THE HEDGEYE BREAKFAST MONITOR
HEDGEYE VIRTUAL PORTFOLIO POSITIONS
LONGS: EAT, JACK, SBUX
SHORTS: BWLD, DNKN, MCD
Jobless Claims – Bad News for Casual Dining
Initial jobless claims came in at 380k versus 355k consensus for the week ended April 7. The prior week’s tally came in at a revised 367k versus 357k prior. Our view on casual dining is getting incrementally more bearish and we will be posting further thoughts on this soon.
Commentary from CEO Keith McCullough
Japan is slowly, but surely, winding its way up the Keynesian pole to Most Read news (Bloomberg) next to Fed begging:
- JAPAN – the BOJ’s Shirakawa said exactly what we have been saying he’s ultimately going to have to say “The BOJ WILL PURSUE POWERFUL EASING” – that’s the go to Bernanke move (Policy to Inflate), and it stopped Japanese Equities from going down for the 1st day in 9 (+0.7%); Yen down on that obviously, but can go down a lot more
- EUROPE – certified train wreck in motion in Spain and Italy again with both stock markets following their respective bond markets (lower); Italian bond auction yielding 3.89% (vs 2.76% last) on 2015 notes – and get this, the Japanese say, hey, we have our own issues, we aren’t buying pig paper.
- US DOLLAR – sheepishly, the Fed’s Janet Yellen gave a speech in NYC last night that said what she always says – she’s all for devaluing the US Dollar until she’s told to retire. USD not moving much anymore on these comments; maybe because it hasn’t worked; maybe because political change is coming – we will see. Currency War is on.
SP500 needs to close > 1391 for any no volume rally to matter. 1 up day in the last 6 doesn’t a bull market make.
BK: Burger King got a write-up today in the WSJ, in an article focusing on the franchising trend in QSR. John Gordon, a restaurant analyst, said that the problem with Burger King is that “the unit economics are so bad” … “because of bad store management over the past 40 or 50 years, you got all these beat up stores”.
NOTABLE PERFORMANCE ON ACCELERATING VOLUME:
SBUX: Starbucks gained 4.4% on accelerating volume.
MCD: McDonald’s underperformed after trading well, on a relative basis, over the two prior days’ down tapes.
BWLD: Buffalo Wild Wing’s will print comps in line with consensus, if Wingstop’s 1Q results are anything to go by (and the chart below suggests they are). Consensus Metrix is indicating that consensus company-owned same-store sales for BWLD is 10.74%.
BJRI: BJ’s rated new “Overweight” at Barclays Capital. The PT is $57 per share.
BNHNA: Benihana comps increased 6% in 1Q. Increased traffic was credited with lifting the top line.