Week 29 Performance.....Up, Up, and Down

It was looking like a pretty good week on Wall Street in the equity markets until Friday.  Earnings this week had been a mixed bag with some decent economic news blended in.  But then the wheels fell off when Chipotle Mexican Grill missed sales expectations and finished down 21.5%.


$CMG is one of those classic momentum names that when it is flying it is flying high and when it misses it gets shots down in a hurry.  CMG was able to bring down other names in the sector such as Buffalo Wild Wings $BWLD, Panera Bread $PNRA, and a host of other restaurant .  The fear about trying to pick up these names today as they were getting crushed is the fact that the carnage may not be over yet.  


As the drought continues to stricken the Midwest and corn prices hit all time highs, profit margins with the food names could face additional pressures.  Even if companies are able to push some costs onto consumers, that could lead to lower revenues and still impact the bottom line.


However, every time these names have pulled back, it has represented a buying opportunity.  We still believe that there are growth opportunities within $CMG, $BWLD, and $PNRA and that these are all names we would like to own.  But, we think there may be even better buying opportunities within the next few months.


We believe that if there is one way to play the severe drought conditions it is to wait patiently for these growth names to pull back.  Trying to buy into the grains and other commodities at this point would be a riskier move.


The DWCM fund was in line with the rest of the major markets this week, up 0.6%.  For the year we remain solidly in the black up 16.3% beating all four major equity benchmarks.  Our ag and dividend payer strategies have performed extremely well especially over the past few weeks. Our home builder short position after two weeks is flat despite the bevy of stronger housing reports this past week.  [see Housing Starts & Sentiment]

The Week Ahead
Earnings season rolls on this week which should be our main focus.  Dare I say that Europe has been quite and after Bernanke's speech this past week, the focus could be squarely on earnings?  That may be good news for some companies and bad for others.


Again here is a link to an Earnings Calendar.  You can sort by company or just input the stock symbol of the company that you are looking for.  I had posted early this week here the list of companies that we are keeping a close eye on.


It will be another test of our housing sector strategy as new and pending home sales are reported this week.  Friday will be the big economic day with both GDP and consumer sentiment releases in the AM.

• Mon -  Chicago Fed National Activity Index
• Tue -  PMI Manufacturing Index Flash,  FHFA House Price Index
• Wed -  New Home Sales
• Thu -  Durable Goods Orders,  Jobless Claims,  Bloomberg Consumer Comfort Index,  Pending Home Sales Index Kansas City Fed Manufacturing Index
• Fri -  GDP,  Consumer Sentiment

DreamWorks Capital Management

FREE Seminar:  Our next finance seminar will be on Tuesday September 18th at the The Community House.   The topic will be Balancing Your Changing Investment Needs: Emergency Fund, Investments, Retirement, Education, and Philanthropy.  We will cover significant points regarding creating, developing, and executing on your wealth management plan.  We hope to have another interactive group, so be sure to sign up by emailing me directly at pfenner@dwcmllc.com or by contacting The Community House at 248-644-5832.  There is no charge and light refreshments will be served.