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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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Thu, 08/16/2012 - 10:27 | 2710286 gdogus erectus
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I don't recall anything about stocks when going down and eating out.

Thu, 08/16/2012 - 10:38 | 2710381 Atlas_shrugging
Atlas_shrugging's picture

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

Thu, 08/16/2012 - 10:45 | 2710437 Doubleguns
Doubleguns's picture

Stockings maybe?

Thu, 08/16/2012 - 11:21 | 2710640 gdogus erectus
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?

Thu, 08/16/2012 - 12:30 | 2710954 bank guy in Brussels
bank guy in Brussels's picture

When I last checked there were 69 comments on this article

Thu, 08/16/2012 - 12:04 | 2710860 cnsteph
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.

Thu, 08/16/2012 - 11:21 | 2710636 spastic_colon
spastic_colon's picture

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

Thu, 08/16/2012 - 10:27 | 2710289 Josh Randall
Josh Randall's picture

Eat out - dine at the Y

Thu, 08/16/2012 - 10:33 | 2710333 azzhatter
azzhatter's picture

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

Thu, 08/16/2012 - 11:32 | 2710693 quasimodo
quasimodo's picture

No wonder I have lost 25 lbs since getting married

 

Thu, 08/16/2012 - 13:56 | 2711293 Sokhmate
Sokhmate's picture

I seek chewy food.

Thu, 08/16/2012 - 10:44 | 2710430 metastar
metastar's picture

Hey, I'm a member of PETA!

PETA - People Eating Tasty Animals.

Thu, 08/16/2012 - 11:12 | 2710579 i-dog
i-dog's picture

Mmmm ... krisp 'n krunchy!

Thu, 08/16/2012 - 11:25 | 2710649 gdogus erectus
gdogus erectus's picture

He said animals not week old road kill.

Thu, 08/16/2012 - 23:06 | 2713132 long-shorty
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.

Thu, 08/16/2012 - 10:28 | 2710291 SmallerGovNow2
SmallerGovNow2's picture

Interesting Analysis Tyler - Thanks...

Thu, 08/16/2012 - 10:44 | 2710422 Cdad
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.

Thu, 08/16/2012 - 10:55 | 2710499 Shizzmoney
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.

Thu, 08/16/2012 - 11:14 | 2710596 i-dog
i-dog's picture

Are dumpsters included in the hedonics?

Thu, 08/16/2012 - 12:49 | 2711021 ElvisDog
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.

Thu, 08/16/2012 - 10:29 | 2710299 Auburn
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! 

Thu, 08/16/2012 - 10:29 | 2710304 Seasmoke
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

Thu, 08/16/2012 - 11:14 | 2710599 Randall Cabot
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   

Thu, 08/16/2012 - 10:29 | 2710305 ssp2s
ssp2s's picture

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

Thu, 08/16/2012 - 12:14 | 2710895 max2205
max2205's picture

Yep hells kitchen with Ben the baker

Thu, 08/16/2012 - 10:37 | 2710309 Shizzmoney
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.

Thu, 08/16/2012 - 12:39 | 2710981 Freedom In Your...
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.

Thu, 08/16/2012 - 10:31 | 2710320 buzzsaw99
buzzsaw99's picture

bullish for din, cmg, etc..

Thu, 08/16/2012 - 10:31 | 2710322 pazmaker
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?"

Thu, 08/16/2012 - 10:32 | 2710326 khakuda
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.

Thu, 08/16/2012 - 12:07 | 2710870 ToddGak
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.

Thu, 08/16/2012 - 10:32 | 2710329 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bullish for Corzine the Muppet Slayer

Thu, 08/16/2012 - 10:35 | 2710348 ZeroAvatar
ZeroAvatar's picture

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

Thu, 08/16/2012 - 10:35 | 2710354 adr
adr's picture

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

Thu, 08/16/2012 - 10:35 | 2710356 bigwavedave
bigwavedave's picture

Bullish

Thu, 08/16/2012 - 10:36 | 2710362 Grassfed
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.

Thu, 08/16/2012 - 11:31 | 2710688 azzhatter
azzhatter's picture

yep, certain times of the year people just quit eating

Thu, 08/16/2012 - 17:24 | 2712278 Temporalist
Temporalist's picture

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

Thu, 08/16/2012 - 10:37 | 2710373 e-recep
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.

Thu, 08/16/2012 - 15:06 | 2711668 Winston Churchill
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.

Thu, 08/16/2012 - 10:37 | 2710375 scatterbrains
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.

Thu, 08/16/2012 - 10:59 | 2710525 1fortheroad
1fortheroad's picture

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

Thu, 08/16/2012 - 10:41 | 2710399 TrulyStupid
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.

Thu, 08/16/2012 - 10:44 | 2710425 Doubleguns
Doubleguns's picture

Your name is soooo fitting.

Thu, 08/16/2012 - 13:46 | 2711234 Blano
Blano's picture

Turn your sarcasm meter on.

Thu, 08/16/2012 - 10:52 | 2710481 Dr. Engali
Dr. Engali's picture

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

Thu, 08/16/2012 - 10:41 | 2710404 Patriot Eke
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.

Thu, 08/16/2012 - 10:42 | 2710408 Shizzmoney
Shizzmoney's picture

"You didn't cook that"

Thu, 08/16/2012 - 10:43 | 2710420 Doubleguns
Doubleguns's picture

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

Thu, 08/16/2012 - 10:44 | 2710423 _ConanTheLibert...
_ConanTheLibertarian_'s picture

When the stockings are going down this may signal some eating out.

Thu, 08/16/2012 - 10:44 | 2710431 crito
crito's picture

QE = quantitative eating

Thu, 08/16/2012 - 10:46 | 2710441 Hype Alert
Hype Alert's picture

That transport line is telling.

Thu, 08/16/2012 - 10:46 | 2710443 Quinvarius
Quinvarius's picture

I have first hand knowledge from bars in my area that in the last two months they have been hurting badly.  Plus houses on my block are going up for sale again.

Thu, 08/16/2012 - 11:00 | 2710515 Monedas
Monedas's picture

I can make an excellent bloody mary for about fifteen cents ....  Mexican cane alcohol, clamato, celery, worcestershire, pepper, tabasco, garlic salt !     Sri Racha sauce can be and should be substituted for the tabasco and garlic salt ! Add a little ketchup if you like them sweeter !

Thu, 08/16/2012 - 12:05 | 2710861 1fortheroad
1fortheroad's picture

Yep, States got to dam greedy with their liqure licence fees. Fuckem, way cheaper to drink at home and not have to worry about some dick head cop pulling me over.

Thu, 08/16/2012 - 10:47 | 2710454 Monedas
Monedas's picture

Dogs can sense economic downturns based on doggie bag count !  

Thu, 08/16/2012 - 10:47 | 2710455 bnbdnb
bnbdnb's picture

Chart coincides with oil/gasoline from 2009 forward.

http://futures.tradingcharts.com/chart/RB_/M

As oil prices go up, dining out goes down, and reverse.

April seems to be a big splurge month....all those child tax credits.

Thu, 08/16/2012 - 10:48 | 2710459 chet
chet's picture

This obviously doesn't include Nikki Beach.

Thu, 08/16/2012 - 10:48 | 2710462 hangemhigh77
hangemhigh77's picture

The only thing I've been eating lately are shit sandwiches

Thu, 08/16/2012 - 17:26 | 2712284 Temporalist
Temporalist's picture

With balsamic?  Try it with balsamic or honey mustard.

Thu, 08/16/2012 - 10:51 | 2710477 alien-IQ
alien-IQ's picture

Yes, yes fine...whatever...what I want to know is why is the EUR/USD up 100 pips in the last 3 hours?

Did I miss something (other than the obvious central planning handiwork)?

Thu, 08/16/2012 - 10:54 | 2710494 bnbdnb
bnbdnb's picture

I put in a buy at 1.23, my bad.

Thu, 08/16/2012 - 10:56 | 2710513 alien-IQ
alien-IQ's picture

et tu, Brute? et tu?....

Alas I knew the origins of this fiasco had to come from ZH. Oh the humanity....

Thu, 08/16/2012 - 10:56 | 2710512 101 years and c...
101 years and counting's picture

im waiting for the stocks to toilet paper use ratio.  the more TP thats used, the more confident people are and use that extra square or 2 with each wipe.  ie, stocks up.

when times get tough, there isnt a square to spare.  and stocks crash.

 

Thu, 08/16/2012 - 10:57 | 2710517 BeerGoggles
BeerGoggles's picture

The TRAN index aahhaha ahahaa  ahahaghag ahhhh

Thu, 08/16/2012 - 11:00 | 2710536 shovelhead
shovelhead's picture

People are eating out more than ever.

They're behind the restaurant... in the dumpster.

Thu, 08/16/2012 - 11:03 | 2710546 Jason T
Jason T's picture

I grew biggest garden yet this year.. just finished steaming up an ear of corn.  Feels good to have grown own Vs having to buy and take someone elses ear.  More than anything, I fear for folks starving from this drought.

 

Meanwhile, we have the lowest number of cattle in at least 4 decades.. http://www.foxnews.com/us/2012/07/20/report-us-has-fewest-cattle-in-at-l...

Ethonal bitchez!  

Thu, 08/16/2012 - 11:20 | 2710629 Meatballs
Meatballs's picture

Fox News? Really?

Thu, 08/16/2012 - 11:38 | 2710734 Mitzibitzi
Mitzibitzi's picture

Got a pot of steak and vegetable chilli on the cooker for later. We grew everything in there but the beef - that came from Tom, the farmer up the road.

Sadly, I'm about £40k short of being able to buy somewhere large enough for real self-sufficiency, but I'd say we're doing well with the space we do have. Aquaponics, vertical gardening, composting beds and lots of greenhouse space definitely help.

Thu, 08/16/2012 - 12:22 | 2710923 Freedom In Your...
Freedom In Your Lifetime's picture

Good for you. Once I get settled down somewhere I am going to set up a couple aquaponic beds myself. Have been interested in experimenting with that for a year or two.

Thu, 08/16/2012 - 11:33 | 2710701 Mitzibitzi
Mitzibitzi's picture

Lenina Huxley: Taco Bell was the only restaurant to survive the Franchise Wars. Now all restaurants are Taco Bell.

Thu, 08/16/2012 - 11:33 | 2710704 banksterhater
banksterhater's picture

Ending of unemployment extensions has a lot to do with this. I think it was some 700K ending by 8-1

Thu, 08/16/2012 - 11:34 | 2710712 ItsDanger
ItsDanger's picture

I guess each local area is different but going out to any restaurant of any type has gotten very expensive.  People on lower to mid incomes shouldnt be eating there at all.  the markup rate is obscene.

Thu, 08/16/2012 - 11:37 | 2710730 banksterhater
banksterhater's picture

very true. We only go for prime rib on birthdays, it's 12.95 the best cheapest place, forget any fish is astronomical, Mexican is $10 except for taco stand burritos, all obscene.

Thu, 08/16/2012 - 11:35 | 2710716 Haager
Haager's picture

I think its bullish, actually. Eating out reduced, investments into financial safety increases, adding to hopes for QE.

Thu, 08/16/2012 - 11:41 | 2710750 Shizzmoney
Shizzmoney's picture

Ending of unemployment extensions has a lot to do with this. I think it was some 700K ending by 8-1

I really hope one day, that unemployment checks stop coming in.

Not because I am against the dole itself, but only to finally see people not care about laws like job abandonment, or the 2 week quit grace period.  UE is really the only thing that is preventing mass walk offs and the people waking up and taking this shit seriously, IMO.  No one wants to kill the chance to get that weekly check from Uncle Sam.

Thu, 08/16/2012 - 11:59 | 2710835 Dareconomics
Dareconomics's picture

There's a book of economic indicators that has many tidbits like this:

http://www.amazon.com/Guide-Economic-Indicators-Really-Matter/dp/0062001...

I used to work in the restaurant business, and I can tell you from experience that people first cut back on dining out when times are tough. I do not think that this fact portends a market correction. The stock market is currently divorced from economic reality running on the hopes of more money printing. 

http://dareconomics.wordpress.com/

Thu, 08/16/2012 - 12:28 | 2710949 Bob Sacamano
Bob Sacamano's picture

The "hopes of more money printing" may be well founded.

Thu, 08/16/2012 - 12:53 | 2711038 billsykes
billsykes's picture

Remember kids in 2008 depression, they were saying buy basics (stock market stocks), liquor, cigs, gambling, essential food stocks, sell the banks- well they were wrong. look at car rental companies, huge up who would think that renting a car, usually associated with travel aka business and vacations would go up.

 

I don't think today or in the future is going to be comparable to 2008.

Thu, 08/16/2012 - 14:14 | 2711410 warezdog
warezdog's picture

McDonalds earnings are off because a square fish sandwich is approaching the $4 mark, you know, the one they sell on sale from time to time for 99 cents. My guess is earnings will return when all the Japanese radiation actually makes the fish square to begin with therefore lowering costs of producing a square fish sandwich.

Thu, 08/16/2012 - 14:42 | 2711562 Intoxicologist
Intoxicologist's picture

I've got a dozen chickens that are almost old enough to start making me breakfast every morning!

Thu, 08/16/2012 - 14:57 | 2711656 robertocarlos
robertocarlos's picture

I was happy with a $2.01 double cheeseburger. It was about 6-8 bites but that is as much McD's as I can handle. I was lazy. Some people eat there every day because they are lazy and they see value in the food compared to making their own dinner. Of course they are wrong and the govt will have to pay the health care costs in the future.

Thu, 08/16/2012 - 15:12 | 2711741 Zap Powerz
Zap Powerz's picture

This is nothing an increase in your EBT account cant fix!

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