Friday, July 22, 2016

As Goes #Starbucks So Goes America

News
Howard Schultz, the CEO of Starbucks, cited social and political turmoil as factors pressuring the consumer and operating earnings. Schultz's observations will likely include economic turmoil in the form of liquidation in 2017. The old Wall Street saying as goes General Motors so goes America, a manufacturing heavy relationship that lied a long time ago with the rise of socialism - excessive taxation, regulations, and labor restrictions, has likely been replaced by as goes the service-producing sector, i.e. Starbucks so goes America (see chart).

Making America great again won't happen until taxes and regulations are reduced and labor restrictions imposed by unions are loosened. Neither a likely to happen under a Trump or Clinton Presidency.

Chart


Headline: Starbucks' Schultz: Social, political turmoil is putting pressure on consumer

Starbucks (SBUX) CEO Howard Schultz said Friday that social and political turmoil in the United States and beyond is creating a challenging operating environment for the world's largest coffee chain.

Still, he said he could not say those issues were causing Americans to make fewer stops at their local Starbucks.

Schultz first addressed the issue during the company's earnings conference call on Thursday, citing anxiety stemming from the U.S. presidential campaign, domestic racial tensions and terror attacks.


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