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    MARKET EDGES

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

THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

 

Comments from CEO Keith McCullough

Adam Smith said defense is superior to opulence – the NY Football Giants agree:

  1. CHINA – interesting, but not surprising, to see Chinese stocks fail at intermediate-term TREND resistance of 2342 on the Shanghai Comp last night; this week we’ll get inflation data out of China (wed) and there’s a good chance its inflationary (sequentially) vs what we’d been calling Deflating The Inflation (DEC).
  2. FRANCE – keep an eye on the CAC because it just failed at its long-term TAIL line 3503 resistance this morning. Unlike Germany’s DAX (up +14% YTD and comfortably above long-term TAIL support of 6501), the CAC, MIB, and IBEX indices remain bearish TAILS. If they all continue to fail here and the Greek thing isn’t “news” anymore, what happens next?
  3. GOLD – down another -1.2% this morning after getting beat up a bit on Friday. Should remind people that what goes straight up will eventually come down, but Gold is a buy on red provided that UST Yields remain in a Bearish Formation (10s = 1.91% this morn, continuing to signal that US Growth Slowing in FEB vs JAN is the call to make). Gold’s immediate-term TRADE support = $1685. I’ll buy that and UST bonds on weakness.

 1 is my refreshed risk mgt range for the SP500, which continues to make lower long-term highs (vs 1363 APR 2011).

 

SUBSECTOR PERFORMANCE

THE HBM:  DNKN, DPZ, BWLD, CHUX - subsector fbr


QUICK SERVICE

DNKN: Dunkin’ Donuts has introduced four new bakery sandwiches.  The four options are ham and cheese, turkey, cheddar and bacon, chicken salad, and tuna salad.

DPZ: Domino’s CEO Patrick Doyle appeared on CNBC on Friday and said that commodity costs are easing off.

 

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

PEET: Peet’s Coffee & Tea bounced on an upgrade.

CASUAL DINING

BWLD: Buffalo Wild Wings was cut to “Hold” from “Buy” at Miller Tabak & Co.

BWLD: Buffalo Wild Wings was cut to “Sell” from “Hold” at Feltl & Co.

CHUX: O’Charley’s is to be purchased by Fidelity National Financial (FNF) for $9.85 per share.

CHUX: O’Charley’s reports 4Q11 EPS of -$0.38 versus consensus of -$0.22.  O’Charley’s company-operated comparable sales came in at -1.5%.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

KONA:  Continues to trade down on accelerating volume.

THE HBM:  DNKN, DPZ, BWLD, CHUX - stocks

Howard Penney

Managing Director

Rory Green

Analyst