The Taco Bell American, Yum! Brands Global Economy

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I see that CNBC is reporting that Taco Bell has been one of the few major job creating companies of late. Taco Bell is a subsidiary of Yum! Brands, which includes other firms such as KFC and Pizza Hut. One thing to keep in mind is that Yum! has massive exposure to emerging markets, especially China.

There has been a lot of discussion about whether China’s slowing economy will face a “hard” or “soft” landing. Apart from copper, rather than getting bogged down in the data, I prefer to look at whether the apparently rising large middle class in China continues to spend money going out to eat casual/fast food. Remember, data is just data if no ones acts on it. The jobs number this morning WAS, in fact, horrible because the market told us so. If the Chinese continue to go out for KFC, I expect Yum! to find solid support in the mid-$40’s. If the stock loses that area, perhaps the China bears may be on to something.

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