Many of the leading restaurant stocks have come under selling pressure recently. Generally, when the restaurant stocks decline it's a signal that the U.S. consumer is cutting back on spending. Everyone should know that U.S. consumer spending accounts for roughly 70 percent of the U.S. GDP (gross domestic product). Remember, following the leading restaurant stocks will often give traders a good sense of what the economy is doing.
Some of the leading restaurant stocks that have declined recently include Yum! Brands, Inc. (YUM), McDonald's Corp. (MCD), Starbucks Corporation (SBUX) and Chipotle Mexican Grill, Inc. (CMG). All of these leading restaurant stocks still have further downside potential on the daily charts.
A Loss Of Income
The near term daily chart support level for YUM should be around the $70 level. SBUX stock has potential downside to the $68 area according to the daily charts. CMG stock should find daily chart support around the $541 level, so this leading stock still has further downside to go. All in all, this weakness in the restaurant sector is likely telling us that the U.S. consumer lost some of its discretionary income in 2014. 