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Taylor: Expect a Bareknuckled Donald Trump Next Debate

Editor's Note: Below is a brief excerpt from Hedgeye Potomac Chief Political Strategist JT Taylor in his Capital Brief to institutional clients this morning. For more info on our institutional research email sales@hedgeye.com.

 

Taylor: Expect a Bareknuckled Donald Trump Next Debate - JT   Potomac banner 2

ROUND TWO REVIVAL?

While the first debate is generally viewed as the most important, the next are very likely to be where the real war will be fought...

 

EXPECT SOME BLOOD TO BE DRAWN.

 

Though the candidates did inflict some wounds, round one was fairly tame by 2016 standards. Hillary Clinton went low on Donald Trump by bringing forward his bullying of a former Miss Universe winner, but Trump showed surprising restraint, and held back, not landing punches on Clinton on topics such as Benghazi, the Clinton Foundation, emails and...her husband.

 

With just under two weeks until the second matchup, though, we expect Trump to take off the gloves, ensuring a real bout when the two meet again October 9th.

ELECTORAL COLLEGE EXAM

With 40 days until Election Day, we’re updating our Electoral College chart, and moving CO and IA into “leaning” categories. In the last month, the polls have tightened significantly and are testing Clinton’s limitations, but she is still poised to retain an edge in the Electoral College according to Cook Political Report - who currently predicts Clinton will obtain a majority, winning the election by just under 80 electoral votes.

 

Click to enlarge.

 

Taylor: Expect a Bareknuckled Donald Trump Next Debate - electoral map


Sell Dave & Busters (25-30% Downside)

Takeaway: PLAY is no longer the only game in town when it comes to big venues to go enjoy games and grab a bite to eat.

Sell Dave & Busters (25-30% Downside) - dave and busters

 

Hedgeye's Restaurants Team, led by Sector Head Howard Penney, will be hosting a Black Book today (at 11am ET) to update their SHORT thesis on Dave & Buster's Entertainment (PLAY).

 

"Competitive intrusion," words seldom used by PLAY's management team, were first mentioned during their 1Q16 call one time, and then three times in their 2Q16 call. During the 2Q16 call Steve King, PLAY's CEO also mentioned, "there is more of that competitive intrusion coming that will affect our fourth quarter." PLAY is no longer the only game in town when it comes to big venues to go enjoy games and grab a bite to eat. 

 

PLAY is facing competitive intrusions in key markets, including Texas. Other markets are also getting hit by differentiated concepts that provide a fun atmosphere with the availability of food.

KEY DISCUSSION POINTS

  • Competitive intrusions intensifying
      • Superior competition moving in on PLAY's territory
      • PLAY losing managerial talent to the competition
  • Food & Beverage sales decelerating, and will drag the rest of the business down with it
  • Discretionary games business will suffer, the margin tailwind is behind them
  • Excessive unit growth
  • Downside: 25-30%

CALL DETAILS

 

Attendance on this call is limited. Please note if you are not a current subscriber to our Restaurants research there will be a fee associated with this research call and related material. Ping sales@hedgeye.com for more information.

 


Poll of the Day: Whose Opinion Do You Trust The MOST?

Takeaway: What do you think? Cast your vote. Let us know.

Poll of the Day: Whose Opinion Do You Trust The MOST? - poll 9 28

 


CHART OF THE DAY: Why We're Confident There Will Be More #GrowthSlowing Data?

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.

 

"... Data? Why am I confident that it will be more #GrowthSlowing data?

  1. Because Durable Goods are going to be reported this morning and they’re in a #recession
  2. US GDP is going to be reported tomorrow and it’s closer to 1% y/y than it’s been all year
  3. Personal Income and Consumption is set to slow (rate of change) on Friday" 

CHART OF THE DAY: Why We're Confident There Will Be More #GrowthSlowing Data? - 09.28.16 EL Chart


What To Expect On Today's Fed Yip-Yap Day

Takeaway: Another "rates are up on Fed" yip-yap day.

All quiet this morning...

 

Ahead of Yellen and her band of Fed Speakers back to the front line of “news-flow” today – Trump/Clinton can eat cake!

 

The Dollar is up small (+0.1% at 95.54 USD Index) ahead of Janet’s testimony in front of the House Financial Services committee (a brilliant bunch indeed) and I wouldn’t be surprised if she tries to talk hawkish amidst acting dovish. Don’t forget that she’s a Democrat who wants to paint the economy as “good”, even though GDP will be reported at 1% tomorrow.

 

Meanwhile, Gold is down small on Fed Head speaker day (they don't like Gold). Another buying opportunity if you see $1315 or lower.

 

Anyone else getting tired of these guys and gals yet? Here's San Francisco Fed John Williams yesterday:

 

"It is getting harder and harder to justify interest rates being so incredibly low given where the U.S. economy is and where it is going. I would support an interest rate increase. I think that the economy can handle that. I don’t think that would stall, slow or derail the economic expansion."

Williams, retire buddy.

 

All in, this should be another "rates are up on Fed" yip-yap day, only because they bounced off low-end of Hedgeye's risk range.

 

What To Expect On Today's Fed Yip-Yap Day - Fed hawkish dovish cartoon 09.20.2016


Cartoon of the Day: Yellen's Arcade

Cartoon of the Day: Yellen's Arcade - Yellen   toy animals 09.27.2016

 

The Fed isn't "data dependent." It's S&P 500 dependent and will do anything to keep the bull market going. 


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