The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
The government's in shutdown mode? The U.S. may default on its debt? Yawn. Get me another almond milk pumpkin spice latte and spelt blueberry muffin please! And I think I'll go grab some carnitas tacos and chips with guacamole for lunch.
For all the talk about how catastrophic it will be for the markets and economy if Congress doesn't raise the debt ceiling, consumers and investors seem to be taking it in stride. Just take a look at the stocks of several well-known brand name companies.
Yup. The sky may be falling in Washington. But Wall Street seems to think that consumers will continue to eat, drink and be merry. (Hopefully we'll avoid that whole biblical prophecy about dying tomorrow.)
What gives? Are traders making the erroneous assumption that Americans are still willing to shell out their hard-earned cash for somewhat pricey beverages and food? Perhaps. But it may simply be the case that a $5 cup of coffee, $7 steak burrito bowl or $20 bottle of Pinot Noir are still affordable luxuries, if you will.
However, not all companies with a huge consumer presence are doing well.
Shares of Whirlpool (WHR) tumbled 6.5% Monday after an analyst suggested in a report that demand for household appliances might be slowing. That sort of makes sense.
Consumers may not be so terrified about the possibility of a debt default that they are going to stop getting their daily caffeine fix. But they may be nervous enough to hold off on buying a new $900 Maytag washer from Home Depot (HD) or Lowe's (LOW).
Builder stocks have taken a dive this month as well. Lennar (LEN), Pulte Homes (PHM) and DR Horton (DHI) have all tumbled -- along with the S&P Homebuilder ETF (XHB) -- while the broader market has shrugged off the debt drama.
Again, this makes sense. Buying a six-pack of Corona -- or even a six-pack of organic wheat beer at Whole Foods -- is not a huge financial commitment, even with the U.S. inching close to default. But purchasing a new house? That's a little different.
Still, you can't help but wonder if investors in some consumer stocks are setting themselves up to be disappointed by glibly dismissing the debt ceiling and shutdown concerns.
After all, Starbucks CEO Howard Schultz has been pressing Washington to act sooner rather than later. He wrote in a recent open letter on the company's website that "the current stalemate ... threatens our nation" and that the government needs to "pay our debts on time to avoid another financial crisis."
Given how well his company's stock is doing, Schultz could be forgiven for not really caring one iota about the silliness in DC. But he's a good citizen -- yet another reason why I recently declared him to be the best CEO ever.
And maybe he's on to something. Wall Street may be misjudging the level of consumer apathy. Hopefully, we'll never have to find out if investors got this wrong.
Noodles & Co. must be carbo-loading. Shares of the casual restaurant chain have been on quite the run since making their public debut last week.
The stock more than doubled on Friday -- its first trading day -- and is up another 25% Tuesday thanks to kind words from CNBC's Jim Cramer on his Monday evening show. The Mad Money host said that Noodles & Co. (NDLS), which offers dishes ranging from MOREHibah Yousuf - Jul 2, 2013 3:06 PM ET
Hedge fund managers might like Chipotle's burritos, but some are betting against the company's stock.
Last October, Greenlight Capital's David Einhorn revealed a bet against Chipotle Mexican Grill (CMG). On Wednesday, bond fund manager Jeffrey Gundlach of investment firm DoubeLine Capital joined him in talking down the fast food chain.
"I like the products," Gundlach admitted. Yet, he said, "A gourmet burrito is an oxymoron. All you need to compete with its MOREMaureen Farrell - May 9, 2013 12:16 AM ET
Investing 101: If a stock is priced for perfection, bad news is going to cause a rush for the exits. That definitely was happening with fast food giant Yum! Brands (YUM) on Friday.
Even though the company reaffirmed its outlook for 2013, investors were spooked by an alarming 4% decline in same-store sales in China. Yum has focused heavily on China, particularly through its KFC franchise.
Shares fell nearly 10%. An overreaction? MOREPaul R. La Monica - Nov 30, 2012 12:32 PM ET
Momentum is fickle. Investors in Google (GOOG) and Chipotle (CMG) both learned that the hard way after each company reported results that missed forecasts on Thursday.
Now investors are trying to figure out what other Wall Street darlings could be ripe for a fall. Traders on StockTwits zeroed in on Priceline (PCLN). And shares of the online travel leader were down more than 4% Friday following a nearly 3% drop Thursday. MOREPaul R. La Monica - Oct 19, 2012 11:59 AM ET
It looks like David Einhorn's latest prediction may be coming true.
Shares of Chipotle Mexican Grill (CMG), which Einhorn recently recommended shorting, got slammed after the casual restaurant chain reported earnings that fell short of forecasts. And, although revenue was roughly in line with estimates, investors were disappointed.
Chipotle's stock sank more than 10% after-hours Thursday. On Friday, shares fell more than 15% before gaining back some ground.
I fortuitously bumped into Einhorn MOREMaureen Farrell - Oct 19, 2012 10:23 AM ET
Talk about your organic growth! Shares of grocer Whole Foods Market (WFM) surged nearly 10% after the company reported results late Wednesday that were far better than estimates.
The rally has to be considered vindication for anyone who stuck with the stock after it got pummeled Friday following a disappointing report from Chipotle Mexican Grill (CMG). Shares fell 7%.
That sell-off was silly. I even called the dip in Whole Foods on MOREPaul R. La Monica - Jul 26, 2012 12:59 PM ET
Shares of Chipotle Mexican Grill plunged more than 20% Friday after the company reported weaker-than-expected sales growth, even as profits rose in the second quarter.
Chipotle (CMG) stock fell $92.28, or 23%, to $311.98 a share. Shares of McDonald's (MCD), Wendys (WEN) and Taco Bell-owner Yum brands (YUM) were down between 1% and 2%.
The sell-off came after Chipotle said late Thursday that same-store sales, a key measure of demand, grew only MOREBen Rooney - Jul 20, 2012 12:55 PM ET
#StupidStock Move of the Day! Chipotle a huge fave of Mrs. Buzz & @CNNMoney video crew. But down 4.5% today on Q2 worries. An overreaction?— Paul R. La Monica (@LaMonicaBuzz) June 27, 2012
My wife raves about Chipotle (CMG). I'm always seeing the 20-somethings in my office grabbing burrito bowls from there as well. I amazingly enough have never been to one despite loving Mexican food. But it seems like MOREPaul R. La Monica - Jun 27, 2012 3:07 PM ET
Will the third trip to the public markets be the charm for Burger King's investors?
Burger King (BKW) started trading on the New York Stock Exchange Wednesday, and the home of the Whopper quickly popped nearly 7% from its opening price of $14.50.
In early April, the world's second largest hamburger fast food chain announced a new healthier menu replete with salads, wraps and smoothies. (The new bacon sundae is a glaring MOREMaureen Farrell - Jun 20, 2012 10:54 AM ET
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