THE HBM: CMG, WEN, EAT, CAKE, BWLD

THE HEDGEYE BREAKFAST MONITOR

 

HEDGEYE VIRTUAL PORTFOLIO POSITIONS

 

LONGS: JACK, SBUX

 

SHORTS:

 

MACRO NOTES

 

Commentary from CEO Keith McCullough

 

Most Read (Bloomberg) story this morning is “Bundesbank’s Weidmann Says What No Politician Wants To Hear” –

evidently we have company on the Strong Currency front – big issue for the US General Election:

  1. JAPAN – sadly, the Japanese have entered the final stage of the Currency War where both currency and equity markets start going down at the same time (think Europe from April 2011 to the 2011 crash bottom). The Yen’s decline was 1st, and now the Nikkei has been down for 13 of the last 15 trading days – BOJ bureaucrats begging for bond buying bailouts.
  2. GERMANY – the DAX snapped my intermediate-term TREND line of 6688 support yesterday, so I’m watching that market very closely on this morning’s no-volume bounce to 6568 so far. German growth data started to slow in Feb/Mar and that matters. So does the German voice of “Strong Euro” overriding Bernanke’s politicized one on the US Dollar.
  3. OIL – they will not come down like other commodities have until Bernanke says something explicit about no Qe4; our model’s show you’d need to see a sustained breakdown on Brent and WTIC below $96/barrel to stabilize Consumption Growth. We’re nowhere near seeing that yet, but Energy stocks seem to be sniffing that out.

Immediate-term SP500 range = 1.

 

SUBSECTOR PERFORMANCE

 

THE HBM: CMG, WEN, EAT, CAKE, BWLD - subsector

 

 

QUICK SERVICE

 

CMG: Chipotle was downgraded to Neutral at Credit Suisse.

 

WEN: Wendy’s has launched new “signature” sides for $2.49.  The Mac & Cheese, Baked Sweet Potatoes, and Chili Cheese Fries were reviewed on grubgrade.

 

 

CASUAL DINING

 

EAT: Brinker’s strong quarter yesterday led to several names trading strongly intraday.  Our thought is that this was primarily a short covering-fueled move; Brinker and Cheesecake Factory led the group yesterday and are two of the most heavily shorted names in casual dining. Buffalo Wild Wings did not move higher on the news.

 

EAT: Brinker was raised to Positive versus Negative at Susquehanna.

 

EAT: Brinker was raised to Neutral at Stern Agee

 

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

 

EAT: Brinker was the clear standout yesterday, gaining 10.7% on accelerating volume. 

 

CAKE: Cheesecake Factory gained 2% on accelerating volume.

 

BJRI: BJ’s Restaurants continues to trade poorly, declining just over a point on strong volume.

 

BWLD: Buffalo Wild Wings reports after the market close today.

 

THE HBM: CMG, WEN, EAT, CAKE, BWLD - stocks

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


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This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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In the past six months, U.S. stock indices are up between +12% and +18%.

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“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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