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Below is an important call-out from our Healthcare Sector Head Tom Tobin on union membership amid the Health Reform debate. The implications will extend into 2010 as the Democrats look to appease the unions and garner votes going into mid-term elections:



Union support of Health Reform is in the news.  With the Public Plan gone from the Senate version, the AFL-CIO and the SEIU are almost withdrawing their support.  I guess the political gambit for Democrats is where else can unions turn if the Dem's disappoint them?  Unions are an interesting participant in the Health Reform debate.  Presumably, by moving their negotiating partner when it comes time to talk about financing the health benefits of their workers, the government is a better choice than the Industries their workers serve.  Organizing union members for a politician’s campaign gives the union greater leverage, since the politician is presumably more interested in staying in office than concerned about spending tax dollars on benefits.  Grinding it out with Industry, who has a credible threat of moving jobs overseas, the union is in a  much weaker starting position. 


Union membership has been in secular decline for decades, although the rate of change has slowed materially in the last few years.  In recent PCE data, union dues have accelerated despite declines in payrolls.  Could membership be turning?  Union’s health benefits are good for health providers and neutral for Managed Care, since the benefits are managed through a TPA, or third party administrator.  Meanwhile, The Employee Free Choice Act appears to still have a lifeline.  With unions feeling snubbed over the public option and Politicians still needing campaign help, look for the unions to return for something.  Democrats will certainly be knocking on the door come 2010 mid terms. 


 Disunity - Labor Unions1


Disunity - Labor Unions2



We got a little update on what's going on at Marina Bay Sands (MBS) this weekend from some friends on the ground.



CEO and Chairman, Sheldon Adelson, was apparently in Singapore this weekend and toured MBS, allegedly by driving through the atrium in a car.  While there has been many articles published over the last few days regarding the opening of the first stage of Marina Bay Sands in late March/early April, we're hearing that there could be further delays.  However, with the recent assist from the Singapore government, MBS can now open in stages so it's possible that it will open earlier but with less.


We're hearing the logistics firm, Kuehne & Nagel, will be handed the keys to floors 4-22 on January 4th for all 3 towers.  They expect to have most of the furniture in place by late February.  Apparently there are 198 different room types and configurations across the 3 towers.  We heard this past week that several of the furniture orders were incorrect (i.e. left turning sofas when the rooms were designed for right bends).  All of the super high end rooms are located on floors 50-54, which is where the cranes working on the Sky Garden are currently anchored.  Until those cranes are dismantled, and most of the work on the Sky Garden is complete, work on the high floor rooms cannot begin. 


It's now likely that the initial opening includes only some of the hotel rooms.  The Singapore government recently announced it was relaxing some of the deadlines and allowing the project to open in stages.  We believe the government is very keen on the project succeeding, which must be very encouraging to LVS management.  Hopefully, LVS has learned from its governmental affairs mistakes in Macau.

R3: PSS/Footwear Trend Update


December 21, 2009





With average growth of 3% over the past four weeks, we’re seeing the athletic footwear space put up its first positive growth numbers in 14 weeks. Why? It keeps coming back to this ‘toning shoe’ trend (ie MBT, Reebok’s Easy Tones, Skechers’ Shape Ups, etc…). These shoes are embedded in the ‘walking’ category of the industry. ‘Walking’ is only 3% of an $18bn industry – which might not seem like much. But its size has nearly doubled over the past year due to ‘toning shoes’.  The interesting point here is that the athletic category is actually down on a year/year basis if we take ‘walking’ out of the mix. Are we alarmed by this? Not particularly. In past boot cycles – like we have today – athletic rarely has grown, and has not even held up as well as we’re seeing today. While a pair of Manolo Blahnik boots hardly competes against a Nike Dunk for share of consumer wallet, between 5-10% of the athletic business fights for dollars from the marginal fashion consumer who has been drawn to other areas  of footwear and apparel throughout 2009. 


As it relates to market share, this naturally knocks performance brands and rewards those that don’t chase fashion. In other words, it dings Nike and helps Reebok and Skechers.  Several people have asked me whether Nike will throw its hat in the ring here. Fat chance. As for retailers, while one could argue that it attracts dollars to the athletic retailers, I’d push back and call it a simple mix shift. What it does, however, is broadens the retail base that could sell the product (these brands will jam the product into a CVS if they could…).   One of the few companies that will benefit from both the boot and toning trend is PSS. The trend gods are finally throwing PSS a bone.


The charts below tell the story.


R3: PSS/Footwear Trend Update  - Walking Category Chart


R3: PSS/Footwear Trend Update  - Walking Category Pie Charts


R3: PSS/Footwear Trend Update  - 1





  • In an effort to try and make up for potentially lost sales due to the major snowstorm in the Mid-Atlantic/Northeast, many retailers have announced extend hours until Christmas. Target is now opening one hour earlier than planned and closing at midnight up until Wednesday night.


  • According to Neilsen, OldNavy.com was the most visited apparel/beauty site during the month of November. Based on the unique visitors, the site saw a 32% increase in traffic y/y and registered 7.93 million visits. Avon, The Gap, Ebay, and Victoria’s Secret round out the top five for the month.


  • While the buzz is building around the World Cup this summer in South Africa, another international sporting event is gearing up as February approaches. The Winter Olympics this year will feature a higher profile sponsorship program for Under Armour, a brand that sells outerwear but is not necessarily equated with cold weather. The company has apparel deals with the men’s and women’s U.S. freestyle skiing teams, U.S. bobsled and skeleton teams and Canadian curling teams. Expect to see a substantial amount of marketing focused on U.S Alpine skier Lindsay Vonn. Vonn is now considered one of the best U.S skier’s of all time and has won back-to-back World Cup championships.





Loehmann's Lands Credit Deal With GE Capital - Loehmann’s has secured a three-year, $35 million asset-based revolving credit facility with GE Capital, Corporate Retail Finance. The deal, expected to be unveiled today, replaces the revolver held with CIT Group Inc. and takes some pressure off Loehmann’s parent company, Istithmar. Loehmann’s would have required additional support from Istithmar if the revolver didn’t come through. Istithmar is an investment arm of the troubled Dubai World, which is saddled with debt, but last week got a $10 billion lifeline from Abu Dhabi. Along with Loehmann’s, Barneys New York is part of the Istithmar portfolio. Asked if last week’s news on Dubai World had anything to do with securing the GE credit, Jerry Politzer, chief executive officer of Loehmann’s, said, “I don’t think so. I am sure everything in some way, shape or form affects other things, but in this case, not really. We were working on this way before. During the course of discussions [with GE] it didn’t come up.”  <wwd.com>


American Apparel Sale benefits unemployed illegal immigrants - American Apparel sells clothes at up to 85% off, with proceeds going to help the 1,600 employees recently let go after federal inspections found problems with their immigration documentation. "It makes me feel less guilty for buying all this stuff," said Dolores Arellano, 19, one of hundreds of shoppers who thronged Saturday to the parking lot of American Apparel in downtown Los Angeles. The trendy, L.A.-based clothier sponsored the "Justice for Immigrants" event to benefit some 1,600 employees let go in recent months after federal inspections uncovered discrepancies in their immigration documentation. All the proceeds from the sale will go to the families of the dismissed workers and to organizations representing immigrants, said Peter Schey, an attorney for American Apparel in the immigration case. Saturday's pre-Christmas sale featured discounts of up to 85% on shirts, sweaters, and sweaters.  <latimes.com>


Solorzano to Lead Wal-Mart Latin America - Wal-Mart Stores Inc. promoted Eduardo Solorzano to executive vice president, president and chief executive officer of Wal-Mart Latin America, overseeing the retailer’s operations in nine of the region’s countries and Puerto Rico. Solorzano will also become chairman of Wal-Mart de Mexico, which he currently leads as president and ceo. He takes on his new role Jan. 18. Scot Rank, executive vice president and chief operating officer of Wal-Mart de Mexico, will fill the void left by Solorzano. <wwd.com>


Helly Hansen Appoints Baselayer Designer and Category Manager - Helly Hansen announced two new appointments to assist with the development of the brand’s baselayer category. Ida Gullhav was hired as a designer and Kristoffer Ulriksen has been promoted to category manager for baselayer and midlayer. Gullhav, 29 years old, joins the brand with an background in fashion design. Having graduated from the Oslo National Academy of Arts in 2003, she went on to launch her own underwear brand at Oslo Fashion Week the same year. In 2006 her continued success was recognised by the Norwegian magazine, Henne, as she was awarded with the prestigious title of Norway’s Best Fashion Designer. <sportsonesource.com>


Bottega Veneta Opens at CityCenter - Bottega Veneta has launched its third Las Vegas location, a 2,000-square-foot store at CityCenter, the $8.5 billion resort, entertainment and retail development that opened Thursday. The new store will carry the entire line for women’s as well as men’s accessories, fine jewelry, home, gifts and luggage. “The store at CityCenter enables Bottega Veneta to extend the reach of our unsurpassed service and unique shopping experience within an important luxury goods market,” said Bottega Veneta president and chief executive officer Marco Bizzarri.  <wwd.com>


Scoop Opens 'Swing Shop' -  Scoop has converted its clearance space at 875 Washington Street here into a “swing shop” that will change its merchandise concept six times a year like a fashion chameleon. The 770-square-foot boutique, formerly called Scoop It Up, is now known as Scoop After Dark, reflecting the array of evening dresses, sequin skirts and blouses and festive jewelry, shoes and accessories. Yet that could be a temporary moniker since by the end of January, the shop will have a different persona. It could morph into a showcase for a handful of young, emerging designers, or something else. “Open-see” days, an opportunity for designers who may never have been seen by Scoop buyers to show their lines and potentially get an order, are in the works. Or when the weather gets warmer, the shop could be called Scoop Beach, or possibly a spring version of After Dark. It’s to be determined. <wwd.com>


CIT Survival to Be Tested - CIT Group faces some challenges as it hopes it can move certain operating divisions, such as factoring, to the group’s bank in order to survive, while knowing it’ll also have to rebuild some of those operations. That’s the conclusion from CIT on Friday in a management update the firm provided to shareholders following its exit from bankruptcy proceedings on Dec. 10. CIT addressed the firm’s liquidity challenge and the recapitalization of its balance sheet during its bankruptcy. It reduced debt balances by $10.5 billion to $44.3 billion, and it now has some debt maturities that don’t come due until 2012. Bondholders now own CIT, having received equity shares in the reorganized firm. The firm’s goal is to move certain operations, such as the factoring arm, or trade finance division, into CIT’s bank. That will first require regulatory approval. And it still needs to work with the Federal Deposit Insurance Corporation to lift the cease-and-desist order on CIT’s Utah bank. That order prevents CIT’s bank from originating new loans, entering into transactions with affiliates or even accepting new brokered deposits. <wwd.com>


Third record week in a row for John Lewis - John Lewis achieved sales of over £112m in the seven days to Saturday, its third record sales week in a row. The figure is 15.5% up on the same week last year but also beat the same week in 2007 by 11.4%. Online sales growth was more muted, up 7% on the same week last year. Unsurprisingly outerwear sales were a standout performer in the icy conditions, while childrenswear and home technology were also strong. Food gifts, electronic games and board games were popular too. <retail-week.com>


With Christmas a week away, online retailers highlight expedited delivery - Though one fewer of the top 100 online retailers offered free shipping this week than last, several retailers’ home pages put an increased emphasis on free expedited shipping offers that would ensure gifts arrive by the day before Christmas, according to a survey by Internet Retailer. 72 of the top 100 online retailers offered free shipping this week, down from 73 the week before, according to the survey, which was based on reviews of offers presented on the web sites of the top 100 online retailers as listed in the Internet Retailer Top 500 Guide 2009 Edition, which ranks retailers by 2008 web sales. In the comparable week a year ago, 66 offered free shipping. In addition, 74 retailers in the top 100 also presented major promotional displays on their home pages—many highlighting last-minute gift ideas—and a number of retailers followed up with special e-mail offers to shoppers who had signed up for e-mail promotions. Among the e-mail promotions, one of the most generous came from apparel retailer Coldwater Creek, which sent an e-mail offering 30% off anything on the site. <internetretailer.com>


Novelty Fading for Pop-Up Shops - The hottest trend in retailing this year isn’t Zhu Zhu pets or over-the-knee boots — it’s pop-up stores. Global luxury brands, mass merchants and even small, independent designers have opened an avalanche of pop-up stores in the last 12 months to introduce new products or collections, generate buzz or motivate the ever-elusive shopper to buy. They also can be a way for a retailer to test a neighborhood before plunging head-on into an expensive real estate commitment. But the question is whether all these pop-ups are too much of a good thing. Observers believe the concept may be wearing thin and, in 2010, retailers might need to come up with another idea or a fresh angle for the pop-up to excite consumers. That’s key, since the main role of pop-ups is primarily to be marketing vehicles rather than drivers of significant profits and sales. <wwd.com>


Debit-card use grows, but risks still an issue - An estimated 13.5 million Americans still are paying off the Christmas presents they charged to their credit cards last year. This year, eager to control their spending and avoid steep finance charges, many consumers entered the holiday shopping season determined to use the "other" plastic in their wallets: their debit cards. I can control my money that way," said shopper Chris McIntyre. "I know what I can spend and what I can't spend." Debit-card use started to rise dramatically last year, when the depth of the recession became apparent and nervous banks began to freeze credit lines, boost interest rates and tighten lending requirements. In the fourth quarter of 2008, debit-card purchases ($206 billion) exceeded credit-card purchases ($203 billion) for the first time, according to CreditCardGuide.com, a subsidiary of Bankrate Inc. This year, 72 percent of holiday shoppers are relying on cash, checks or debit cards. Avoiding credit cards certainly can pay off: Studies suggest that consumers spend 12 percent to 18 percent less when they pay with cash or its equivalent. <dispatch.com>


U.K. Retailers fear imposition of VAT on food - Fears have been expressed that VAT may be imposed on food in next year’s Budget. Politicians are understood to be considering a levy of about 5% on food in a bid to address the country’s financial challenges, a “senior supermarket figure” told the Sunday Express. The source said VAT on food is “on the agenda” and that, although overall weekly spend would likely remain unchanged, shoppers on a limited budget might switch to cheaper products and cut back on treats. After last year’s temporary VAT reduction to 15%, the rate will return to 17.5% at the start of 2010. Retailers fear that after next year’s general election it could be raised further on non-food items. <retail-week.com>



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Confusion of Aims

“A perfection of means, and confusion of aims, seems to be our main problem.”
-Albert Einstein
Alan Greenspan and Ben Bernanke have perfected the art of Wall Street expectations. In doing so, these two Lords of Leverage have achieved their means. Cutting interest rates on America’s hard earned savings accounts to ZERO, and using American deposits to socialize Wall Street losses has a price, however. This “confusion of aims, seems to be our main problem” as we head into 2010.
In the end, mentally inflexible habits die hard. So will an American policy of abusing her status as the world’s reserve currency and using that currency to create limitless credit. Excessive credit creates asset price bubbles. Then they pop. That’s what you are seeing in Chinese property stocks this month. That’s what you saw in everything US real estate only 14 months ago. If you didn’t get paid to know these things, now you know.
The good news out of all of this is that some of us are still alive to write about it. The new rules of New Reality finance are that we can now expose the incompetence of Washington’s Perceived Financial Wisdom real-time. Wikipedia, YouTube, and Google are stubborn little accountability critters that way.
The sad news, as we head into another holiday season, is that the percentage of Americans living on food stamps has now hit 11%. Before Greenspan and Bernanke bailed out the tech and real estate bubbles, that number was closer to 6%. This is what we get for giving them the keys to America’s vaults of savings deposits.
Even though these guys ignored their own compromised data last week (the Consumer Price Inflation (CPI) report went straight up into the right (+1.8% y/y), the data itself is plenty convincing! He Who Sees No Inflation (Bernanke) gets paid to be willfully blind.
Fortunately, I am not the only risk manager who has figured out that an elderly person who lives on a fixed income and puts gas in her car is financing the Piggy Banker Spread (the Yield Spread is +275 basis points wide this morning). In the last three weeks we have seen a tremendous amount of marked-to-market price momentum build against the Fed Chairman’s case for an “extended and exceptional” period of ZERO percent interest rates.
Here are those accountability checks:
1.      The US Dollar has broken out to the upside on both an immediate term (TRADE) and intermediate term TREND basis

2.      US Financial stocks (XLF) have broken down on both a TRADE and TREND basis

3.      The yield on long term US Treasuries has broken out to the upside with 10-year yields now trading in what we call a Bullish Formation

What’s bullish for interest rates is bearish for bonds. That’s what I mean by Bearish and Bullish Formations. In our risk management model that’s what you get when all 3 of our core investment durations (TRADE, TREND, and TAIL) have prices that are above or below the marked-to-market price. In this case long term bonds yields are in a Bullish Formation.
For 10-year yields, those levels are as follows:
1.      TRADE = 3.43%

2.      TREND = 3.40%

3.      TAIL = 3.21%

At 3.62%, last week we saw the highest yield for 10-year Treasuries in the last 4 months. In conjunction with that breakout in bond yields, we also saw a 3-month high in the price of the US Dollar Index and a 3 month low in the price of the US Financials Index (XLF). Yes, all three of these factors hinge on one thing – He Who Sees No Inflation (Bernanke) seeing the light. The market is already discounting a Fed hike in early 2010.
While the banking division of Goldman Sachs may like to see the free money rates on the short end of the yield curve in perpetuity, the rest of America doesn’t get those preferred borrowing terms. Goldman’s “research” call is that the Fed keeps rates at ZERO well into 2011. How convenient that would be, for them…
Since I covered our long standing short position in the US Dollar on November the 10th and called it the Bombed Out Buck, I have some credibility in calling Goldman’s currency analyst out on this today. This is what he said this morning about getting run over on the short side of last week’s US Dollar squeeze:

“Timing was clearly not optimal, and we were too early in fading the recent improvements in U.S. data and the impact of Greek budget tensions… balance of payments situation remains very dollar negative. We would therefore continue to look for opportunities to position tactically for dollar weakness.”

Goldman didn’t have our inflation forecasts for November CPI and PPI. So I don’t blame them for “tactically” missing why the Dollar could pop, and US Financials (like their own stock) drop. This isn’t called “not being optimal.” This is called being wrong.

Conservative American savers on Main Street are being wronged. It’s time for He Who Sees No Inflation to “get” that. President Obama should. It’s not that complicated. And a confusion of aims is not what is going to get him the political win that he needs against Wall Street.

My immediate term support and resistance lines for the SP500 are now 1089 and 1116, respectively.

Best of luck out there today,


VXX – iPath S&P500 Volatility For a TRADE we bought some protection at the market's YTD highs by buying volatility on 12/14.

EWZ – iShares BrazilAs Greece and Dubai were blowing up, we took our Asset Allocation on International Equities to zero.  On 12/8 we started buying back exposure via our favorite country, Brazil, with the etf trading down on the day. We remain bullish on Brazil’s commodity complex and believe the country’s management of its interest rate policy has promoted stimulus.

GLD – SPDR Gold We bought back our long standing bullish position on gold on a down day on 9/14 with the threat of US centric stagflation heightening.   

CYB – WisdomTree Dreyfus Chinese Yuan The Yuan is a managed floating currency that trades inside a 0.5% band around the official PBOC mark versus a FX basket. Not quite pegged, not truly floating; the speculative interest in the Yuan/USD forward market has increased dramatically in recent years. We trade the ETN CYB to take exposure to this managed currency in a managed economy hoping to manage our risk as the stimulus led recovery in China dominates global trade.

TIP – iShares TIPS The iShares etf, TIP, which is 90% invested in the inflation protected sector of the US Treasury Market currently offers a compelling yield. We believe that future inflation expectations are currently mispriced and that TIPS are a efficient way to own yield on an inflation protected basis, especially in the context of our re-flation thesis.




RSX – Market Vectors RussiaWe shorted Russia on 12/18 after a terrible unemployment report and an intermediate term TREND view of oil’s price that’s bearish.  


EWJ – iShares JapanWhile a sweeping victory for the Democratic Party of Japan has ended over 50 years of rule by the LDP bringing some hope to voters; the new leadership  appears, if anything, to have a less developed recovery plan than their predecessors. We view Japan as something of a Ponzi Economy -with a population maintaining very high savings rate whose nest eggs allow the government to borrow at ultra low interest levels in order to execute stimulus programs designed to encourage people to save less. This cycle of internal public debt accumulation (now hovering at close to 200% of GDP) is anchored to a vicious demographic curve that leaves the Japanese economy in the long-term position of a man treading water with a bowling ball in his hands.


XLI – SPDR Industrials We shorted Industrials again on 11/9 on the up move as the US market made a lower-high.  This is the best way for us to be short the hope of a V-shaped recovery.   


XLY – SPDR Consumer DiscretionaryWe shorted Howard Penney’s view on Consumer Discretionary stocks on 10/30 and 12/2.


SHY – iShares 1-3 Year Treasury Bonds  If you pull up a three year chart of 2-Year Treasuries you'll see the massive macro Trend of interest rates starting to move in the opposite direction. We call this chart the "Queen Mary" and its new-found positive slope means that America's cost of capital will start to go up, implying that access to capital will tighten. Yields are going to continue to make higher-highs and higher lows until consensus gets realistic.


The Macau Metro Monitor.  December 21st, 2009




Las Vegas Sands Chairman Sheldon Adelson said that he expects construction to be restarted on the company’s Cotai Strip project in about five months.  The first phase of the project will be finished by June 2011 and phase two will be completed by the end of 2011, according to Adelson.  Sands China, recently listed on Hong Kong’s stock exchange, raised US$1.75 billion in project financing last month to restart construction on Lots 5&6.  It will also use US$500 million raised from the US$2.5 billion initial public offering for construction purposes.  Construction was halted in November 2008 due to a lack of funding.


LVS’ plans include more than 20,000 hotel rooms in Macau, about 1.6 million square feet of exhibition space, more than 2 million square feet of retail malls and six theaters.  Separately, Adelson said that the first stage of the Marina Bay Sands integrated resort in Singapore will open in early April.



The celebration marking the 10th anniversary of Macau’s return to the motherland and the inauguration of the third-term government of the Macau Special Administrative Region was held on Sunday.  Chinese president Hu Jintao attended the ceremony, where Macau SAR Chief Executive Fernando Chui Sai On and principal officials of the SAR governments were sworn in. 



Macau plans to diversify its economy over the next five years into sectors such as logistics, according to new Chief Executive Fernando Chui.  Chinese leaders also pledged to better regulate gaming in the territory.  Chui said, “While enhancing regulations on the gaming industry, we will also put emphasis on the convention, exhibition, logistics, and cultural industries.  We will also focus on the upgrade and transformation of traditional industries.”


STANLEY HO APPEARS IN PUBLIC macaudailytimes.com.mo

Stanley Ho made his first appearance in more than four months at the inauguration of the third-term Macau SAR government at the Macau dome yesterday.  The 88 year-old had been hospitalized in Hong Kong and has reportedly undergone two surgeries.




Macau’s Statistics and Census Service announced that the consumer price index decreased 0.11% year-over-year in November, compared to the 1.1% fall in the previous month.  On a monthly basis, the CPI increased 0.49% in November, faster than the 0.28% growth in the preceding month.  For the January-November period, consumer prices have risen by 1.21% when compared to the same period in 2008.



President Hu Jintao ended his two-day tour of Macau on Sunday with a groundbreaking ceremony for the SAR’s only comprehensive university.  The move follows up on a promise by the Central Government to give more land to Macau.  The university now begins construction of its new campus on Hengqin Island.  


The S&P 500 finished by 0.6% in uneventful trading on Friday. That said only two sectors were up on the day – Financials and Technology.  Healthcare and Consumer Discretionary were flat on the day and every other sector declined.


The MACRO calendar was quiet, while some sovereign and geopolitical concerns were the focus on Friday. 


The dollar index rose 0.2% on Friday and is now up for three straight weeks.  Last week the dollar index rose 1.6%.  The strong dollar led the S&P to decline 0.4% last week, as Energy and Technology were the only sectors that outperformed and were up last week. 


The Technology (XLK) was the best performing sector on Friday.  The earnings calendar was the driver of the outperformance, with ORCL and RIMM leading the way.  Another notable gainer was TTWO, up 9.2% after Carl Icahn increased his stake in the company. 


The only other sector up on Friday was the Financials (XLF).  The XLF was up on the back of the banking group, with the BKX gaining 2.3%.  Although, last week the BKX declined 2.1% and is now down two weeks in a row.  There was some positive sell-side commentary on the sector, but a short covering rally seemed to be in place.


The Consumer Discretionary (XLY) underperformed on Friday, but was flat on an absolute basis.  There were some concerns about the holiday shopping season in the eastern US this weekend.  A bright spot were Restaurants stocks, with DRI up 7.3% on the day.  On Friday, Malcolm Knapp reported that November casual dining same-store sales came in -4.6% with traffic -4.4%.  On a 2-year average basis, this points to a nearly 190 bp sequential improvement in comparable sales trends.  Also on Friday, SBUX improved 6.4%.   


Consumer staples were the worst performing sector on Friday, declining 1.1%.  On a MACRO level the dollar was the likely culprit for the decline.  The big drag on the sector were Tobacco names and the Food Retailers.  The two worst performing name were WAG and WFMI. 


From a risk management standpoint, the ranges for the S&P 500, the Dollar Index and the VIX are seen in the charts below.  The range for the S&P 500 is 27 points or 1.0% upside and 1.0% downside.  At the time of writing the major market futures are slightly higher.


In early trading crude oil is relatively quiet as OPEC has a consensus on “no change” in oil production quotas for the bloc’s meeting tomorrow.  The Research Edge Quant models have the following levels for OIL – buy Trade (69.52) and Sell Trade (74.30).


Gold erased earlier gains to trade little changed in Asia at $1,112.57 an ounce by 2:15 p.m. in Singapore. It had earlier gained as much as 0.6% to $1,119.69.  The Research Edge Quant models have the following levels for GOLD – buy Trade ($1,101) and Sell Trade ($1,151). 


Copper climbed for the first time in three days in Asia on optimism the global economic recovery is gaining momentum.  The Research Edge Quant models have the following levels for COPPER – buy Trade (3.14) and Sell Trade (3.26).


Howard Penney

Managing Director














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