Diamonds and Dogs

1/25/16

Bacon, egg and cheese on an English muffin is perfect for anytime during the day for today's diamond, McDonalds (MCD). McDonalds is bucking the trend up a 1% this morning hitting a new 52 week high following better than expected earnings. McDonalds launched all day breakfast last year to spur new business. Fourth quarter earnings seem to agree along with recent same store sales which jumped 5.7% verse estimates of 2.7%. Global same stores sales are also doing well. After two years of no growth, the stock is acting well actually positive for the year. Very few stocks can say that.

 Looks like oil isn't the only commodity getting hit. International Paper is down 9% making a new 52 week low due to a downgrade and recent imposed price cuts for their product to boost demand. The analyst at Citi Bank went from a "buy" to a "neutral" on International Paper today lowering their price target to $38 from $45. Although January's price cut could conceivably be a "'one and done' catch-up measure" and producers could potentially increase prices in spring or summer, these upside risks are balanced by the possibility of further price erosion, Citi wrote in a note. During prior periods of price declines, list prices fell in "a disorganized fashion" for months. Let's hope this commodity free fall ends sooner rather than later.