“In the end, if you build it, they may not come.”
Whether it’s the Japanese burning their currency, a demigod named Draghi “saving” Europe, or the Fed’s perpetual Policy To Inflate asset prices, I often wonder if Rickards is right – now that markets have built these expectations, will the growth come?
So far, the long-end of the bond market says no. On growth that is… but what are markets telling you about the centrally planned illusion of growth (i.e. inflation expectations)?
And “what happens when you manipulate markets using price signals that are the output of manipulated markets?” (The Death of Money, pg 86) Never forget that the biggest risks to markets are the critical answers to the toughest questions.
Back to the Global Macro Grind…
I spent all of yesterday seeing Institutional Investors in Greenwich, CT. The meetings, as always, were tremendous learning opportunities. And there was one moment in one of the meetings that I’ll never forget.
As I was sitting across from a Portfolio Manager, the Federal Reserve’s “Minutes” (from their last meeting) were released. So, I sat there and watched Liesman @CNBC spew his interpretation of what he thought the Fed said… and the seasoned PM just giggled.
Even at the most sophisticated funds, whether they like it or not, this is modern day “macro” – where you have to not only think about what you think… but seriously consider what everyone else was told they should think…
Here’s what I think was incremental in those Fed Minutes:
- Inflation expectations are falling
- The Fed only has one move to address that newfound concern
- In the next 3-6 months, as US inflation falls, the Fed will get more dovish, because of that
Since our “Bad #Deflation” view is not yet consensus, it’s really hard for consensus to get why this is bearish for bond yields (and bullish for the Long Bond, TLT, EDV, etc.). But markets almost always front-run consensus – and that’s already in motion.
After our interlude with the English-major turned pretend macro savant (who has never traded a market in his life), the Portfolio Manager asked me a very simple question that I get asked a lot: “what things should I look at to monitor your #deflation view?”
I answered by referring him to exhibit 15 (the slide in my #Quad4 Deflation Macro deck) that shows #InflationExpectations:
- TIPs (5 year Breakeven Rate)
- Fed 5Y-5Y Forward Breakeven Rate
Then I said:
- The price of Oil relative to my bearish TREND view
- CRB Commodities Index (TREND resistance = 281)
- Russell 2000 relative to my bearish TREND view
The price of Oil ($74.20/barrel) continues to crash this morning (-31% since June); the CRB Index is trading at 267 (-4.6% YTD); and after having another horrendous day (both absolute and relative to US Equities yesterday) the Russell 2000 is DOWN (again) for 2014 YTD.
Back to real economic growth expectations, I told investors yesterday what I’ve been telling them all year long – my catalyst is the cycle. As the growth cycle data slows, whatever these “bullish surveys” are telling you will look wrong.
That’s what’s happening from China to Europe this morning (they release Producer Manufacturing and Services data for November). Literally all of the growth data slowed.
While China’s PMI print of 50.0 wasn’t as bad as France’s (47.6 NOV vs. 48.8 OCT), that’s not saying much. Bond Yields are falling because the rate of change in global growth is slowing.
When both growth and inflation data slows, expectations for asset price inflation in those things slow. So BUY slow-growth-yield-chasing assets (TLT, EDV, MUB, XLV, XLP, XLU) and keep SELLING growth and/or inflation expectations (IWM, KRE, XOP, EWQ, VWO).
And that’s all I have to say about that.
Our immediate-term Global Macro Risk Ranges are now:
UST 10yr Yield 2.29-2.36%
France (CAC 40) 4139-4281
WTI Oil 73.01-76.13
Best of luck out there today,
Keith R. McCullough
Chief Executive Officer
TODAY’S S&P 500 SET-UP – November 20, 2014
As we look at today's setup for the S&P 500, the range is 50 points or 2.13% downside to 2005 and 0.31% upside to 2055.
CREDIT/ECONOMIC MARKET LOOK:
- YIELD CURVE: 1.81 from 1.84
- VIX closed at 13.96 1 day percent change of 0.72%
MACRO DATA POINTS (Bloomberg Estimates):
- 7:45am: Fed’s Tarullo speaks in New York
- 8:30am: Init Jobless Claims, Nov. 15, est. 284k (prior 290k)
- 8:30am: CPI m/m, Oct., est. -0.1% (prior 0.1%)
- 9:45am: Markit U.S. Mfg PMI, Nov. prelim 56.3 (prior 55.9)
- 9:45am: Bloomberg Consumer Comfort, Nov. 16 (prior 38.2)
- 10am: Freddie Mac mortgage rates
- 10am: Philadelphia Fed Outlook, Nov., est. 18.5 (prior 20.7)
- 10am: Existing Home Sales, Oct., est. 5.15m (prior 5.17m)
- 10am: Leading Index, Oct., est. 0.6% (prior 0.8%)
- 10:30am: EIA natural-gas storage change
- 1pm: U.S. to sell $13b 10Y TIPS
- 1:30pm: Fed’s Mester speaks in London
- 8:30pm: Fed’s Williams speaks in Seoul
- Sec. of State John Kerry leaves for Paris
- 8pm: Obama gives national address on plans for executive order to address immigration
- 8:30am: Sen. Rob Portman, R-Ohio, delivers breakfast keynote remarks at “Enhancing the Transatlantic Trade & Investment Partnership: Reducing Regulatory Barriers”
- 9:30am: Senate Permanent Sbcmte on Investigations hearings to examine extent to which banks, holding cos. own physical commodities incl. oil, natural gas, aluminum
- 9:30am: Sens. Edward Markey, D-Mass., Richard Blumenthal, D-Conn. hold news conf. on Senate Commerce Cmte hearing on airbag recalls
- 10am: Senate Commerce Cmte hearing on airbag defects, vehicle recall process
WHAT TO WATCH:
- Obama scheduled to give 8pm speech on immigration action
- Gunman Shot Dead on Florida University Campus After 3 Injured: AP
- Technip Seeks $1.8b Purchase of CGG; Approach Rejected
- Wall Street Banks Gained Unfair Advantage Owning Commodities
- Airbus Said to Near Win Over Boeing for Delta Air Wide-Body Jets
- Caesars Shares Jump on Debt Proposal to Convert Unit Into REIT
- GoDaddy Seeks Nearly $4.5b IPO Valuation, New York Post Reports
- RBS Fined $88m by U.K. Regulators for 2012 Technology Collapse
- German PMI Expands at Slowest Pace in 16 Months
- Chinese Factory Gauge Falls to 6-Month Low as Slowdown Deepens
- T-Mobile Could Attract Suitors Again, Deutsche Telekom Says
- Alibaba Said to Prepare Inaugural Bond Sale as Soon as Today
- Brookfield Property Drops Plan to Buy New Jersey’s Revel Casino
- Sony Pictures Said to Drop Plans to Produce Steve Jobs Film
- Donaldson (DCI) 6am, $0.42
- GasLog (GLOG) 6am, $0.22
- Spectrum Brands (SPB) 6:30am, $1.14
- Best Buy (BBY) 7am, $0.25 - Preview
- Buckle (BKE) 7am, $0.85
- Patterson (PDCO) 7am, $0.51
- Perry Ellis (PERY) 7:30am, $0.06
- Dollar Tree (DLTR) 7:30am, $0.64 - Preview
- Raven Industries (RAVN) 9am, $0.23
- Gap (GPS) 4pm, $0.73
- Ross Stores (ROST) 4pm, $0.87 - Preview
- Intuit (INTU) 4pm, ($0.20)
- GameStop (GME) 4:01pm, $0.61
- Autodesk (ADSK) 4:01pm, $0.22
- Aruba Networks (ARUN) 4:01pm, $0.25
- Splunk (SPLK) 4:02pm, $0.01
- Marvell Technology (MRVL) 4:05pm, $0.29
- Mentor Graphics (MENT) 4:15pm, $0.21
- Fresh Market (TFM) 4:20pm, $0.28
- Renren (RENN) 7pm, ($0.13)
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Banks Had Unfair Advantage From Commodity Units, Senator Says
- Top Rubber Growers Agree to Reduce Exports to Boost Global Price
- Aluminum Fee to Japan Seen Climbing to Record on Global Deficit
- Oil at $75 Means Patches of Texas Lose Money for Shale Drillers
- Goldman Lowers 2015 Nickel Estimate on China Pig Iron Output
- Goldman, Glencore Found in ‘Merry-Go-Round’ Aluminum Trades
- Soybeans Rebound From Two-Week Low on U.S. Feed Supply Outlook
- Pigs Are Too Fat for Holiday Hams as Prices Surge: Commodities
- Ebola Stokes Liberian Food Shortage as Hungry Farmers Eat Seeds
- Goldman Sachs to Wind Down Uranium Unit After Failing to Sell
- Gold Futures Fall a Second Day as Dollar Gains After Fed Minutes
- Codelco Sees Copper Price Outlook ’Quite Stable’: Chairman
- JPMorgan Power Market Influence Targeted in U.S. Senate Report
- Saudi Arabia Tenders for 330,000 Tons of Hard Wheat
- Goldman, Morgan Stanley Commodity Heyday Gone as Units Faulted
The Hedgeye Macro Team
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This note was originally published at 8am on November 06, 2014 for Hedgeye subscribers.
“Never believe anything, until it has officially been denied.”
For those of you who didn’t know that Cockburn was a British journalist and proponent of communism, now you know. His aforementioned quote was cited by Jim Rickards at the beginning of an excellent chapter titled “Prophesy” in The Death of Money.
BREAKING: “Bundesbank investigating whether it can block sovereign QE”
Pardon? I know. I know. What is up with the London Telegraph dropping that anti-money-printing (QE) bomb on my laptop while I was sitting pretty at the epicenter of inequality’s Social #Bubble (San Francisco) after the US stock market close last night?
Back to the Global Macro Grind…
Now I’m sure that Europe’s un-elected-central-planner-in-Chief (Draghi) will officially deny anything that remotely resembles that headline being true at today’s ECB (European Central Bank) meeting… but that’s the point.
What if the Germans have legal grounds to tell the Italian jobber to #PoundSand?
Pardon my hockey-talk, but believing anything that you hear about what the Japanese, European, and American central planning agencies can do to stock markets these days is a very dangerous premise.
What happens if:
- People (as in market expectations) don’t believe Policies To Inflate asset prices work anymore? (hint: #deflation)
- Or, maybe more importantly, that they aren’t allowed to legally execute on them anyway?
Bueller? Or is it “spoos and chartreuse” while Ed is saying that every time the “surveys” get growth wrong “QE will get the perma bulls paid” anyway?
Admittedly, as global growth slows (again), it’s getting harder and harder to keep track of what it is, precisely, that has consensus right bulled up about chasing the all-time #bubble high in the SP500.
As Rickards appropriately summarizes in the same chapter, “when it comes to betting on a sure thing, greed trumps common sense.” (The Death of Money, page 25).
In other news…
Utilities (XLU), +2.3% on the day to +22.3% YTD, led the US stock market’s no-volume charge to all-time highs yesterday. I know. Everyone nailed that and Energy (XLE) being -3.1% YTD too.
- Japan’s economic implosion finally ended the 3-day central planning rip, with the Nikkei closing -0.9%
- European Equities are doing nothing while they await the 2nd coming of the 3rd and 4th coming of Draghi
- US Equity futures are down, well, because maybe they won’t go up on the jobs report tomorrow
As for me… after spending most of the week in California, I am back in the saddle in Connecticut wondering what changed, fundamentally, since the Russell 2000 was -10% lower (120 points) less than a month ago…
Other than mostly every growth and inflation metric in our model being slower today than it was then, I guess the answer is that those who are permanently predisposed to be long of US stocks will believe almost anything, other than common sense.
Our immediate-term Global Macro Risk Ranges are now:
UST 10yr Yield 2.24-2.38%
WTI Oil 76.12-80.29
Natural Gas 3.88-4.27
Best of luck out there today,
Keith R. McCullough
Chief Executive Officer
Takeaway: We’ve been dead wrong on Japan over the past month or so. With the exception of one MAJOR caveat, consensus probably has this trade right.
Where We’ve Been
On October 31st, the day of the BoJ’s surprise easing, we wrote a note titled, “WEEKEND MUST-READ: DOES THE DEATH OF JAPAN = THE DEATH OF ACTIVE MANAGEMENT?”. The key investment takeaway from that note was as follows:
”We’re inclined to maintain our SHORT bias on the DXJ and our LONG bias on the FXY for now. We think recent moves are exaggerated in both directions in the context of a highly likely dearth of incremental Policies to Inflate over at least the next few months.
That being said, however, we are actively looking for a rise in cross-asset volatility as an opportunity to exit this position in the coming weeks. In short, we are now wrong on this trade and are seeking to minimize the damage by not covering high (DXJ) and selling low (FXY).”
It’s worth noting that the Japanese yen tends to be positively correlated with cross-asset volatility due to the country’s status as the world’s largest supplier of capital. Japan’s net international investment surplus of ~$3T is equivalent to 68% of the country’s GDP and compares to a -$5.5T deficit for the US.
With the obvious lack of cross-asset volatility since 10/31, we have been made incrementally wrong on this recommendation and are now content to just get the heck out of the way. For what it’s worth, the DXJ and FXY have moved -487bps and -787bps, respectively, against us since we introduced the thesis on September 22nd.
That was obviously the right call to have made by mid-October (e.g. the DXJ and FXY moved +1045bps and +253bps, respectively, in our favor from 9/22 to 10/15), but we have clearly overstayed our welcome on the short side of the “Abenomics Trade”.
Unlike our competitors – the vast majority of whom lack a buyside practitioner’s approach to global macro risk management – we actually get things wrong here at Hedgeye. With no banking, trading or asset management revenues to help “keep the lights on”, we don’t tend to stay wrong for long, however. Moreover, we’d like to think our customers appreciate our conviction on the LONG and SHORT side of global macro risk management.
The alternative would be opining with no view…
Where We’re Headed
In the next three sections, we attempt to coagulate all of the moving parts across Japan’s macro and political economy. Hopefully we’ll adequately distill that into an investment conclusion, but as the title of the note implies, we’ll let you be the judge of that!
The Snap Election: Tricky At Best
Today Prime Minster Shinzo Abe officially announced a November 21st dissolution of the Diet, effectively paving the way for snap elections on December 21st. To the extent that he secures a second mandate, it is likely that he attempts to push through a series of potentially unpopular reforms over the next four years, including but not limited to:
- Lowering corporate taxes from an effective rate of ~35% to the mid-20s
- A reduction in agriculture tariffs as part of entry into the U.S.-led Trans-Pacific Partnership
- Deregulating the health care industry
- Promoting women advancement in the workforce; Abe aims to have women account for 30% of management positions at Japanese companies by 2020, up from ~6% now
- A broad restoration of Japan’s nuclear power plants
- Potential constitutional reform to expand Japan’s military
Currently the LDP (Abe’s party) has 294 of 480 seats (61%) in the House of Representatives (i.e. lower house) and 114 of 242 seats (47%) in the House of Councilors (i.e. upper house). Together with partner NKP, Abe’s coalition has a 68% mandate in the lower house and a 55% mandate in the upper house.
Conclusion: there’s really nowhere to go but down from these levels. In fact, we consider it a highly risky proposition for Abe to pursue a snap election at the current juncture in light of recent Japanese economic data:
- Overall Household Spending (i.e. “Real PCE”) crashing, down -5.6% YoY
- Real Household Income crashing, down -6% YoY
- Consumer Confidence on the lows
- Small Business Confidence on the lows
- General economic confidence (per the widely-followed Economy Watcher’s Survey) on the lows
FYI, it’s worth mentioning that Japan entered its fourth recession in six years with the advent of the 3Q GDP release:
- 3Q Real GDP: -1.2% YoY from -0.2% in 2Q
- QoQ SAAR: -1.6% from -7.3%
- Real Private Demand: -2.3% YoY from -0.3%
- Household Consumption: -2.8% YoY from -2.7%
- Private Residential Investment: -12.3% YoY from -2%
- Private Nonresidential Investment: 2.8% YoY from 3.8%
- Real Public Demand: 0.8% YoY from 0.6%
- Government Final Consumption Expenditure: 0.3% YoY from flat
- Public Investment: 2.9% YoY from 5.2%
- 3Q Nominal GDP: 0.8% YoY from 1.9% in 2Q
- 3Q GDP Deflator: 2.1% YoY from 2% in 2Q
Further, the Japanese economy continues to contract here in 4Q:
To top it all off:
- The approval rating for Abe’s Cabinet has fallen to 48.1%, down -6.8ppts. from the previous poll conducted in early September;
- Abe’s economic policies were the top reason cited by respondents who did not support the Cabinet at 40.2%;
- 84.8% of all respondents said they did not feel the economy has recovered;
- 63.8% of the respondents expressed opposition to legalizing casinos, while only 30.3% expressed support;
- 60.2% oppose allowing the nation’s nuclear reactors to resume operation, while only 31.9% support their reactivation;
- 55.9% said measures to encourage the promotion of women at corporations are not effective, while a much smaller 40.8% said they are effective; and
- Per broadcaster NTV, approximately 2/3rds of voters are against an election next month.
Good luck next month, Mr. Abe; you’re going to need it!
In fact, the only saving grace we can find in support of a positive election surprise is the fact that:
- 65.9% of respondents were opposed to raising the consumption tax rate to 10% in October 2015 (recall that Abe has just announced delaying the planned +200bps hike by 18M to April 2017); and
- The NTV survey highlighted above found that support for Abe's LDP was at 40%, which compared to a lowly 10% approval rating for the main opposition DPJ party.
Abe has hinted at resigning if the election results point to an overwhelming majority of voters rise up against his Abenomics agenda. In that light, the “Abenomics Trade” will be facing a critical level of tail risk in the coming ~month.
Fiscal Policy: Getting Easier
With respect to Japanese fiscal policy, prepare the anchor for more stimulus. The government is currently considering a supplementary budget worth ¥2-3T full of measures aimed at “helping people cope with rising energy prices, local revitalization and reconstruction in disaster-hit areas”.
With unspent funds from FY13 and above-target fiscal revenues from FY14, the government should be able to secure about ~¥4T in funds for a supplementary budget. In terms of the anticipated economic impact, this figure compares to supplementary budgets of ¥10T and ¥5.5T in FY12 and FY13, respectively.
In the context of Abe delaying next fall’s consumption tax hike and pledging to proceed with the first iteration of cooperate tax cuts next year, Japanese fiscal policy will remain very favorable for equity investors over the next 12-18M.
On the flip side, much of the late-2013/early-2014 acceleration in real GDP growth was pull-forward ahead of April’s +300bps VAT hike. Without a similar need for consumers and businesses to accelerate expenditures, we anticipate Japan’s economic contraction will continue for at least the next two quarters as the country laps extremely difficult GDP compares.
In fact, the broad balance of Japan’s high-frequency economic data continues to lose sequential momentum on a trending basis. In the context of how we model Real GDP, this all but ensures a continued deceleration in the growth rate of the headline figure(s).
Monetary Policy: Getting Crazier
Japanese consumption be damned, we now know that the BoJ is completely comfortable with going “full Weimar [Republic]” with Japanese monetary policy, as most recently highlighted by today’s 8-1 vote in leaving monetary policy unchanged; recall that the board was split 5-4 when Governor Haruhiko Kuroda opted for additional easing last month.
What we found even more surprising is the fact that Kuroda reiterated his “upbeat” assessment of the economy. Yes, the same Japanese economy that is mired in recession and contracting -1.2% on a YoY basis!
What this tells us is that he is likely leaving room for a downside surprise to his targets, which would afford him scope to expand QQE sooner, rather than later. Per Bloomberg, sellside consensus expects a further expansion of QQE by June. Kuroda surprised us once; he won’t catch us off guard again!
Reasons for QQE expansion over the next 2-3M:
- The BoJ has to increasingly provide liquidity to the JGB market in the context of the GPIF portfolio reallocation and Japan’s deteriorating BoP dynamics (CLICK HERE for more details);
- The BoJ is seemingly hell-bent on perpetuating Japanese stock market inflation (there is speculation that the BoJ buys ETFs whenever the 1st section of the Tokyo Stock Exchange drops more than -1% in the morning session); and
- A potentially reflexive loop of decelerating inflation and a lower-highs in Japanese inflation expectations as JPY weakness perpetuates USD strength, which continues to be a material headwind for the prices of key commodities.
All told, the BoJ can and will “do more” to pursue the “5% Monetary Math” agenda as originally stated with the introduction of Abenomics.
It seems crazy to us allocating capital to the “Abenomics Trade” (i.e. LONG the DXJ and SHORT the FXY) at current price levels in Japan’s equity and currency markets, but perhaps that’s precisely the point: Japanese central planners are forcefully compelling us to join in on the craziness.
Investment Conclusions: Doing Nothing, For Now
If there’s anything investors should glean from the U.S. midterm elections is that the state of the economy matters big time at the ballot box. We don’t want to be in the way of a potential election surprise that could potentially render the entire Abenomics agenda a thing of the past.
While we’re likely to miss out on further upside by not joining in on the craziness of it all, we think this is the most prudent risk management decision for an investor to make at the current juncture. At a bare minimum, those that have risk managed this trade appropriately should look to book gains in the coming days/weeks.
For those of you who have a desire or mandate to keep “riding the bull”, you should take some solace in the fact that with a Z-Score of +0.2x (TTM), the JPY isn’t nearly as crowded of a short now as it has been in recent months. Perhaps there’s another leg down to ~125 vs. the USD right around the corner!
All told, if Abe strengthens his mandate to pursue his crazy economic agenda, we will happily go “all-in” on the long side of Japanese equities (DXJ) and on the SHORT side of the Japanese yen (FXY), while anticipating further economic deterioration in the process! We just find doing so ahead of the elections to be a risky proposition.
Imagine if you were forced to buy Germany’s DAX equivalent in the early 1920s?
SOURCE: The Economics of Inflation by Costantino Bresciani-Turroni, published 1937
Crazy stuff indeed…
Feel free to ping us with any follow-up questions. Have a wonderful evening,
Associate: Macro Team
JACK continues to be on our Investment Ideas list as a long.
- UPSIDE DRIVEN BY COMPS MOMENTUM: +3.1% and +7.7% system comp growth at JIB and Qdoba, respectively, drove strong restaurant operating margin expansion at both brands. JIB outperformed the QSR sandwich segment by 330 bps due to strength in the breakfast and late-night dayparts. Qdoba strength was driven by the conclusion of its Mango Mayo campaign, the return of Queso Diablo as a permanent menu item and double digit growth in catering. Both concepts benefitted in the period from price increases and favorable product mix.
- TRADING AT A CONGLOMERATE DISCOUNT: We believe JACK continues to trade at a conglomerate discount despite the recent success, and long-term potential, of the Qdoba brand. JACK has transformed its business into a largely asset-light model possessing a significant growth driver. With only 638 restaurants, the Qdoba concept has a long runway for growth ahead of it and, this time, we believe management is prepared to roll the concept out successfully. Expect to see 50-60 new Qdoba restaurants next year and 70-110 new Qdoba restaurants annually from 2016-2018. Trading at 11.99x EV/EBITDA, we see several turns of upside assuming the strength of the Qdoba brand persists.
- 2015 GUIDANCE IS ACHIEVABLE: Considering notable comp momentum, continued margin expansion and cash remaining under the share buyback program, we believe management’s guidance of $2.73 to $2.88 EPS in FY15 is conservative. This implies a range of about 11-17% EPS growth, despite having grown EPS by over 30% in the prior two years. Commodity inflation (beef, free sides) and labor cost pressure in some markets is a concern moving forward, but we believe management has fully accounted for this making the guidance range achievable, at the very least.
The Good in 4Q14
- Beat top line and bottom line estimates by 64 bps and 163 bps, respectively
- +3.1% system same-store sales growth at JIB; +7.7% system same-store sales growth at Qdoba
- JIB system same-store sales outpaced the QSR sandwich industry by 330 bps, respectively
- JIB saw growth in both breakfast and late-night dayparts
- Qdoba strength was driven by the conclusion of its Mango Mojo campaign, return of the Queso Diablo, double digit catering growth and less discounting
- JIB restaurant level margins of 17.8% (+210 bps y/y) beat estimates of 17.1%
- Qdoba restaurant level margins of 18.5% (+130 bps y/y) beat estimates of 17.7%
- 1/3 of Qdoba restaurants generate over $1.3 million in AUVs and boast, on average, restaurant level margins of 23%
- Continuing efforts to improve cost structure, identify efforts to cut G&A and improve restaurant profitability
- $117 million remaining under two stock-buyback programs that expire in November 2015; additional $100 million stock-buyback program that expires in November 2016
- Strong 2015 guidance including +6-8% comp growth at Qdoba and system-wide consolidated restaurant level margins of 18.8-19.6%
- Management sounded clear, concise and confident in their plan moving forward, which includes better positioning the JIB brand and conscientiously growing out the Qdoba brand.
The Bad in 4Q14
- JIB traffic declined -2.6%; Qdoba traffic growth of +1.7% was slightly disappointing given the strong comp
Feel free to email, or call, with questions.