Tuesday Aug 6, 2024
I watched an interesting seminar from EWI today. Here is one of the ratio charts shown. It is the ratio of Campbell Soup stock priced versus Darden Restaurants, in fact the seminar used a restaurant index but Darden DRI owns several restaurants.
The chart is falling overall when people would rather dine out at Darden than stay home and have Campbell Soup. Note the huge spike in 2008 during the sub prime crisis. Restaurants were only in business if they had a drive in window or created curb service. Since then going out to eat other than the covid drop in 2020 has been the norm.
Now let's drill down for a closer look, what is going on today?
Now Campbell is out performing Darden! Here is the story of the real economy. Inflation has made eating out expensive so folks are staying home.
Never mind what the FED is doing. Look at what the market is doing. The ten year note price and yield is widely followed.
Ten Year Note
The yield has fallen a full percentage point from its high or 10 basis points. This is at a previous low marked by arrow last December. Once again the market is way ahead of the FED. I suspect by year end we will have higher not lower interest rates.
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