In 1980, a McDonald's (MCD) test market in Tennessee sold out of brand-new Chicken McNuggets almost as fast as it could fry them... But the fast-food giant couldn't take the McNugget national. That's because chicken prices were far too volatile.

The Money Magic Behind 700 Million Pounds of Chicken  By Pete Carmasino, chief market strategist, Chaikin Analytics In 1980, a McDonald's (MCD) test market in Tennessee sold out of brand-new Chicken McNuggets almost as fast as it could fry them... But the fast-food giant couldn't take the McNugget national. That's because chicken prices were far too volatile. You see, the end of the Bretton Woods monetary system in 1971 severed the U.S. dollar's tie to gold prices. Commodities like grains soared as the market priced in the new paper standard. This set the stage for a decade of volatility in poultry prices. McDonald's couldn't scale up the McNugget unless it had a way to hedge against poultry price swings. But that's where the issue got complicated... With beef and grain, you can easily hedge risk using futures contracts – agreements that allow buyers to lock in prices today for delivery later. But these contracts don't make sense for poultry... First, chickens mature from egg to adult in a matter of months. Cows bear calves seasonally, and grow much more slowly... The beef industry takes a much longer time to respond to supply signals. So long-term hedges are more critical for beef producers than chicken producers. What's more, the poultry industry is consolidated. Just a few giants own the entire poultry operation in the U.S. That's in contrast to the beef industry, where processors tend to buy stock from independent farmers. The upshot of this is that compared with beef, chicken prices tend to be more stable. This makes poultry less attractive for speculators who might buy the other side of a contract. For these reasons, a robust futures market never took root around chicken. And ironically, this was the exact reason why McDonald's was unable to hedge poultry after prices soared through the '70s. Hedging the price of chicken was a complete nonstarter. So McDonald's was in a bind... If the company bought chicken at spot prices and the price of poultry rose, that would squeeze the company's margins... If it bought chicken at a fixed price and the price of poultry rose, that would squeeze the chicken producers' margins... And if the price of poultry rose and McDonald's passed it on to consumers, the company would have a customer revolt on its hands. In short, the McNugget was stuck in limbo... Recommended Links: 'Days From Now, a Desperate, Multi-TRILLION-Dollar White House Move to Save America Will Shock the Market' The man who has been paid $100,000 for one month of his financial research is sharing the biggest stock story of 2026... and history says it could 23X your money as it unfolds. Click here to learn more (includes a free recommendation). New Buy Alert From the 'Billionaire Whisperer' Sixty-year Wall Street veteran Marc Chaikin's former clients include billionaire investors like George Soros and Steve Cohen. He created an award-winning system that pinpointed Nvidia before it skyrocketed more than 50,000%. Now, as a direct result of Executive Order #14363 issued by the administration, the next-generation AI data centers are coming on line. More importantly, he says his No. 1 stock is leading the build-out – and you need to own it before September 29. Click here to get its name and ticker. A Different Way to Hedge Poultry Prices But then, a financial consultant named Ray Dalio came to the rescue... In the early 1980s, Dalio was advising a small book of clients – including McDonald's and a chicken supplier called Lane Processing. Dalio saw the McNugget problem from both sides of the negotiating table. He also saw the solution... You see, Dalio was a longtime student of the commodities trade. So he had a mind for both futures contracts and livestock. But more importantly, he had a methodology... He would reduce financial problems into simple "machines" – then invest based on these machines' predictable interactions. Dalio reasoned that a chicken is just another simple machine "consisting of a chick plus its feed," as he put it. In the simplest terms, this machine takes corn and soybeans... and turns them into meat. That meant the most volatile part of the chicken cash-flow equation was feed prices. Dalio used a mix of corn and soybean meal contracts to create a synthetic McNugget "future." And he showed Lane how to lock in its costs with this hedge. Thanks to Dalio's innovation, Lane could offer McDonald's chicken at a fixed price... and in 1983, the McNugget launched nationwide. And it's still a hit 40-plus years later. On average, McDonald's sells 700 million pounds of the chicken product a year. You'd think that the stock of a popular name like McDonald's would be doing great today. But the Power Gauge shows that this isn't the case.  Right now, our system gives MCD a "very bearish" rating... If you're unfamiliar, that means there's a good chance McDonald's will underperform the broad market in the next few months.  That's no surprise to me – McDonald's stock is down 22% this year. And it has lagged the S&P 500 Index since April. Folks, you may enjoy the occasional order of McNuggets. But I would stay far away from McDonald's stock for now.  Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral       Bearish Dow 30 +0.94% 8 14 8 S&P 500 +0.54% 81 238 178 NASDAQ +0.46% 24 47 28 Small Caps +0.11% 363 1111 421 Bonds -0.13%   Semiconductors and Semiconductor Equipment +2.67% 15 27 3 — According to the Chaikin Power Bar, Large Cap stocks are more Bearish than Small Cap stocks. Major indexes are mixed. *  *  *  * Sector Tracker Sector movement over the last 5 days Information Technology +3.52% Communication +1.94% Health Care +1.37% Industrials +0.40% Materials -0.38% Discretionary -0.42% Staples -0.89% Financial -1.83% Real Estate -2.28% Energy -3.53% Utilities -3.87% *  *  *  * Industry Focus Retail 6 38 31 Over the past 6 months, the Retail subsector (XRT) has underperformed the S&P 500 by 14.43%. Its Power Bar ratio which measures future potential is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #17 of 21 subsectors and has moved up 1 slots over the past week. Indicative Stocks AAP Advance Auto Parts, Inc. ACI Albertsons Companies, Inc. AZO AutoZone, Inc. *  *  *  * Top Movers Gainers ON +5.54% MCHP +5.36% GNRC +5.09% DELL +5.01% CVS +4.80% Losers GEN -6.29% CHTR -3.95% PANW -3.89% DVN -3.78% GDDY -3.64% *  *  *  * Earnings report Earnings Surprises No significant Earnings Surprises in the Russell 3000. *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. You're receiving this e-mail at reunisoft.cryptonews@blogger.com. For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized financial advice. © 2026 Chaikin Analytics, LLC. All rights reserved. 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