Why the drop in fast food -YUM, WEN, MCD?

[wtabacchi]

Can anyone explain why the fast food stocks are down about 1.50 - 1.75 over the last 2 days?

Will

[nodoodahs]

IMO we have to separate the reality of the situation from what the stock speculators and institutional investors believe is happening or believe will happen. Lots of events that impact a stock's trading price have zero or negligible impact on earnings, and occasionally, vice versa.

If institutional money managers want to bet on a recession, one way to do that is be underweight on stocks that constitute discretionary spending and that might be interpreted as including fast food or restaurants.

That doesn't imply that the word "recession" has any meaning other than to a GDP-watching economist, doesn't imply that there will be a recession, and doesn't imply that the stocks mentioned will have their earnings impacted at all. But you can take it to the bank that increased talk of a "recession" will increase selling pressure on fast food stocks. How much? Does it present a profitable trade? I don't know.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[wtabacchi]

[nodoodahs]

Just a guess - fear of a Katrina-induced recession, fast food will be one of the first things people "economize out" of their budgets.
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.