As vaccines continue to roll out, case counts drop, and restrictions like capacity requirements are taken off the table, people are returning to bars and restaurants. In the commentary section of today’s ISM Manufacturing report, the highlighted comment from the Food, Beverage, and Tobacco Products industry noted that “Business is picking up as restaurants open.”  As shown below, data from OpenTable on the seven-day moving average in the percent change in seated US diners now versus 2019 backs that up.  The series showed a steep drop in mid-April that has since recovered. Currently, seated diners are roughly 19% below 2019 levels and are re-approaching the post-pandemic high from April 10th which was just over 2 percentage points above current levels. One caveat with these numbers is that restaurants are increasingly requiring diners to make reservations, so while the number of diners may not be quite as strong as it looks, the trend higher is definitely real.

While the general business environment has improved for food, beverage, restaurants, and other related industries, the stocks of these companies have been a bit mixed as we noted in our earlier B.I.G. Tips report.  For example, the Food Products industry has seen a breakout over the past couple of months while the Hotels, Restaurants, & Leisure industry has been trading around the top of its long-term uptrend. Meanwhile, the Food & Staples Retailing and the Beverage industries have been more or less treading water.

In the charts below, we show some interesting charts of the individual S&P 500 stocks within these industries. While the broader industry has been around the top of its uptrend channel, some restaurant stocks such as Darden (DRI), Chipotle Mexican Grill (CMG), and Starbucks (SBUX) have likewise been in mostly steady uptrends over the past year but stalled out more recently while holding support at their 50-DMAs.  While the longer-term trends are not the same, other food and beverage-related stocks like Brown-Forman (BF/B) and Conagra Brands (CAG) have also been bouncing off of support around their 50 or 200-DMAs.  While more elevated above their moving averages, other stocks that have surged recently, and as a result, have broken out include Hershey (HSY) and Molson Coors (TAP).  Meanwhile, PepsiCo (PEP) and Constellation Brands (STZ) are also working towards breakouts of their own; STZ at the moment is the closer of the two in doing so while PEP is looking to complete a rough cup and handle pattern that has developed over the past few months. Click here to view Bespoke’s premium membership options for our best research available.

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