Please be advised that we are removing ZOES from Investing Ideas today. Below is a brief note explaining why from Hedgeye CEO Keith McCullough.
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This is a not a fundamental research call from Hedgeye Restaurants Sector Head Howard Penney – if your investment horizon is 1-3 years, this note may not matter to you.
From an intermediate-term risk management perspective (in line with my note from this weekend) this is a “grossing” down call of most things equities ahead of what may very well be a real US equity market correction.
Other things to consider with a move like this (we call these Style Factors):
- Liquidity – total US equity market volume continues to decelerate on the up moves
- Size (meaning market cap) – Russell 2000 is signaling a potential phase transition from bullish to bearish
- Sector – with the company “news” out of the way, sector pressure associate with higher gas prices matters