The Commoditization of Starbucks

Given the sloppy market today it is easy to cherrypick the mild weakness in any individual stock. 

But Starbucks its worth noting for a few reasons. First and foremost, the important consumer name has been glaringly weak for quarters on end now, along with DIS HD LOW NKE UA, just to name a few.

In addition, coffee has been steadily improve and rallying further today. To reiterate a prior thesis, even if SBUX has locked in coffee prices for the near future, the market still may sell down SBUX in sympathy with rising coffee prices, as markets have a way of doing even if it is to the great dismay of the fundamentally-driven players.

Finally, SBUX continue to tease a multi-year breakdown of well-defined support in this $52/$53. 

As often happens, the next earnings report likely will tip the scales. SBUX reports on November 3rd, and if coffee has truly bottomed I suspect it will be just another headwind even if they do beat the number in this particular quarter.

More on the broad market and specific ideas in my usual Midday Video for Members.