Watch the restaurant sector closely today. After promoting the $5.00 value meal as a temporary marketing strategy, McDonald’s (MCD) said that it would extend the offering.
The customer’s response to the value meal is net positive, as traffic to restaurants increased. When McDonald’s posts quarterly results on July 29, it will update shareholders on the extent of the successful offering. For example, diners could order a McChicken or McDouble, four-piece chicken nuggets, fries, and a drink. The cost is significantly higher when buying them separately.
In the raw materials market, copper touched a three-month low on Monday. Prices are responding to a substantial slowdown in China. Last week, China held its Plenum. This followed with a surprise 10 bps interest rate cut while excluding any short-term stimulus measures. China is cutting rates before the U.S. Fed does, since its housing sector continues to spiral lower. Consumer spending continues to weaken.
In response to the rate cut, China tech stocks like Bilibli (BILI), Alibaba (BABA), Tencent (TCEHY), and JD (JD) rallied. Traders may soon take profits on the potentially short-lived bounce.
