9/30/15 CMG | LONG IN THE TOOTH?
RECENT NEWS FLOW
Friday, October 2
DIN | Increased quarterly dividend by 5% to $0.92 per share of common stock. Additionally, they raised the share repurchase authorization to $150mm from the currently remaining authorization of $63mm (ARTICLE HERE)
Thursday, October 1
TAST | Announced the acquisition of five Burger King restaurants in Ohio and West Virginia (ARTICLE HERE)
JMBA | CEO and Chairman James White announced his retirement (ARTICLE HERE)
Wednesday, September 30
DFRG | Announced the opening of the Hoboken Grille, this is the 21st Grille location for DFRG across the country (ARTICLE HERE)
Tuesday, September 29
PLAY | Announced proposed secondary offering of common stock, selling stockholders will receive all proceeds from the sale of these shares (ARTICLE HERE)
Monday, September 28
ZOES | Named Sunil M. Doshi their new CFO, he previously served as CFO of Fossil Americas, a $1.8bn division of Fossil Group (ARTICLE HERE)
CMG | Carnitas has returned to 90% of Chipotle restaurants, the company expects to have carnitas back in all restaurants by the end of November (ARTICLE HERE)
QSR | Announced the proposed acquisition of Quick Group, a fast food burger chain in France (ARTICLE HERE)
Casual Dining and Quick Service stocks that we follow widely underperformed the XLY last week. The XLY was up +1.6%, top performers on a relative basis from casual dining were CHUY and CBRL posting an increase of +5.6% and +0.4%, respectively, while ZOES and YUM led the quick service group this week up +6.2% and +2.2%, respectively.
XLY VERSUS THE MARKET
The XLY has fared better than most other sectors in the YTD time period and as of late especially. In the last five trading days the SPX was up +1.0% and the XLY was up +1.6%, outperformed by XLV (Healthcare), XLE (Energy), and XLB (Materials).
From a quantitative perspective, the XLY looks bearish from a TRADE and TREND perspective, TRADE support is 72.14.
CASUAL DINING RESTAURANTS
QUICK SERVICE RESTAURANTS
Keith’s Three Morning Bullets
Bad Jobs à Dollar Down, Rates Down à Energy/Basic Materials Crash/Squeeze (so much for the rate hike):
- US DOLLAR – down USD on Friday as rate of change in NFP hit another YTD #slowing low = EUR/USD up another +0.6% this am testing $1.13 and the headline chase for everything “reflation” (from Glencore to Crude and Russian stocks) is on!
- UST 2YR – after 7 consecutive failed “breakouts” > 0.75% in the 2yr, it got hammered -11bps last week and is down at 0.57% this morning (10yr = 1.99%) as Bond Bear hopes of a rate hike get blasted into 2016; rates were oversold Friday on the lows
- STOCKS – but, but – “stocks are up” – sure, off those early Friday morning lows where both the Russell and SPX tested YTD lows, and led largely by Basic Materials (XLB) reflation of +2.9% while Financials (XLF) were down w/ rates -0.5% on the wk
SPX immediate-term risk range = 1; UST 10yr Yield 1.94-2.09% (both Bond Yields and SPX signaling lower-highs)
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