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Is Eating-Out Signaling Stocks Are Going Down?
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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I don't recall anything about stocks when going down and eating out.
Yeah would think eating out is a lagging indicator to going down
Stockings maybe?
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?
When I last checked there were 69 comments on this article
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.
stocks going down....now thats rich....nothing ever signals stocks going down anymore /sarc
Eat out - dine at the Y
pussy is the only eating out I do anymore and even that's becoming scarce
No wonder I have lost 25 lbs since getting married
I seek chewy food.
Hey, I'm a member of PETA!
PETA - People Eating Tasty Animals.
Mmmm ... krisp 'n krunchy!
He said animals not week old road kill.
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.
Interesting Analysis Tyler - Thanks...
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.
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.
Are dumpsters included in the hedonics?
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.
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!
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
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
With fewer and fewer people capable of cooking for themselves, you bet it is another sign that the economy is tanking.
Yep hells kitchen with Ben the baker
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.
Nothing of actual relevance (to anyone who actually thinks, that is) will ever be mentioned any any presidential debate. Ever.
bullish for din, cmg, etc..
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?"
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.
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.
Bullish for Corzine the Muppet Slayer
Disposable income down? Don't worry! There's a credit card for that!
BUT McDONALDS JUST ANNOUNCD THE BIG MAC MEAL IS NOW $4.99!!!
Bullish
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.
yep, certain times of the year people just quit eating
So true and virtually nobody likes to dine outside in nice weather.
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.
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.
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.
Usually I see oil start moving up, gold and ES will follow.
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.
Your name is soooo fitting.
Turn your sarcasm meter on.
Yes let's focus on that instead of the fact that we are all getting Corzined every day.
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.
"You didn't cook that"
Must be breaking into the MRE's a bit early.
When the stockings are going down this may signal some eating out.
QE = quantitative eating
That transport line is telling.
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.
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 !
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.
Dogs can sense economic downturns based on doggie bag count !
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.
This obviously doesn't include Nikki Beach.
The only thing I've been eating lately are shit sandwiches
With balsamic? Try it with balsamic or honey mustard.
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)?
I put in a buy at 1.23, my bad.
et tu, Brute? et tu?....
Alas I knew the origins of this fiasco had to come from ZH. Oh the humanity....
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.
The TRAN index aahhaha ahahaa ahahaghag ahhhh
People are eating out more than ever.
They're behind the restaurant... in the dumpster.
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!
Fox News? Really?
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.
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.
Lenina Huxley: Taco Bell was the only restaurant to survive the Franchise Wars. Now all restaurants are Taco Bell.
Ending of unemployment extensions has a lot to do with this. I think it was some 700K ending by 8-1
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.
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.
I think its bullish, actually. Eating out reduced, investments into financial safety increases, adding to hopes for QE.
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.
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/
The "hopes of more money printing" may be well founded.
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.
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.
I've got a dozen chickens that are almost old enough to start making me breakfast every morning!
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.
This is nothing an increase in your EBT account cant fix!