Is Eating-Out Signaling Stocks Are Going Down?

Tyler Durden's picture

We have discussed this somewhat obscure indicator of our obese nation's spending comfort-factor in the past, but just as divergences from economic and non-equity market realities seem de rigeur currently, we though we'd dust it off. The percentage of disposable income spent on eating-out has plunged dramatically in the last two months (the biggest drop since Lehman!) - after running up in a well-correlated manner with stocks - from the 2009 lows. It would seem that once again, equity hopefulness-divergence is writ large here and yet consumers are not buying the hype/hope.

 

The ratio of eating-out to disposable income has plunged by its most in 4 years over the last two months...

 

which perhaps offers some reality checks for our ever hopeful equity market...

 

Charts: Bloomberg

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gdogus erectus's picture

I don't recall anything about stocks when going down and eating out.

Atlas_shrugging's picture

Yeah would think eating out is a lagging indicator to going down

gdogus erectus's picture

Yeah! Maybe that was it! Bunch of jeuviniles that can't keep their reptilian minds out of the gutter. What a buch of neanderthals. What has happened to this site?

bank guy in Brussels's picture

When I last checked there were 69 comments on this article

cnsteph's picture

Tyler, I think the appropriate phrase should be "dinning-out"?  Pretty sure eatting out and the market are unrelated.  I could be quite wrong though. . . there is definately a market for eating-out.

spastic_colon's picture

stocks going down....now thats rich....nothing ever signals stocks going down anymore /sarc

Josh Randall's picture

Eat out - dine at the Y

azzhatter's picture

pussy is the only eating out I do anymore and even that's becoming scarce

quasimodo's picture

No wonder I have lost 25 lbs since getting married

 

metastar's picture

Hey, I'm a member of PETA!

PETA - People Eating Tasty Animals.

i-dog's picture

Mmmm ... krisp 'n krunchy!

gdogus erectus's picture

He said animals not week old road kill.

long-shorty's picture

ok, "PETA" member. can you please explain to me why so many members of your organization feel it necessary to have both (1) a "People Eating Tasty Animals" sticker and (2) a set of testicles on their pick-up truck? These two items have an r-squared of like 0.70 around here.

SmallerGovNow2's picture

Interesting Analysis Tyler - Thanks...

Cdad's picture

Indeed...publicly traded restaurant stocks are now well off of what is clearly a giant cyclical top.  I wouldn't own any of them, and I would short rallies in them.  As to what that means in a macro economic sense...well, that is simply common sense.  It is the first of many more instances to come of discretionary spending tumbling to the downside.

Shizzmoney's picture

Fast food restaurants are stepping u pthe ante in the corporate propaganda ("Our food is real! Please come spend money here!"). Even McDonald's earnings are off!

Maybe poeple are eating out less because they want ACTUAL food (and cut out the labor overhead).  Or, when they do eat out, they are going to the highest rated places to get best bang for their buck.

i-dog's picture

Are dumpsters included in the hedonics?

ElvisDog's picture

You know what I find funny? McDonalds advertising campaign about their products being less than 400 calories. The reason a Filet 'O Fish is less than 400 calories is because all of McDonalds product sizes have shrunk significantly over the past couple of years. As if no one would notice. A Big Mac is tiny now.

Auburn's picture

Next stop - S&P 1415.  I feel like I've been eating out on bath salts watching these markets react to neg news with a big smile.  Can't beat the algo's I guess ...... for a couple more weeks at least! 

Seasmoke's picture

Was in saratoga last week, right in the middle of season, which usually means longs waits.......not this year !....walked right in every time , i was shocked

Randall Cabot's picture

Jersey shore not doing good either:

"Things are bad," says Pat Tirotta. "Normally at this time, I’ll have 30 people in here. Look at it now. Business has been terrible. I can’t move my stuff, and I make first-rate stuff."

 

 

 

 

http://www.nj.com/news/index.ssf/2012/08/still_cooking_at_93_and_despit.html   

ssp2s's picture

With fewer and fewer people capable of cooking for themselves, you bet it is another sign that the economy is tanking.

max2205's picture

Yep hells kitchen with Ben the baker

Shizzmoney's picture

I love how wages, or disposable income, is never discussed in the POTUS debate.

Because, you know, it's not like a Keynesian Consumer economy needs that stuff to grow infinitely in an infinite debt environment or anything.

Freedom In Your Lifetime's picture

Nothing of actual relevance (to anyone who actually thinks, that is) will ever be mentioned any any presidential debate. Ever.

buzzsaw99's picture

bullish for din, cmg, etc..

pazmaker's picture

Ancedotal it is, but we ate out last night at our favorite Thai restaurant which usually has a large crowd and only three other tables were occupied.  I made the comment to wife.."What's up with this this place is usually packed?"

khakuda's picture

Not surprising with food away from home inflation outpacing food at home in recent months, an ugly election shaping up and crap news out of just about every region globally.

ToddGak's picture

I have just started bringing my lunch to work a few times a week, instead of eating out.  It's tough to find lunch anywhere (other than Subway or fast food) for less than $10.  I can probably save $75-$100 a month doing this.

Mr Lennon Hendrix's picture

Bullish for Corzine the Muppet Slayer

ZeroAvatar's picture

Disposable income down?  Don't worry!  There's a credit card for that!

adr's picture

BUT McDONALDS JUST ANNOUNCD THE BIG MAC MEAL IS NOW $4.99!!!

Grassfed's picture

It appears that there is a seasonal dip this time of year every year.  If so, the conclusion drawn is not good work, it is biased work just like from the government.  I think ZH can do better.

azzhatter's picture

yep, certain times of the year people just quit eating

Temporalist's picture

So true and virtually nobody likes to dine outside in nice weather.

e-recep's picture

something big is comin' and no QE will be enough to re-inflate things. energy and food prices have already gone thru the roof and if they dare to QE, it will hurt the masses like it never did before.

Winston Churchill's picture

Think its already arrived.

Still no repo data on NY Fed site.

Six days and two reports late.

The collapse of shadow banking repo funding caused the 2008/9 crash.

Well, the toxic collateral caused it, in truth.

Happy days may be here again.

scatterbrains's picture

OT but has anyone noticed how gold jumps out at the same moments the invisable hand comes in and arrests the lows in /ES?  Looking at a 30 minute active /ES contract and overlaying the active 30 minute gold contract reveals (and maybe the boring low volume market makes the NYFed more visable) at least to me, that somebody close to the fed actions grabs some gold every time they see the fed manipulating the market...so it seems.

1fortheroad's picture

Usually I see oil start moving up, gold and ES will follow.

TrulyStupid's picture

I eat only mechanically deboned chicken deep fried in a tasty batter, genetically modified, tortured, imprisoned and killed by the good Christian folks at Chick-fil-A. Not available to homos.

Doubleguns's picture

Your name is soooo fitting.

Blano's picture

Turn your sarcasm meter on.

Dr. Engali's picture

Yes let's focus on that instead of the fact that we are all getting Corzined every day.

Patriot Eke's picture

My family used to go out to eat every other weekend on pay days.  We no longer do it.  That's just one example, but we are definitely part of the above data.

Shizzmoney's picture

"You didn't cook that"

Doubleguns's picture

Must be breaking into the MRE's a bit early.