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.
There's a new organic grocery store on Wall Street. And business is booming.
Shares of Sprouts Farmers Market (SFM) soared Thursday in the natural foods company's initial public offering.
Sprouts priced its offering of 18.5 million shares at $18. The stock more than doubled on its first day of trading to end at $40.11 a share.
The company said Wednesday that it expects to raise nearly $300 million from the sale.
Phoenix-based Sprouts bills MOREBen Rooney - Aug 1, 2013 1:21 PM ET
Safeway's (SWY) stock looks unsafe at any speed today. It's down more than 15% after the company reported quarterly results.
Supermarkets are notoriously challenging businesses. Take Whole Foods (WFM) out of the equation and nearly every grocery store struggles to generate healthy profit margins. Competition is tight within the industry, and then there's Wal-Mart (WMT). The big box retailer wants to eat every supermarket's lunch, dinner and breakfast.
Safeway's sales dipped during the latest quarter MOREMaureen Farrell - Apr 25, 2013 2:38 PM ET
Shares of Whole Foods Market tumbled Thursday after the organic grocery chain narrowed its outlook for sales this year.
Whole Foods (WFM) shares fell 9.4% to end the day at $87.50.
Late Wednesday, Whole Foods said it expects sales at stores open at least one year to rise between 6.6% and 8% in fiscal year 2013. It had previously forecast same-store-sales growth, a key measure of retail demand, to increase between 6.5% MOREBen Rooney - Feb 14, 2013 4:16 PM ET
The Fresh Market (TFM) stock plunged to a six-month low Wednesday after the specialty grocer missed earnings expectations and announced that its CFO will step down next month.
Shares of Greensboro, NC-based company tumbled as much as 19% to $49 a share -- the lowest level since late May.
Fresh Market's third-quarter profit rose 19% to $10.9 million, or 23 cents per share, but that was short of the 26 cents per MOREHibah Yousuf - Nov 28, 2012 12:43 PM ET
Whole Foods (WFM) warned shareholders that it will take a one-time charge for losses related to Hurricane Sandy. Investors raced out of the stock, causing it to drop more than 5% Thursday.
The Sandy-related worries forced investors to ignore an otherwise solid quarter in which sales spiked 24%. Sales at stores open for more than one year jumped 8.5%, and profits rose 49%. Whole Foods CEO John Mackey said the MOREMaureen Farrell - Nov 8, 2012 1:51 PM 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
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