Wednesday, September 1, 2010

Short Covering responsible for the rally in Consumer Names


  • Consumer shares getting a lift with the tape ahead of SSS with M&A discussions in the press helping spur the group higher. The higher-beta, more heavily shorted, early-cycle shares are outperforming today. The desks are telling me that the move is mostly short covering on the pop. JOSB shares are rallying +13.5% after reporting an earnings beat while SKS shares are underperforming, dn 4.8%.
  • In the Restaurant space, BKC shares are up 15% after NYT reported that co was in talks about a potential sale to 3G Capital. In the Autos, group was strong all morning with the tape but F shares have moved off highs after the co reported August Auto sales slightly light vs. the St. and provided initial Q4 production guidance below CSM estimates. In Staples, BFB shares are off ~5% after an earnings miss and HNZ shares are flattish (and underperforming the group) after the co beat on a tax benefit and talked dn Q2 on the CC

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