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THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

 

Comments from CEO Keith McCullough

Top 3 Most Read so far this morn on Bloomberg = Greece – means it probably doesn’t matter like it did 106% higher (FEB 2011):

  1. ASIA – follow the bouncing macro ball – China fails at TREND line resistance yesterday (down 1.7% overnight); Singapore’s PM warns of a Chinese “rough landing” ahead of this week’s China data; and Glenn Stevens at the RBA refused to cut Aussie int rates last night = inflation expectations in Asia rising like the chart of Brent Oil.
  2. OIL – so the price of Brent Oil is at $115.95 this morning = up +6% since the #SOTU and #BernankTax on the wk of Jan 23rd; since we know that inflation slows real-consumption growth, I think being long energy (XLE) and anything inflation really (as opposed to being long Consumer Discretionary (XLY) like we were before Jan 26th) is the right sector shift.
  3. USD – attempted to have an up day yesterday, then got pounded into the close; the US Dollar Index really needs to hold its intermediate-term TREND line of 78.69 support or Gold, Oil, etc can go a lot higher.

If I only had 1 live quote to make a call on the slope of Global Consumption growth, it would be Oil. Deep simplicity.

KM

 

SUBSECTOR PERFORMANCE

THE HBM: YUM, SBUX, WEN, DRI - subsector

 

QUICK SERVICE

YUM: Yum Brands reported 4Q11 EPS of $0.75 versus $0.74 consensus.  Comps in the U.S. were the big 4Q surprise, coming in at +1% versus -2.5% expectations.  China comps came in at 21% for the quarter versus 17% consensus.  See our note published last night for more details.  The earnings call is at 9:15 a.m.

YUM: KFC has opened a store in Ramallah, in the Palestinian territories.  A Pizza Hut is set to open next door.

SBUX: Starbucks is, from today, offering Starbucks Blonde Roast as a brewed option in stores across Canada.

WEN: Wendy’s shareholder Trian Fund has increased its stake to 27% from 23%.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

COSI: This stock has been a rocket lately, up 13% on heavy volume yesterday.


CASUAL DINING

DRI: Darden CEO Clarence Otis has received a letter from Color of Change, an activist organization, complaining about apparent racism in hiring and promotion practices.  Capital Grille was singled out as rarely hiring African-Americans for high-paying jobs.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

CHUX: Shares were acquired by Fidelity National Financial

THE HBM: YUM, SBUX, WEN, DRI - stocks

Howard Penney

Managing Director

Rory Green

Analyst