We are adding Dave & Buster’s Entertainment (PLAY) to the Hedgeye Restaurants SHORT bench. Over the coming weeks we will walk through our fundamental thesis on why we are BEARISH on PLAY.
12/6/15 CMG | STARTING TO COME CLEAN
12/1/15 DFRG | HEADED NORTH
11/23/15 Restaurant Industry Macro Note (Sales, Confidence, Employment and Commodities)
11/23/15 CMG | SHORT THE FUNDAMENTALS
11/20/15 WEN | REMOVING THE SHORT | GOING LONG
Casual Dining and Quick Service stocks that we follow outperformed the XLY, last week, which was down -0.3%. Top performers on a relative basis from casual dining were DFRG and BWLD posting increases of +2.2% and +1.1%, respectively, while YUM and PNRA led the quick service group this week up +4.7% and +2.3%, respectively.
XLY VERSUS THE MARKET
From a quantitative perspective, the XLY looks BULLISH from a TRADE and TREND perspective, TREND support is 78.42.
CASUAL DINING RESTAURANTS
QUICK SERVICE RESTAURANTS
Keith’s Three Morning Bullets
In rate of change terms, at 1.88% y/y that was the slowest NFP print since the cycle peaked in Q1, but the Fed is going to hike on that:
- EURO – that’s why I signaled buy USD on last week’s Euro ramp of +2.7% - it’s back down -0.6% this morning to $1.08 and has no immediate-term support to $1.05; the data doesn’t matter to the Fed – the SP500 does
- OIL – #StrongDollar (rate hike catalyst DEC 16th) driven #Deflation Risk definitely matters to most asset classes – after a -3.8% decline last week, Oil is down another -1.1% this morning to $39.53 and the Commodities complex remains in crash mode
- EM – Japanese Equities +1% on the Dollar Up move overnight – EM Asia continued lower (no likey Up Dollar); Thailand -0.7% (-6.4% in the last month is one of the ugliest); EM (MSCI Index) deflated another -0.9% last wk to -14.3% YTD
SPX immediate-term risk range = 2057-2112; UST 10yr Yield 2.19-2.33%
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