Monday Mashup

Monday Mashup - CHART 1

RECENT NOTES

9/11/15 REPLAY | GOING LONG UNFI BLACK BOOK

9/04/15 GIS | Sends the Jolly Green Giant Packing

9/02/15 HSY | THE CURRENT SET UP IS LEANING LONG

8/31/15 HAIN | LOW QUALITY & INCREASED BUSINESS RISK

RECENT NEWS FLOW

Friday, September 11

MNST | Board of Directors have authorized a new share repurchase program of up to $500mm (click here for article)

PEP / SODA | PepsiCo is expanding its distribution partnership with SodaStream (click here for article)

 

Thursday, September 10

MDLZ | Provided an update on cost savings initiative and reaffirmed 2015 guidance (click here for article)

 

Wednesday, September 9

FLO | Announced the acquisition of Alpine Valley Bread Company, for $120mm in cash. FLO anticipates FY16 sales for the Alpine business to be $85mm - $95mm, the business has been growing at a CAGR of 51% over the last three years (click here for article)

 

Tuesday, September 8

MKC | Plans to expand organic and non-GMO offerings in 2016 (click here for article)

Angie’s | Adding popcorn production capacity in Reno, NV as the competition in RTE-popcorn heats up (click here for article)

SECTOR PERFORMANCE

Food and organic stocks that we follow outperformed the XLP last week. The XLP was down -0.4% last week, the top performers on a relative basis from our list were B&G Foods (BGS) and United Natural Foods (UNFI) posting increases of +6.3% and +4.7%, respectively. The worst performing company on a relative basis on our list was Lifeway (LWAY), which was down -2.8%.

Monday Mashup - CHART 2

QUANTITATIVE SETUP

From a quantitative perspective, the XLP is bearish on a TRADE and TREND duration.

Monday Mashup - CHART 3

Food and Organic Companies

Monday Mashup - CHART 4

Monday Mashup - CHART 5

Monday Mashup - CHART 6

Keith’s Three Morning Bullets

Bets continue to mount on a Dovish Fed meeting…

  1. USD – US Dollar Index closed on its low for the wk (-1.1% on the wk) and is seeing follow through selling this morning vs. both Euros and Yens – what’s most interesting about this to me is that on 30-day correlation, SPX has a POSITIVE correlation to USD of +0.8 (meaning a Dovish Fed could be bad for stocks)
  2. JAPAN – Down Dollar is definitely bad for Japanese Stocks – that INVERSE correlation has not changed; Yen +0.3% took another -1.6% out of the Nikkei overnight – it’s -12.5% in the last month with the US Dollar -2.7% (and Yen +3.8%)
  3. UST 2yr – yield tested a “breakout” above 0.75% for the 6th time in 6 months last wk… and failed; back down to 0.71% on Dovish Fed spec this morning and, with Fed Fund Futures this low, I still think the Fed could train wreck macro markets if they tighten

SPX immediate-term risk range = 1; UST 10yr Yield 2.13-2.24%

 

Please call or e-mail with any questions.

Howard Penney

Managing Director

Shayne Laidlaw

Analyst