10/19/15 CMG | MOVING IT TO THE SHORT BENCH
10/14/15 DFRG | WHEN UGLY TURNS BEAUTIFUL
10/7/15 YUM | HOLDING ONTO THE PAST
RECENT NEWS FLOW
Friday, October 16
Beef | A 50% decline in beef prices back to historical averages is well within the realm of possibilities. (HEDGEYE NOTE)
Thursday, October 15
YUM | Appointed Corvex’s Keith Meister to the Board of Directors, additionally, YUM announced that they are near the conclusion of a strategic review (ARTICLE HERE)
MCD | Per an interview conducted by The Wall Street Journal with board member Miles White, Mr. White spoke about the review of the possibility of a REIT were going on but that no definitive decision has been made (ARTICLE HERE)
Tuesday, October 13
DFRG | Reported 3Q16 earnings that were not good, but the worst is now behind us (HEDGEYE NOTE)
SBUX | Introduced delivery service inside the Empire State Building (ARTICLE HERE)
Casual Dining and Quick Service stocks that we follow widely underperformed the XLY last week. The XLY was up +0.7%, top performers on a relative basis from casual dining were BLMN and BBRG posting an increase of +3.2% and +0.9%, respectively, while HABT and ARCO led the quick service group this week up +6.8% and +3.4%, respectively.
XLY VERSUS THE MARKET
The XLY has fared better than most other sectors in the YTD time period but as of late has been lagging slightly. In the last five trading days the SPX was up +0.9% and the XLY was up just +0.7%.
From a quantitative perspective, the XLY looks BULLISH from a TRADE and TREND perspective, TREND support is 76.01.
CASUAL DINING RESTAURANTS
QUICK SERVICE RESTAURANTS
Keith’s Three Morning Bullets
So far, no good = 58/500 S&P names have reported = Revs -2.7%, EPS -7.9% - bull market, in storytelling (and Long-Term Bonds):
- USD – down for the 3rd straight week (post that terrible US jobs report) gave the SPX short squeeze what it needed (up, on decelerating volume, to lower-highs) but USD appears to be stabilizing this morning = Oil (-1.1%), Gold (-0.4%), and the “reflation” trade no likey
- NIKKEI – Japanese stocks no likey Down Dollar = Up Yen either; after closing -0.8% last week, Japan didn’t believe the China “news” and sold off -0.9% into the close, taking Nikkei -12% in the last 3 months (with USD -3.2% in the last 3 months)
- CHINA – look on the bright side of their storytelling, they didn’t stick a 7.0 this time and made-up “6.9%” GDP instead. Lol. Even the locals (who are paid to think a certain way) didn’t buy Chinese stocks on that – Shanghai Comp closes -0.14%
SPX immediate-term risk range = 1; UST 10yr 1.98-2.07%
Please call or e-mail with any questions.