“Look forward all the time.”
That’s what T.E. Lawrence, aka Lawrence of Arabia, wrote home to his Mom at Christmas time in 1915. He’d just lost two of his British born brothers to WWI within the span of 5 months. He was only 27 years old.
On the road, on your own, no one teaches you to look forward in life. You have to learn that lesson yourself. Been there, done that. I left home when I was 16 years old. And for me at least, looking forward has always been born out of adversity, failure, and loss. That’s my only way out.
Context at life’s crossroads is critical. Lawrence needed to become the change he wanted to see in his world. “In the 11 months since he had arrived in Cairo, he had largely been confined to a suite of offices in the Savoy Hotel, a world away from the Western Front…” (Lawrence in Arabia, pg 149). Few in Middle Eastern history decided to look forward like he did in 1916. That’s why he’s remembered.
Back to the Global Macro Grind…
When you don’t believe in the central-planning command of an economy, it’s really hard to look forward. In fact, I’ve had to fight off my personal confirmation bias that Bernanke is going to wreck whatever is left of our said “free-market” for the better part of a year now – not buying Gold or Bonds on any of these “pullbacks” has been a personal victory. I was tempted.
That’s why I’m using the T.E. Lawrence analogy. He didn’t believe in “mother” (British Military Command) any more than I believe in the US Federal Reserve. I certainly don’t think I’m going to save the world taking on these received wisdoms, but I don’t think my son or daughter will read about me standing down to un-elected and unaccountable tyranny either.
Scott Anderson starts off Chapter 7 of Lawrence in Arabia with a now infamous British Military quote from the Director of Military Intelligence in 1916:
“It seems to me that we are rather in the position of the hunters who divided up the skin of the bear before they had killed it. I personally cannot foresee the situation in which we may find ourselves at the end of the war, and I therefore think that any discussion at the present time of how we are going to cut up the Turkish Empire is chiefly of academic interest.”
-General George McDonough
In other words, the tyranny of government is in the certainty it assigns to the outcomes of its policies. Allowing government to A) trash your savings accounts and B) burn your currency pays the wealthy and punishes the poor.
Ben Bernanke has no business promising the “folks” in America’s heartland that 0% rates of return on their hard earned savings accounts will result in economic prosperity. He should be held in contempt for fear-mongering Americans out of tapering too.
So what will today’s employment report bring?
With Bernanke bought and paid for by the bond bull lobby, does it matter? I have no idea what this guy is going to unilaterally decided in spite of the data. That’s because he’s politicized; not data dependent.
With that accepted, all I can do today is look forward. I can only react to Mr. Market’s read-through on what today’s employment data means. In order to do that, I’ll be focused mostly on the following 3 things:
- US DOLLAR – will it hold its long-term TAIL line of $79.21 support on the US Dollar Index (DXY)
- US BONDS – will the 10yr US Treasury Yield’s intermediate-term TREND line of 2.57% hold?
- GOLD/OIL – will the Bernanke Burning Buck trades of the century continue to come unglued?
Other than in Bernanke’s ideological world, the first 2 things are trivial pro-growth signals. As economic growth stabilizes then accelerates (provided that an un-elected central planner doesn’t try to arrest them) the currency and sovereign yields of a country rise. When gravity isn’t banned, this is called an economic cycle.
The 3rd thing is less obvious. That’s because a lot of people in high places get paid by Gold and Oil inflation via a US Policy to Devalue its currency. So how are those Bernanke Gold and Oil bubbles doing this morning?
- GOLD – down again to $1312 and still crashing for both the YTD and from the all-time USD low (-22% and -30%, respectively)
- OIL – after snapping our long-term TAIL risk line of $101.37 this past wk, WTIC is still crashing (-30% since 2008)
I know, I know. Bernanke said his whispering to #OldWall in the summer of 2008 that he was going to “cut to zero” had nothing to do with that all-time high in oil that’s priced in the Dollars.
I know, I know. After multiple whisperings of multiple QEs in 2011 where the US Dollar was pulverized to an all-time low, Gold hitting it’s all time high must have been pure irony.
Then came the all-time high in food prices (2012), and the rest is history. According to Bernanke self-serving fictional account, there was “no inflation” at the all-time high in global inflation (in Dollars) in 2011-2012, so now we’ll have Dollar based deflation in commodities and debt, and he’ll have nailed it, right?
Not so fast. Even though deflation in commodity prices pays the consumer via a real-inflation-adjusted tax cut at the grocery store and at the pump. And even though #RatesRising gives frugal bastards like me who have a starved savings account some risk-free fixed income too – Bernanke says no.
No, no, no “folks” – not now. But Ben, if you won’t taper and give us our currency back now, will you ever? Or, from here, is this no longer within your control? Interestingly, but maybe not surprisingly, Mr. Market is already tapering that answer for the perma bulls in Gold, Oil, and Bonds in real-time. Markets look forward; central planners don’t.
Our immediate-term Risk Ranges (all 12 are in our Daily Trading Range product) are now as follows:
UST 10yr Yield 2.57-2.69%
WTIC Oil 98.12-101.37
Best of luck out there today,
Keith R. McCullough
Chief Executive Officer
TODAY’S S&P 500 SET-UP – October 22, 2013
As we look at today's setup for the S&P 500, the range is 52 points or 1.87% downside to 1712 and 1.11% upside to 1764.
CREDIT/ECONOMIC MARKET LOOK:
- YIELD CURVE: 2.29 from 2.29
- VIX closed at 13.16 1 day percent change of 0.92%
MACRO DATA POINTS (Bloomberg Estimates):
- 7:45am: ICSC weekly sales
- 8:30am: Nonfarm Payrolls, Sept., est. 180k (prior 169k)
- 8:30am: Unemployment Rate, Sept., est. 7.3% (prior 7.3%)
- 8:55am: Johnson/Redbook weekly sales
- 10am: Richmond Fed Manuf. Index, Oct., est. 0 (prior 0)
- 10:30am: EIA weekly natgas storage 10:30am (orig. Oct. 17)
- 11am: Fed to buy $1.25b-$1.75b notes in 2036-2043 sector
- 11:30am: U.S. to sell 4W bills
- 4:30pm: API weekly oil inventories
- Senate out of session, House in session
- Labor, Commerce Depts. begin to issue economic indicators delayed by 16-day federal govt shutdown
- Supreme Court hears oral arguments in suit challenging certificates of conformity that allow diesel engines produced by Navistar to exceed EPA emissions standards
- SEC Chairman Mary Jo White delivers opening remarks at National Society of Compliance Professionals membership meeting, 8:30am
WHAT TO WATCH:
- BofA said to face 3 more U.S. probes of mortgage-bond sales
- U.S. employers probably expanded payrolls at faster pace in Sept.
- Apple to debut new iPads
- Beechcraft said to attract possible bidders Embraer, Mahindra
- Texas Instruments forecasts profit that trails analyst ests.
- Netflix sign-ups beat ests. as U.S. total Hits 31.1m
- Nokia shows larger devices to help Microsoft’s wireless push
- Apple preparing 65-inch TV for release in 2014, analyst says
- RadioShack said to boost liquidity with $835m credit line
- Goldman Sachs said to seek up to $402m in LEG share sale
- U.S. shoppers in Deloitte survey to boost holiday spending 9.1%
- Jana Partners boosts QEP stake and seeks Midstream unit breakup
- Faith in U.S. ’badly shaken,’ Blackrock CEO Fink writes in FT
- AK Steel (AKS) 8:30am, $(0.25)
- Carlisle (CSL) 6am, $1.20
- Centene (CNC) 6am, $0.84
- CIT Group (CIT) 6am, $0.95
- Coach (COH) 7am, $0.76 - Preview
- Delta Air Lines (DAL) 7:30am, $1.35 - Preview
- DuPont (DD) 6am, $0.41 - Preview
- EMC (EMC) 6:47am, $0.45 - Preview
- Entegris (ENTG) 7am, $0.13
- FirstMerit (FMER) 7:30am, $0.34
- Forest Laboratories (FRX) 7am, $0.14 - Preview
- Freeport-McMoRan Copper & Gold (FCX) 8am, $0.63 - Preview
- Gentex (GNTX) 8am, $0.32
- Harley-Davidson (HOG) 7am, $0.72
- IDEXX Laboratories (IDXX) 7am, $0.83
- Ironwood Pharmaceuticals (IRWD) 7:05am, $(0.57)
- Kimberly-Clark (KMB) 7:15am, $1.40 - Preview
- Lexmark International (LXK) 7am, $0.91
- Liberty Property Trust (LRY) 8am, $0.61
- Lockheed Martin (LMT) 7:25am, $2.27 - Preview
- McGraw Hill Financial (MHFI) 7:10am, $0.77
- Nu Skin Enterprises (NUS) 6:35am, $1.42
- Pentair (PNR) 7am, $0.86
- Polaris Industries (PII) 6am, $1.61
- Regions Financial (RF) 7am, $0.21
- Reynolds American (RAI) 6:58am, $0.86 - Preview
- Ryder System (R) 7:55am, $1.45
- Sigma-Aldrich (SIAL) 7am, $0.99
- State Street (STT) 7:13am, $1.18
- Synovus Financial (SNV) 7am, $0.04
- Travelers (TRV) 6:57am,$2.09
- United Technologies (UTX) 6:58am, $1.54 - Preview
- Waters (WAT) 7am, $1.23
- Whirlpool (WHR) 6am, $2.63 – Preview
- ACE (ACE) 4:01pm, $2.25
- Altera (ALTR) 4:15pm, $0.34
- Amgen (AMGN) 4pm, $1.78 - Preview
- Apollo Group (APOL) 4pm, $0.25
- Broadcom (BRCM) 4:05pm, $0.68
- Canadian National Railway (CNR CN) 4:01pm, $1.62 - Preview
- Celestica (CLS CN) 4pm, $0.21
- CR Bard (BCR) 4:05pm, $1.40
- Cree (CREE) 4pm, $0.39
- Cubist Pharmaceuticals (CBST) 4pm, $0.33 - Preview
- FMC Technologies (FTI) 4pm, $0.59
- Fulton Financial (FULT) 4:30pm, $0.20
- Juniper Networks (JNPR) 4:05pm, $0.31 - Preview
- Nabors Industries (NBR) 4:02pm, $0.19
- Panera Bread (PNRA) 4pm, $1.35
- RF Micro Devices (RFMD) 4pm, $0.10
- Robert Half International (RHI) 4pm, $0.48
- Total System Services (TSS) 4pm, $0.46
- Trustmark (TRMK) 4:01pm, $0.47
- Unisys (UIS) 4:30pm, $0.94
- Waste Connections (WCN) 4:05pm, $0.50
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- WTI Oil Trades Below $100 a Second Day as U.S. Stockpiles Gain
- Overflowing Canada Grain Bins Compound Global Glut: Commodities
- Nickel Reaches 8-Week High as Export-Ban Prospect Spurs Buying
- Soybeans Fall on Prospects for Weather to Speed Up U.S. Harvest
- Raw Sugar Declines as Traders Assess Santos Fire; Cocoa Retreats
- Gold Swings as Investors Await U.S. Jobs Data to Gauge Stimulus
- Rebar Declines on Concern China Home Price Gains May Spur Curbs
- Palm Oil Imports by China Set to Slow as Soy Shipments Surge
- Iron Ore Backwardation Signals 22% Price Drop: Chart of the Day
- Copper Has Less Support From Speculators Than Three Months Ago
- Gazprom China Deal Revives as LNG Prices Soar: Energy Markets
- U.K. Nuclear Future Relies on Reactor Plagued by Delays: Energy
- StanChart Hires Liam Pepper From JPMorgan for Agriculture Sales
- WTI Crude Seen Extending Drop Below $100 as U.S. Supplies Surge
The Hedgeye Macro Team
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Takeaway: If the reaction to the employment report is bullish, 1764 is next; if its bearish, 1712 is next. So #GetActive.
This note was originally published October 21, 2013 at 10:46 in Macro
POSITION: 7 LONGS, 5 SHORTS @Hedgeye
All-time is a long time. And fighting a setup like this (higher-lows and higher-all-time-highs) is as tough as tough gets. Forget about Fed fighting – don’t fight Mr. Market.
Across our core risk management durations, here are the lines that matter to me most:
- Immediate-term TRADE overbought = 1764
- Immediate-term TRADE support = 1712
- Intermediate-term TREND support = 1671
In other words, the US stock market remains in what we call a Bullish Formation (bullish on all 3 of our core durations – TRADE, TREND, and TAIL). If the reaction to the employment report is bullish, 1764 is next; if its bearish, 1712 is next.
Keith R. McCullough
Chief Executive Officer
Takeaway: Economic reforms will become the primary focus of investors over the next 6-8W in Japan and over the next 6-8M in India.
- All told, it’s now or never for Japanese policymakers to meaningfully affect structural growth expectations.
- A failure to deliver policies that are both concrete and consequential is likely to result in broad-based foreign selling of Japanese equities and a grand, “I told you so” from the Japanese public to its politicians. On the flip side, Japan has an opportunity to knock the cover off of the ball by delivering just that.
- From today’s prices, we think it pays to bet on the latter outcome. With respect to the intermediate-term TREND duration, Japanese equities are likely to remain range-bound as fiscal and monetary policy disappointments continue to weigh on the USD vs. the JPY. With respect to the long-term TAIL duration, however, we think our base case for USD/JPY ~125 in 12-18 months remains firmly intact and, in conjunction with likely economic policy propulsion, that catalyst should propel the Japanese equity market much higher from here over a similar timeframe.
- All told, the potential for positive upside surprises with respect to Indian fiscal policy over the intermediate-term TREND and long-term TAIL is highly supportive of being long Indian equities from here – especially if the market can close above its previous all-time highs, which were recorded way back in 4Q10.
- Bet on the long side of India over the intermediate term? Certainly – especially with the USD in no-man’s land here (bearish TREND; bullish TAIL). A breakdown on the DXY below its long-term TAIL line of support of 79.21 in conjunction with a breakdown in US Treasury Bond Yields below TREND-line support of 2.58% on the 10Y would be a resounding thumbs up for speculating on the long side of EM assets across the asset allocation spectrum (CLICK HERE for our latest tactical and strategic asset allocation thoughts on emerging market assets). Remember, the Fed may be setting up to remain dovish for significantly longer than consensus among the international investment community currently anticipates. There is a probable chance that tapering is a DEC 2014 – i.e. not 2013 – phenomenon (CLICK HERE for a deeper discussion of that possibility).
- Lastly, without a clear co-directional trend in the USD and US interest rates (i.e. a continuation of the existing status quo), we think investors should play the long and short side of EM assets on idiosyncratic country fundamentals until further notice. That includes India and its simmering political landscape.
JAPAN: WILL THE THIRD ARROW FINALLY BE RELEASED FROM ITS QUIVER?
Tomorrow the Diet will begin an extraordinary session debate and ultimately pass laws pertaining to the highly-anticipated “Third Arrow” of Abenomics.
Prime Minster Shinzo Abe has gone as far to state on record that this is “a session for getting things done”. With an overwhelming majority in the Lower House (325 of 480 seats, factoring the NKP’s 31 seats) and a working majority in the Upper House (135 of 242 seats, factoring in the NKP’s 20 seats), the avenue for reform is wide open and only limited to the boldness and imagination of the powers that be atop the LDP.
During this parliamentary session, Japanese policymakers will be charged with finding ways to deregulate various industries, as well as implementing concrete steps designed to boost the “Four C’s” for Japanese corporations: [employee] compensation, capital expenditures, [international] competitiveness and [industry] consolidation.
In our OCT 2 note titled, “GET TIGHT AND TRADE THE RANGES IN JAPAN”, we detail exactly why the we think the first three of those “Four C’s” are the most meaningful areas for Japanese politicians to focus on with respect to ramping structural growth expectations among Japanese corporations and households, as well as in the eyes of domestic and foreign investors.
On the investment front, minuscule equity allocations among Japanese pension funds and households tell us that structural growth expectations inside Japan remain extremely subdued after 10-plus years of deflation:
- Even after its recent reallocation, GPIF – the nation’s largest pension fund with ¥121 trillion AUM – is targeting only 12% of its assets to be held in Japanese equities (vs. 60% for JGBs); and
- Japanese households hold only 8.1% of their financial assets in equities vs. 16% for the Eurozone and 32.1% for the US.
With the Nikkei still underwater relative to its MAY 22 YTD high, we feel comfortable in stating that foreign expectations for Japanese growth are also relatively muted – at least when compared to the hype surrounding the Abenomics agenda in 1H13:
Needless to say, the stage is now set for the LDP to deliver a pretty meaningful upside surprise with respect to economic reform(s) in Japan.
They had better deliver this time; increasingly tougher comps and reduced stimulus from decelerating appreciation momentum on the USD/JPY cross serve as headwinds to Japan’s TREND duration growth outlook. This morning’s reported slowdown in export growth in SEP (+11.5% YoY from +14.6%) highlights the latter point:
All told, it’s now or never for Japanese policymakers to meaningfully affect structural growth expectations.
A failure to deliver policies that are both concrete and consequential is likely to result in broad-based foreign selling of Japanese equities and a grand, “I told you so” from the Japanese public to its politicians. On the flip side, Japan has an opportunity to knock the cover off of the ball by delivering just that.
From today’s prices, we think it pays to bet on the latter outcome. With respect to the intermediate-term TREND duration, Japanese equities are likely to remain range-bound as fiscal and monetary policy disappointments continue to weigh on the USD vs. the JPY. With respect to the long-term TAIL duration, however, we think our base case for USD/JPY ~125 in 12-18 months remains firmly intact and, in conjunction with likely economic policy propulsion, that catalyst should propel the Japanese equity market much higher from here over a similar timeframe.
INDIA: WILL THE BJP's RECENT SURGE FORCE THE CONGRESS PARTY TO GO “ALL IN"... JUST TO EVENTUALLY LOSE THE POT ANYWAY?
Ahead of nationwide parliamentary elections that must be called by MAY, polls are leaning heavily towards to the Hindu-nationalist Bharatiya Janata Party (BJP) on confirmation that Gujarat Chief Minister Narendra Modi will be their front man for the premiership seat currently held by incumbent Prime Minister Manmohan Singh of the ruling Congress Party.
Specifically, results from the most recent poll (AUG 16 through OCT 15) out of polling agency C-Voter show that the BJP is projected to take 162 of 545 seats in the Lower House (Lok Sabha) vs. only 102 for the Congress Party in the upcoming nationwide parliamentary elections.
Factoring in allies, the tally bifurcation is a more striking 186 to 117 seats for the BJP’s National Democratic Alliance and Congress Party’s United Progressive Alliance, respectively. Those alliances currently hold 117 and 206 seats, respectively – effectively underscoring the magnitude of this potential political blow to the Congress Party.
One potential saving grace to the Congress Party is its recent decision to split off the Telangana region of Andhra Pradesh (population 85M) into its own state, potentially giving it access to a few additional parliamentary seats (in 2009, Congress won 33 of its 206 seats from Andhra Pradesh), as India’s Upper House (Rajya Sabha) politicians are elected by the various state legislatures. A recent spate of massive protests in coastal Andhra Pradesh suggests the move could ultimately backfire, however.
All told, we’ll be monitoring the results of the five state assembly elections between now and the end of the year – the last such spate of elections before next year’s main event – for incremental clues as to which party will take charge of India’s economic and fiscal policy platform with respect to the long-term TAIL. The BJP is expect to “win” the larger three of the five contests (Madhya Pradesh, Chhattisgarh and Rajasthan), while Congress has a decent chance in the smallest two contests (Delhi and Mizoram).
With Indian real GDP growth slowing to a decade-low of +5% in the most recent fiscal year and even further to +4.4% YoY in 2Q13 (-1.1x standard deviations below the trailing 3Y mean), our money is leaning heavily on a BJP/NDA rout in the upcoming nationwide elections. Headline inflation (WPI) has come down to an average of +6.1% YoY for 3Q13 (-1.1x standard deviations below the trailing 3Y mean), but has remained elevated for much of Congress Party’s rule (WPI has averaged +7.6% YoY since mid-2009) and is likely to accelerate from here absent dramatic tightening out of the RBI (more on that HERE). Recall that rampant, and perhaps more importantly, unchecked rates of inflation have sparked a number of political protests in India over the past ~3Y – including well-publicized hunger strikes back in 2011.
In short, our call for a BJP/NDA rout ultimately means investors will begin to increasingly vet Narendra Modi’s leadership skills and policy biases. It is our view that, at this point, anyone not named Manmohan Singh is a near-lock to drum up interest among the international investment community.
It’s worth noting that real GDP growth in Gujarat has dramatically outpaced the national average over the past 10Y (+10.2% vs. +7.9%), so it is likely that Modi will garner some clout among activist EM investors who are looking for a reason to help India unlock its admittedly robust economic growth potential. That being said, investors may also choose to focus on the fact that anti-Muslim riots that occurred under Modi’s watch in 2002 saw over 1,000 people killed and many others injured.
Indeed, Modi is surely a controversial figure, but his biggest saving grace might just be the fact that he’s not associated with incumbent Prime Minster Singh or his wildly ineffective Congress Party.
That’s not to say that the BJP will come to power next year and crush it economically by implementing a spate of pro-growth policies, but it’s certainly an increasingly-probable upside risk to monitor from here. At the bare minimum, we expect the ruling United Progressive Alliance to feel the polling heat and turn up the dial on their economic reform agenda to save face ahead of the aforementioned nationwide elections.
All told, the potential for positive upside surprises with respect to Indian fiscal policy over the intermediate-term TREND and long-term TAIL is highly supportive of being long Indian equities from here – especially if the market can close above its previous all-time highs, which were recorded way back in 4Q10.
Bet on the long side of India over the intermediate term? Certainly – especially with the USD in no-man’s land here (bearish TREND; bullish TAIL). A breakdown on the DXY below its long-term TAIL line of support of 79.21 in conjunction with a breakdown in US Treasury Bond Yields below TREND-line support of 2.58% on the 10Y would be a resounding thumbs up for speculating on the long side of EM assets across the asset allocation spectrum (CLICK HERE for our latest tactical and strategic asset allocation thoughts on emerging market assets).
Remember, the Fed may be setting up to remain dovish for significantly longer than consensus among the international investment community currently anticipates. There is a probable chance that tapering is a DEC 2014 – i.e. not 2013 – phenomenon (CLICK HERE for a deeper discussion of that possibility).
Lastly, without a clear co-directional trend in the USD and US interest rates (i.e. a continuation of the existing status quo), we think investors should play the long and short side of EM assets on idiosyncratic country fundamentals until further notice. That includes India and its simmering political landscape.
Takeaway: MCD remains on the Hedgeye Best Ideas list as a short.
This note was originally published October 02, 2013 at 12:35 in Restaurants
McDonald's remains on the Hedgeye Best Ideas list as a short.
To be clear, we believe MCD has a secular top line issue and not a cyclical one. That said, we don’t believe management is willing to acknowledge this. So far in 2013, the new product pipeline has failed to stimulate incremental customer traffic and new products, such as Mighty Wings, seem like a desperate attempt to hide from reality.
We posted a note a couple of weeks ago titled, “MCD: A Pending Mighty Disaster,” in which we stated that MCD’s decision to sell wings this fall could be disastrous for the company. Given current trends, we have no reason to back off this negative bias.
We have three main issues with the current MCD menu strategy:
- Mighty Wings will not enhance the McDonald’s brand (Premium Wraps have not helped either)!
- Both new products (Mighty Wings and Premium Wraps) have slow service times.
- Adding new products to an already complex menu is the wrong direction for the company to go.
We also have two main issues with the Mighty Wings promotion:
Mighty Wings Are Too Expensive
For the smallest portion, you are paying a dollar per mighty wing.
McDonald’s Mighty Wings are available in three portion sizes. There is a 3-piece for $2.99, a 5-piece for $4.79 and a 10-piece for $8.99. Across the pricing spectrum, this is equivalent to paying $0.99, $0.96, and $0.90 per wing, respectively.
Inconsistent Product From McDonald's
We are hearing that frequent visitors of McDonald’s are not used to the bone-in chicken wings product. While bone-in chicken wings are standard fast food options for restaurants that specialize in fried chicken – for example, KFC and Popeyes – it does not seem to fit well with the rest of McDonald’s products.
This whole situation is all too reminiscent of the period from 1998-2002, when we witnessed the sad decline of a mismanaged McDonald’s brand. During that time, the company was focused on unit growth and cost reduction rather than driving high margin, top line sales.
As the image of the brand began deteriorating, management failed to invest in the brand and customer experience. Rather, they turned to monthly promotional tactics in order to drive short-term sales at the expense of brand equity and margins. This strategy did not end well for either the company or investors and we’d be surprised if this time was any different.
We continue to believe there is a disconnect between investors’ expectations and the company’s fundamentals. As long as this remains the case, we are looking for more underperformance versus both peer consumer and S&P 500 benchmarks.
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