Breakfast News: Déjà Brew
January 14, 2025
| Monday's Markets |
|---|
| S&P 500 5,836 (+0.16%) |
| Nasdaq 19,088 (-0.38%) |
| Dow 42,297 (+0.86%) |
| Bitcoin $93,728 (-0.62%) |
Source: Image created by JesterAI.
1. Starbucks Reverses Cafe Rules
Starbucks (SBUX +0.78%) has reintroduced a policy from six years ago preventing people from using the facilities in its North American cafes if they haven't bought anything, as it seeks to boost sales under CEO Brian Niccol's "Back to Starbucks" strategy.
- Implementing a fresh Coffeehouse Code of Conduct: The policy aims to prioritize paying customers: those who sit in the store will be offered one free refill of hot or iced coffee. Signs will make it clear the likes of harassment, outside alcohol, smoking or vaping, and panhandling are prohibited.
- "These updates are part of a broader set of changes we are making": The Dividend Investor rec's move is part of a broader raft of changes after global comparable store sales declined 7% in fiscal 2024. The stock is up a modest 1.7% over the past year, lagging the Nasdaq by almost 30%.
2. Oil Jumps on Supply Worries
Oil prices reached five-month highs, causing airline and cruise stocks to fall, with chatter around supply disruptions continuing to cause investors concern.
- At the highest level since August: West Texas Intermediate (WTI) gained almost 3% in Monday trading, with Brent moving above $80 per barrel, partly in response to the supply constraints with the imposition of fresh oil-related sanctions on Russia from the U.S. Colder-than-expected temperatures in Europe has been another factor pulling oil higher.
- Winners and losers: Fuel-sensitive stocks are feeling the move, with Delta Air Lines (DAL 2.31%) and United Airlines (UAL 3.62%) both falling, alongside cruise operator Carnival (CCL 0.68%). Rising oil prices is helping energy stocks, with ExxonMobil (XOM 1.57%) up almost 3% to start the week.
3. Ackman's "Modern-Day Berkshire Hathaway"
Pershing Square Capital Management is having a formal offer to buy Howard Hughes (HHH 4.36%) evaluated by the management team, in a bid that could help founder Bill Ackman copy the strategy Warren Buffett has employed at multi-Stock Advisor recommendation Berkshire Hathaway (BRK.B 0.61%).
- "With apologies to Mr. Buffett, HHH would become a modern-day Berkshire Hathaway": Ackman flagged how buying the community and retail property business would mirror what Buffett did with buying Berkshire as a textile company. The provision of stable cash flow then provides funds to fuel dealmaking.
- Same dream, different sizes: Howard Hughes stock jumped almost 10% yesterday, although the bid at $85 a share is still at a premium to the closing price of $78.62. Investors should note that while Berkshire has a market cap of almost $1 trillion, Howard Hughes trades at just $4 billion.
4. Hot Property
Homebuilder KB Homes (KBH 2.51%) posted strong full-year results, flagging up continued demand for new housing in the domestic market.
- "Buyers continued to demonstrate a desire for homeownership": Despite the average 30-year fixed mortgage being at 6.72% last week, KB Homes noted the past year saw housing market conditions improve, despite the interest rate headwinds. Revenue at the company grew by 19% versus last year.
- A leading indicator for the economy: Investors will be looking to Housing Starts and Building Permits data due out on Friday for more information on the state of the property market.
5. Foolish Fun
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