comps by 1%.


CMG: Chipotle Mexican Grill was reiterated Conviction Buy at Goldman Sachs.  The price target was raised from $410 to $425.


CMG: The price target for Chipotle was raised from $370 to $450 at Credit Suisse.


GMCR: Green Mountain is up ~20% premarket after reporting 1QFY12 EPS of $0.60 versus $0.36 consensus.  FY12 revenue (Sept) was reiterated at +60-65% y/y or $4.24-4.37b versus consensus $4.24b.  K-Cup Packs revenue was $715.7M versus $332.9M year-over-year.


YUM: Yum Brands’ Taco Bell is being linked to a salmonella outbreak in Oklahoma, according to media reports.


DNKN: Dunkin’ Donuts is adjusting its menu in an effort to make its growth into new markets more successful than previous efforts, according to media reports.  See the article here.





COSI: Cosi traded up 14% on accelerating volume as news emerged that Carin Stutz filed a Form 4 on January 31st, buying another 65k shares.







CHUX, RRGB, BOBE, EAT, TXRH, BWLD: All traded higher on accelerating volume.


KONA: Traded down -8% on accelerating volume.





Howard Penney

Managing Director


Rory Green



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