Trader Talk

Winter of discontent: Weather becomes economy's free pass

File photo of planes being de-iced at New York's LaGuardia.
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For the past three weeks, Art Cashin has been calling the weather the "get out of jail free" card for the economy. And it happened again this morning. Stocks were little changed on very disappointing January's housing starts—a decline of 16 percent—the biggest drop in three years. Building permits were also fairly ugly.

The bottom line: Wall Street continues to believe that the weather is the primary reason for the slowdown, and this will change soon.

They're getting some support from retailers, who are almost uniformly blaming the weather for their disappointing sales or guidance. This morning, Lumber Liquidators became the fifth company in less than 24 hours to blame the weather on poor sales. The were joined by Mattress Firm Holding, Group One Auto, La-Z Boy, and Panera.

How much is weather hurting? Panera really got granular: they estimate severe weather impacted transactions by 250 to 300 basis points (2.5 to 3 percentage points) since the quarter began in January.

Group 1 Automotive said, "We have lost days in areas of the country that stretch from Houston to New Orleans to Atlanta that are normally safe from winter weather and our stores in areas like Boston, New Jersey, New York, New Hampshire, Oklahoma, and Kansas have seen significant closures that far exceed normal winter conditions."

Regardless: this excuse is only going to last for a short time. Already, the weather is breaking in New York: the region is expected to be above freezing every day for the next week.

We'll see what the Federal Reserve has to say about this "polar vortex" when the Fed minutes are released today at 2 PM.


Retail & the lingering weather effect

1) You'd think home building stocks would be in some trouble on all these concerns, but that is not the case. The Homebuilders ETF is very close to its 2013 highs, which it hit in December. This is a reminder that interest rates are still low, and there is still plenty of demand out there.

2) Geopolitical risk is back, yet the market shrugs. Greg Valliere at Potomac Research has noted that, with the tragedy in Syria continuing to unfold, and with dozens dead in the Ukraine, geopolitical risk is again emerging as an issue.

Throw in continuing unrest in Thailand, and the arrest of opposition leaders in Venezuela, and it certainly does look like parts of the world are looking shakier. And yet, the market is shrugging this off, just like it is shrugging off poor January economic data.

3) Jeweler Zale's soars more than 40 percent following news it will be purchased by Kay Jewelers parent Signet Jewelers for $21 per share. That represents a 41 percent premium to ZLC's closing price Tuesday.

By CNBC's Bob Pisani