Since the start of 2024, McDonald’s (NYSE:MCD) (MCD) stock has fallen 7% while the S&P 500 has risen over 50%. More recently, since the start of hostilities with Iran, MCD is down nearly 20% while the broader market recovered initial losses and rallied to record highs. It’s not just fast food giant MCD trading poorly. Many of its competitors are at or near 52-week lows. The bullet points below show how far other fast food retailers are from their 52-week highs.Yum! Brands (NYSE:YUM): -10.3%Domino’s (NASDAQ:DPZ): -37.2%Chipotle (NYSE:CMG): -45.2%Wendy’s (NASDAQ:WEN): -46%Shake Shack (NYSE:SHAK): -55.4%Wingstop (NASDAQ:WING): –66.7%So the obvious question is: why are fast food companies trading so poorly? There are a few reasons. Leading the list is that consumers at the lower end of the wealth spectrum are tapped out due to higher inflation and spending less on eating out. Moreover, profit margins are under pressure as expenses rise due to minimum-wage hikes in many states and higher food costs.Outside of the more typical structural challenges are the new headwind being caused by GLP-1 weight loss drugs. JP Morgan estimates that one in eight US adults is taking a GLP-1 drug. Not only are those users reducing their caloric intake, but there is also growing evidence that GLP-1 users develop a preference for nutrient-rich, higher-protein foods.With GLP-1 uptake increasing rapidly, the fast-food companies that can modify their menus toward healthier, lower-calorie offerings may be the ones that outperform the industry.CPICPI was slightly hotter than expected, with both the headline and core figures coming in 0.1% higher than expected. There are a lot of factors that make this CPI print tough to sort out.For starters, monthly energy prices rose 3.8% in April, accounting for over 40% of the CPI increase. While we can account for energy inflation by looking at core CPI, it’s much more difficult to see how higher energy prices filter into the prices of other goods and services.Shelter prices, accounting for over 40% of CPI, rose 0.6%, the largest monthly increase in over two years. The problem with the figure is stark evidence from many real-time private market indexes that rent prices are flat to declining. The Tweet of the Day below shows the large divergence between CPI rent and the Apartment List national rent index.We led off today’s Commentary with a discussion of the headwinds facing fast food companies. The graph below indicates a major problem facing these restaurants. With yesterday’s higher-than-expected CPI, inflation is now rising faster than wage growth. Negative real wages will further limit consumers’ ability to eat out.Lastly, we share commentary from Nick Timiraos of the Wall Street Journal, who shares a positive take on the data:The optimistic story on inflation has been that the recent firming has been tariff-led (which would show up in goods) and therefore won’t be sustained as tariffs aren’t going to ratchet higher year after year.Tweet of the DayOriginal Post