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    MARKET EDGES

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THE HEDGEYE BREAKFAST MONITOR

MACRO NOTES

Comments from CEO Keith McCullough

Consensus continues to clamor for Greek headlines – meanwhile the rest of the world’s globally interconnected risk continues to manifest:

  1. JAPAN – top 3 economy in the world drops to a -2.3% y/y GDP print in Q411 (brutal); now its full throttle game on for the Japanese as we head toward a massive sov debt maturity in March ($745B!). When we were getting hawked up about Italian debt in Feb of 2011, consensus didn’t have it in the area code of its map either. Stay tuned…
  2. FRANCE – alongside covering our SPY short, we covered our French Equity short position on Friday as well. Typically, short-and-hold isn’t what I do. That said, I’m watching the long-term TAIL line of resistance for the CAC of 3556 very closely as I think that’s going to be a good proxy for non-German European growth/inflation for the next few quarters.
  3. OIL – hooo-wah! Big breakout for Brent Oil to $118.28/barrel this morning w/ no immediate-term TRADE resistance to $120ish. If you’re looking for the #1 factor that will slow global consumption growth sequentially here in February (vs what was a big growth ramp in DEC/JAN), the black stuff in the barrel is it.

Immediate-term TRADE range for SP500 is now 1338 (where I covered Friday) to 1360. Keep moving out there.

KM

 

SUBSECTOR PERFORMANCE

THE HBM: SBUX, CBOU, WEN, COSI, DNKN, CAKE, RUTH, BWLD, PFCB, KONA - subsector

 

QUICK SERVICE

SBUX: A Starbucks in Athens burned last night as rioters set fire to buildings during unrest following the Greek parliament’s passing of another austerity bill.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

CBOU, WEN and COSI all led the QSR space on accelerating volume

DNKN declined on accelerating volume Friday.

 

CASUAL DINING

CAKE: Cheesecake Factory is to change its menus at its seven Massachusetts locations to include prices by March 16th, according to the Boston Herald.  A Massachusetts based attorney, Ross Mitchell, threatened to sue the chain for deceptive business practices after receiving a check that exceeded expectations.

CAKE: In more bad news for Cheesecake Factory, one of its restaurants in Boise is at the center of a possible Hepatitis A scare, according to local media.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

RUTH: Gained 2.7% on accelerating volume following earnings.

BWLD: Continues higher, up 1.3% on accelerating volume.

PFCB: Down -1.2% on accelerating volume.

KONA: Declined -3.7% on accelerating volume.

THE HBM: SBUX, CBOU, WEN, COSI, DNKN, CAKE, RUTH, BWLD, PFCB, KONA - stocks

Howard Penney

Managing Director

Rory Green

Analyst