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Do consumers care about the debt ceiling?

October 15, 2013: 12:43 PM ET
The debt ceiling drama is intense .... but not intense enough to make people skip their caffeine fix. Starbucks and Dunkin' Brands are near all-time highs.

The debt ceiling drama is intense. But people need their caffeine fix. Starbucks and Dunkin' Brands are at all-time highs.

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.

Shares of Starbucks (SBUX), Dunkin' Brands (DNKN), Whole Foods Market (WFM), Chipotle Mexican Grill (CMG) and wine/beer distributor Constellation Brands (STZ) hit all-time highs Monday.

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.

Related: More on America's debt crisis

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.

  • Is Howard Schultz of Starbucks the best CEO ever?

    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.

    With all due respect to the late Steve Jobs, Henry Ford, Sam Walton and Ray Kroc, Starbucks (SBUX) CEO Howard Schultz may be the best CEO ever.

    Sure, the former heads of Apple (AAPL), Ford (F), MORE

    - Sep 12, 2013 11:16 AM ET
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    Although these numbers simply met analysts' forecasts, many investors were clearly impressed to see the company MORE

    - Jan 25, 2013 11:59 AM ET
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    Chipotle was one of four stocks that Einhorn discussed during his presentation at the Value Investing Congress in New York. He also spelled out a case for why investors should buy General Motors (GM) and health insurer Cigna (CI). MORE

    - Oct 2, 2012 12:56 PM ET
  • Green Mountain surges. But why?

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    That's dangerous. Many companies have been burned by boosting inventory MORE

    - Aug 2, 2012 10:41 AM ET
  • Starbucks cools off

    Starbucks is cooling off ... for now.

    The Seattle-based coffee chain trimmed its earnings forecast by about 2 cents a share Tuesday, but there's no need to panic. It's not like Starbucks is going to report a loss.

    Last year's high coffee prices, Europe's nagging debt problems and the company's baking plans will cut into Starbucks' bottom line this year, said chief financial officer Troy Alstead, at the annual stock conference of MORE

    - Jun 12, 2012 3:39 PM ET
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    JeffReevesIP: I just don't get the $SBUX bakery move. Yes, some Starbucks coffee drinkers may buy a pastry too. But is that the extent of the "plan?"

    JeffReevesIP: Bigger issue: I ADORE coffee but more & more don't - esp younger energy drink crowd. Yes $SBUX must rethink "cafe" menu MORE

    - Jun 5, 2012 2:00 PM ET
  • Stupid Stock Move of the Day! No Panera sell-off?

    #StupidStock Move of the Day! Was tempted to go $SBUX but yesterday's rally equally dumb. Still, $PNRA flat? Shouldn't Panera be nervous?— Paul R. La Monica (@LaMonicaBuzz) June 05, 2012

    Starbucks (SBUX) is getting into the bread business. While the $100 million purchase of La Boulange Bakery in San Francisco is a relatively small deal for the king of coffee, I am a little surprised Panera (PNRA) investors aren't more worried MORE

    - Jun 5, 2012 1:02 PM ET
  • Starbucks: 'We are bakers too'

    Starbucks is getting into the bread business.

    The Seattle-based coffee chain announced plans Monday to buy San Francisco-based Bay Bread and its La Boulange bakery brand for $100 million.

    "This is an investment in our core business," said Howard Schultz, Starbucks chief executive, in a conference call with financial analysts. "After more than 40 years, we will be able to say that we are bakers too."

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    - Jun 4, 2012 5:21 PM ET
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