Winter weather blasted the housing industry in January with housing starts falling 16% for the month to a seasonally adjusted annual rate of 880,000, well below the 950,000 economists expected. Building permits, which are considered an indicator of future housing market activity, also declined far more than expected to 937,000, from December’s upwardly revised rate of 991,000. Producer prices for the month of January, however, came in as expected up 0.2% for the month.
The White House slammed the Congressional Budget Office for a new report on the impact of the President’s proposed increase in the federal minimum wage to $10.10 an hour from the current rate of $7.25. The CBO report found that the increase would lift an estimated 900,000 Americans out of poverty, but it also found the increased cost to business could lead to a loss of 500,000 jobs by late 2016.
The Chairman of the White House Council of Economic Advisers said in a blog post, “CBO’s estimates of the impact of raising the minimum wage on employment does not reflect the current consensus view of economists.”
Among the stocks to watch today: General Motors (GM). General Motors is following Ford's (F) lead when it comes to aluminum-body trucks, according to the Wall Street Journal. GM is reportedly accelerating efforts to produce a mostly-aluminum pickup by late 2018. Ford announced last month it will produce a mostly-aluminum F-150 truck - a big change from the steel bodies that have been the standard for the best-selling truck. The moves by Ford and GM are motivated by tougher fuel efficiency standards.
Panera Bread (PNRA) beat earnings estimates by $0.02 a share while revenue grew 16%, though slightly estimates slightly. The bad news: Panera lowered its profit forecast for the current quarter to well below what analysts were looking for. The company blamed the bad weather for fewer customers coming to its cafes.
Herbalife (HLF) beat Wall Street earnings estimates for the twentieth consecutive quarter. The latest report came in $0.03 a share ahead of expectations. Revenue grew 20%, also ahead of estimates. Herbalife, which has been accused of being an pyramid scheme by billionaire hedge fund manager Bill Ackman, also raised its earnings guidance for 2014 above analysts’ expectations.
Garmin (GRMN) beat earnings estimates by $0.14, while revenue fell 1% from the previous year but beat estimates. The better-than-expected earnings were aided by strong demand for the company’s aviation and fitness products.
Tesla (TSLA) was in the news again. The company’s shares rose close to 3% yesterday after reports that CEO Elon Musk met with Apple last spring. Tesla shares could be active again today as investors eagerly await the company's earnings report after the bell today. Tesla is expected to post a profit of $0.21 a share while revenue is expected to grow 121% year over year.
And Zale (ZLC) surged as much as 40% in pre-market trading after rival Signet (SIG) said it would buy the jeweler for about $690 million. Signet (SIG) shares also surged as much as 13% in early trading on the news. Signet will pay $21 for each Zale share which is a premium of 41% over Zale's closing price yesterday.
Morning coffee drinkers, brace yourselves. Coffee prices are on the rise. Coffee futures saw the biggest jump in a decade yesterday, up 9-percent. For the year coffee futures are up 38-percent. Hot, dry weather in the world's largest coffee producer, Brazil, is leading to concerns about the coffee crop and driving prices up.
In our poll today: how much would you pay for a cup of coffee?
Cast your vote on the right side of the page and post your comments below as well.