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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
gdogus erectus's picture

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."






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


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


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.

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