American Airlines' Rebirth, Sysco Gets Hungry, and McDonald's Sales Taste Bad

Unless you're helping your buddy avoid picking one of the 10 worst holiday presents to give his girlfriend, you probably were still enjoying Friday's solid jobs report. On Monday, the Dow  (DJINDICES: ^DJI  ) rose five points as investors weighed the November employment news with a couple of big speeches from the Fed.

1. McDonald's sales lose some bite
Ronald McDonald is a creepy clown dude, but it's McDonald's recent sales news that scares investors. Shares of McDonald's (NYSE: MCD  ) (NYSE: MCD  ) fell 1.12% Monday after sales at U.S. stores dropped by 0.8% in November when analysts expected a gain.

What's the problem? An extra-large serving of competition. Burger King recently rolled out a McRib alternative and Taco Bell introduced breakfast foods (where's the fajita lox?), and McD's has been forcing new food items down your throat that haven't stuck -- pumpkin lattes, chicken wings, and bacon cheddar McChicken sandwiches. The MarketSnacks team is satisfied with a Happy Meal toy.

The takeaway is that America has been unkind to the world's largest chain restaurant lately. U.S. fast-food sales rose nearly 1% in 2012 and McDonald's European sales gained 1.9% last month, but its U.S. same-store sales haven't gained more than 1% since July. Wall Street's starting to worry about the trend.

2. Biggest airline merger is official
There's a new member to the mile-high club because the union of US Airways and American Airlines has been consummated. The fancy new baby American Airlines Group stock AAL was trading on the Nasdaq stock exchange Monday as the biggest airline... ever.

Regulations, schmegulations. All regulatory hurdles have been cleared with the Department of Justice since the merger was proposed last spring -- and compromises on the "free peanuts vs. free pretzels" argument have been found (now both will come at a cost). The merger marks the end of decades of consolidation in the airline industry. The stock took off with a first-class 2.7% gain in its debut.

3. Sysco hungry for $3.5 billion acquisition
$3.5 billion is the number of the day. That's how much Sysco Foods (NYSE: SYY  ) is purchasing US Foods for (and Wall Street is hungry for it). Sysco is a mammoth food distributor whose major clients include the U.S. military, schools nationwide, and even one of NYC's most expensive restaurants, Per Se.

Investment bankers are calling this merger "the best thing since sliced bread." According to The New York Times, cost savings and synergies of the combined company are worth $4 billion in present value, so the heavy $3.5 billion price tag to Sysco looks cheap. Sysco's stock rose 10% on Monday on the tasty M&A news.

4. Two Fed presidents hint at stimulus deductions
The Federal Reserve's in 7% heaven and it might be time to "taper." After the awesome November jobs report released Friday (203,000 new jobs and 7% unemployment), everyone's wondering if the economy is strong enough for the Fed to reduce stimulus and let the economy fly on its own two wings. Two Fed presidents spoke Monday, one in favor and one against, slowing down stimulus.
 
Quantitative easing = jobs desperation. Beginning in 2009, the Fed's been purchasing huge amounts of bonds in the markets, and the massive demand for debt has kept interest rates at record lows (aka its "QE" policy). These low interest rates were meant to encourage borrowing, risk-taking investment, and much-needed jobs growth... and they have. Thanks to QE, the unemployment rate is at a five-year low of 7% and the stocks are at record highs.
 
Are K-C & Jo-Jo singing the last song of the Fed's stimulus dance? Many investors have been concerned about the Fed slowing its stimulus support. Others think the Fed must slow stimulus to keep excessive risk taking under control. The market climb Monday is a sign that the prospect of a stimulus-free market is gaining traction on Wall Street, and investors are cozying up to the idea of a stimulus/QE-free market. #Middleschoollove

Today:
  • NFIB Small Biz Optimism Survey
 
MarketSnacks Fact of the Day:  Agbogbloshie, Ghana, is the most polluted place in the world occupied by humans -- with 40,000 people affected by lead from its electronic waste dump.
 
As first published on MarketSnacks.com.

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