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THE HEDGEYE BREAKFAST MONITOR

PORTFOLIO POSITIONS

LONGS: PFCB, EAT, JACK, SBUX

SHORTS: DNKN, MCD

 

MACRO NOTES

Commentary from CEO Keith McCullough

Growth Slowing, globally, will be a lot easier for consensus to see once this market opens:

  1. CHINA – Dollar Debauchery (Bernanke on Jan 25th, pushing easy money to 2014) fired up commodity inflation sequentially in FEB/MAR, and accelerating inflation then slowed real growth, globally. Same model we have been using for 5yrs – China’s inflation data for MAR rises to 3.6% vs 3.4% FEB.
  2. BOND YIELDS – as far as 1-day moves go, Friday’s reaction in the 10yr was violent; now you have 10yr Treasuries yielding 2.06% (down 35bps in a month!) and the Yield Spread just compressed -14bps in 1-day, wow – just like that growth slowing gets marked to market before everyone thought they could get out.
  3. SP500 – my math says the SP500 closes higher than where the futures are trading, but it also says that a close below 1391 would be bearish if sustained – so wait/watch that line throughout the wk as the inflation data domestically gets reported wed-fri (it will rise again sequentially) and earnings season, which will be one of the slowest growth ones in years, is upon us.

KM

SUBSECTOR PERFORMANCE

THE HBM: PNRA, WEN, YUM, RT, RRGB - subsector

QUICK SERVICE

PNRA: Panera Bread was rated “New Outperform” at Credit Suisse.

WEN: According to an SEC filing filed Friday, Emil Brolick’s total comp for 2011 was $4.6mm after taking the CEO position at Wendy’s in September.

YUM: Yum Brands CEO David Novak earned $20.4mm in 2011 versus $14.6mm in 2010.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

SBUX: Starbucks gained 2.1% on accelerating volume on Thursday.

CASUAL DINING

RT: Raymond James is standing by Ruby Tuesday, according to the WSJ.  The stock sold off on Thursday on weaker-than-expected comps and guidance provided last Wednesday after the close.

RRGB: Red Robin Gourmet Burger has commissioned a study that has revealed that “pink slime” related concerns are impacting Americans’ behavior.  The company has never served beef containing the ingredient, according to a press release.

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

RT: Ruby Tuesday declined 18% on accelerating volume

THE HBM: PNRA, WEN, YUM, RT, RRGB - stocks

Howard Penney

Managing Director

Rory Green

Analyst