The Economic Data calendar for the week of the 12th of January through the 16th of January is full of critical releases and events. Attached below is a snapshot of some of the headline numbers that we will be focused on.
Takeaway: An earlier Wave may signal a longer period of promotional activity
CALL TO ACTION
Wave Season promotions began earlier than usual for many of the operators. Given the difficult 2014 environment in the Caribbean, we’re not surprised. The early promoters seem to be the relatively struggling brands. 2015 bookings curve could be pushed out a little bit at the expense of lower pricing and promos.
Please see our detailed note:
Here's a quick look at some of the top videos, cartoons, market insights and more from Hedgeye this past week.
Gabelli Unplugged: Finding Hidden Value, Secrets to Long-Term Success and Why the Knicks Will Win
Billionaire value investor Mario Gabelli of Gamco Investors sat down with Hedgeye CEO Keith McCullough in a granular, wide-ranging “Real Conversations” interview to discuss his investment strategy, process and where he sees opportunity right now.
Hedgeye Morning Macro Call with CEO Keith McCullough: Crystal Ballers
On Tuesday’s institutional Macro Call, Keith discusses the importance of having a daily process rather than relying on a crystal ball or moving "monkey" averages.
Keith highlights the great run in bonds, how ugly things really are in Europe and the epic down move in commodities.
***This is a complimentary peek behind-the-macro-scenes of our daily Morning Macro Call for institutional subscribers.***
"Draghi Has No Plan": McCullough Talks Europe, Japan, and U.S. Dollar
In this excerpt from Wednesday’s Morning Macro Call, Keith answers questions about today’s $SPX trading ranges and describes the different durations.
Keith also discusses the likelihood of a dovish Fed and what impact that will have on the three main currency players (Yen, USD and Euro).
Subscribe to Hedgeye's Daily Trading Ranges product to receive Keith's proprietary ranges for the S&P 500, U.S. Dollar, Euro, and more every morning before the market opens.
McCullough: One Thing That Could Trigger a Recession
In this excerpt from Monday’s Real-Time Alerts Live show, Hedgeye CEO Keith McCullough responds to a subscriber’s question about whether a U.S. recession is coming.
CLICK HERE to subscribe to Real-Time Alerts. With your subscription you'll receive all of Keith's #timestamped signals sent right to your inbox, as well as full access to this and all other RTA Live episodes.
IT'S ALL GREEK TO ME
Greece's crumbling economy and its potential impact on the EU is roiling global markets. Again.
HITTING THE SLOPE
The yield on the 10-year U.S. Treasury fell under 2% to its lowest level since May 2013. On a related note, yes... Hedgeye's macro team remains long TLT.
RIDING #QUAD4 (UNTIL THE DATA CHANGES)
It’s been years since we’ve seen so many great long and short ideas across the Global Macro universe. At 1PM EST Thursday, our macro team led by CEO Keith McCullough reviewed our Global Macro Themes for Q1 of 2015.
WHAT MY MACRO CRYSTAL BALL SAYS ABOUT THE RUSSELL | $IWM
Editor's note: This is an excerpt from Tuesday's Morning Newsletter by CEO Keith McCullough.
The other thing crystal ball is telling me this AM is don’t short the Russell 2000 today. #Pardon? Yes. You heard it from whatever this transparent ball is that I am rubbing this morning first! Do not short the IWM because:
WILL THE 10-YEAR TREASURY YIELD GO BELOW 1.75% AT ANY POINT THIS YEAR?
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Considering last night’s news that COO Troy Alstead is taking a “coffee break” from the company, we are inclined to believe there is more to the story than Starbucks is willing to tell. The general sentiment in the investment community seems to be that the move doesn’t “feel” right – a sentiment we share. Yesterday morning we firmly believed Troy was next in-line for the CEO position and, now, we’re left with little more than questions and skepticism.
Whether it played a direct role in Troy’s departure or not, the company has taken a big bet on food and it doesn’t seem to be working. With this in mind, we decided to re-run our consumer survey focused on the food at Starbucks – and the results revealed a noticeably unfavorable trend. Knowing this, along with the recent timeline of events below, we continue to have sound conviction in our short thesis.
September 2014: Hedgeye adds Starbucks to the Best Ideas list as a short. The core of the thesis is predicated on rapidly decelerating traffic – the new food is not resonating with consumers and is leading to increased menu and operational complexity.
October 2014: Starbucks misses 4Q14 EPS and guides down FY15 estimates. Traffic trends are a serious red flag for analysts, but management insists any concerns are unfounded.
December 2014: COO Troy Alstead plays a major role at Starbucks analyst day and is clearly positioned as the heir apparent to the CEO role. Food is a major topic of discussion and is framed as one of the keys to the future of the company.
December 2014: Hedgeye’s channel checks indicate that holiday promotions are not being as effective as planned.
January 2015: The Street begins to lower 1Q15 same-store sales and traffic estimates.
January 2015: Starbucks hires a new VP of Food. The Street begins to wonder why it has taken this long to hire a culinary person given the company’s food ambitions. Furthermore, it’s unclear what happened to the two executives that presented at the analyst conference.
January 2015: Starbucks announces that COO Troy Alstead is taking an “unpaid coffee break” to “spend time with his family.” Given Troy’s role at the recent analyst meeting, his rash unpaid leave is taken with significant skepticism.
Last September, we ran a consumer survey in which we gathered over 1,500 responses and learned that the overwhelming majority of Starbucks customers that participated were not in favor of the company's new food offerings.
We recently re-ran this survey in order to gauge any swing in sentiment one way or the other. The results were quite telling:
Hedgeye CEO Keith McCullough shares the top three things in his macro notebook this morning.