I wrote the Early Look on Thursday titled "Beta Shift - Down" The note was to think about the next 3-month move for the market and not reacting to what is being said today. The next 3-month move favors the SAFETY TRADE. On Tuesday and Thursday this week, there was a BIG positive divergence in the "safety trade" just as the Research Edge quantitative models flashed that every sector in the S&P 500 was positive from a TRADE and TREND perspective.
The two early-cycle sectors that led the way from the March 9th lows, Technology and Consumer Discretionary, have been lagging as of late. Restaurants are likely to underperform, as the market shifts to the ‘SAFETY TRADE."
In this environment the FULL SERVICE could suffer more than QUICK SERVICE.
CAKE, EAT, DIN and DRI look vulnerable.
