Minimum wage boost for 4 million Germans

Two-thirds of the German workers expected to benefit from the minimum wage are women.

LONDON (CNNMoney)

Starting January 1, 2015, employers across all sectors of Europe's biggest economy will have to pay at least 8.50 euros per hour.

That's worth about $11.50 at current exchange rates, but would feel more like $15 in the United States because of the lower cost of living.

The federal minimum wage in the U.S. stands at $7.25, but President Obama supports an increase to $10.10.

Some U.S. states and cities have already gone further.

Seattle is phasing in a rate of $15, and Massachusetts has passed legislation to gradually raise its minimum to $11 by 2017.

Most wages in Germany are set in negotiations between companies and unions.

Assuming the law clears its final legal hurdle -- approval by the upper house of parliament -- Germany will become the 22nd European Union member state to introduce a statutory minimum wage.

Related: Swiss voters reject $25 minimum wage

The initial rate of 8.50 euros corresponds to about 51% of the median wage, meaning Germany will pay its lowest earners more than Spain or the U.K., but less than France or Belgium.

The German government estimates that about two-thirds of the 3.7 million workers who will benefit directly are women.

Germany is one of the most productive leading economies, giving its exporters a powerful edge in world markets. That strength helped shield Germany from the worst of the eurozone crisis, supporting growth and jobs.

Related: Ikea lifting minimum wage to nearly $11 an hour

Some observers expect the minimum wage will have little impact on business in the short term, because the economy is performing well and employers have had time to adjust during months of public debate.

"It is still a significant political decision, however, as it signifies a shift away from the liberalizing labor market reforms of 2002-05 and could alter the structure of Germany's wage dynamics in the longer term," noted Evelyn Herrmann, European economist at BNP Paribas.

Business lobby groups have warned that the measure -- along with other planned changes to employment law and pensions -- could dilute the benefit of economic reforms enacted a decade ago and burden business with bureaucracy.

Ulrich Grillo, president of the German industry federation, said last month that the minimum wage law needed to allow some exemptions.

"We must see to it that our social system remains affordable," he said.

First Published: July 3, 2014: 9:45 AM ET

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Time for fireworks: Dow tops 17,000!

NEW YORK (CNNMoney)

Many see it as just a psychological threshold, but it's a level U.S. stocks have never seen before and it comes a mere six months after the Dow crossed 16,000.

All three major indexes are up in Thursday trading, with the Dow Jones Industrial Average at an all-time high of 17,054. The S&P 500 is also at a record level, hitting 1,982 for the first time. The teach heavy Nasdaq Composite is up about 0.25%.

U.S. markets will close early today ahead of the July 4th holiday weekend. So far Hurricane Arthur does not seem to be impacting stocks.

Jobs Bonanza: A strong June job reports drove the optimism in the stock market. The U.S. economy added 288,000 jobs last month, and the unemployment rate fell to 6.1%, down from 6.3% in May. That was much better than economists or Wall Street expected.

Related: What you need to know about the jobs numbers

Bonds react to jobs report: The bond market is moving to sell after the jobs report and Federal Reserve chair Janet Yellen's comments yesterday that the central bank will not use interest rates to pop any potential bubbles in the markets. Bond yields are up to 2.67%, a sign of the improving economy.

Gold investors are similarly skittish, with the precious metal's price dropping almost an entire percentage point to $1,318 an ounce.

Stock movers -- Goldman Sachs, Exepdia: There isn't much deal news or analyst stock upgrades or downgrades before the long weekend, so most stocks are moving modestly. Goldman Sachs (GS) is up 1.6% in early trading, and online travel booking company Expedia (EXPE) is up over 1.5%.

Intel (INTC, Tech30) shares are up 20% so far this year, making it the second best performing stock in the Dow.

It's also fun to note that Nathan's Famous (NATH)hot dogs, sponsor of the big eating contest on July 4 on Coney Island, is a publicly traded company. The stock is down slightly in trading today, but it's up over 7% so far this year and has truly been a "top dog" stock in recent years.

Overseas Markets: European markets are were higher in afternoon trading, with the FTSE 100 up more than 0.6%. Asian markets were mixed, and Australia's stock market jumped a nice 0.7%.

First Published: July 3, 2014: 10:01 AM ET

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Google bans porn ads

Google has banned porn and sexual imagery from appearing in its AdWords advertisements.

NEW YORK (CNNMoney)

In an email sent last month to porn site advertisers on Google's AdWords network, the company said it will no longer allow ads that contain sexual imagery, "including, but not limited to, hardcore pornography; graphic sexual acts including sex acts such as masturbation; genital, anal, and oral sexual activity."

The new rules went into effect this week.

The e-mail, which was first spotted by Morality in Media, came several months after Google (GOOGL, Tech30) updated its porn ads policy. In a blog post in March, Google said it made the decision to no longer allow porn in ads "as an effort to continually improve users' experiences with AdWords."

Google still allows the "promotion of pornography," according to its AdWords policy. But the ads can't contain sexually explicit content.

In addition to banning sexual imagery, AdWords advertisers are forbidden from marketing prostitution services, erotic massages and "intimate companionship services." Google does, however, allow the advertisement of strip clubs, lap dancing, and adult and sexual dating sites.

Related: Inside the underground sex economy

The porn advertising ban comes a year after Google decided to remove blogs from its Blogger network that contained advertisements for online porn sites.

First Published: July 3, 2014: 10:23 AM ET

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How to buy luxury clothes without losing your shirt

NEW YORK (CNNMoney)

Consignment and resale shopping is a growing business, made even easier by new technology.

"Everyone wants a deal," said Julie Wainwright, founder of The RealReal, an online consignment shop specializing in luxury goods.

The RealReal has a new app that's like a Kelley Blue Book-type service for high-end products. Customers can shop from thousands of items, and can also use it to find the market value for a designer piece lurking in the back of their closet.

Brands like Cartier, Chanel and David Yurman hold their value the longest, according to The RealReal, which sees David Yurman products snapped up for nearly half the retail price, and Hermès accessories for up to 30% off retail.

The RealReal has several warehouses across the country, including this one in San Francisco.

While the retail sector took a beating in the recession and has only just started to recover, the resale industry has grown in recent years.

New stores have opened to keep up with the demand. According to the NARTS, a resale professionals association, enough shops have opened their doors to grow the industry by 7% over the last two years. There are about 18,000 used merchandise stores in the U.S., with a combined annual revenue of about $12 billion, according to First Research, a market analysis company.

Related: Why these sunglasses cost $150

Overall retail sales only increased by 3.7% in 2013, according to the National Retail Federation. That's far below the potential for the resale industry, say reports from NARTS and eMarketer.

Based on that data, online consignment shop thredUP said the resale sector will grow 16.4% through 2016. It's found that luxury brands like Theory and Diane von Furstenburg were the best to buy secondhand, raking in the largest number of dollars saved per item and the highest discount.

Luxury brands proved to be so popular on thredUp that the company launched "X Collection" earlier this year, which offers designer pieces exclusively. Recent highlights included a Diane Von Furstenberg silk dress for about $200 (retail price $550) and a Gucci handbag for a little less than $400, a huge markdown from its retail price of $985.

Related: Why rich families are losing money

For those looking to sell luxury items, both TheRealReal and thredUp offer payouts between 60% and 80% of the sale price.

"This means people can monetize what they have in their home," said Wainwright. Though secondhand selling might sound a little like eBay (EBAY, Tech30), there's a difference.

"[eBay] provides a valuable way to connect buyers and sellers, but they can't authenticate, and they can't ensure consumers are getting a good value," she said.

The women behind the Women's Closet Exchange in St. Louis, Mo., recently parlayed their several decades of experience into a reality show called "Resale Royalty" on the Style Network. The exposure convinced the owners to launch a website last year, which has been "wildly successful," according to Laura Maurice, who owns the business with her mom and sister.

Laura Maurice, Sue McCarthy and Diana Ford make up the team behind designer resale shop Women's Closet Exchange in St. Louis, Mo.

Brands in hot demand are Hermès, Chanel and Louis Vuitton. The company buys from 15,000 different suppliers, and sometimes just from people's closets. They mine everyone from "a soccer mom who's got some fabulous Lululemons," to "a celebrity stylist in Soho." The good deals for her turn into great deals for customers, and keeps luxury brands accessible.

"We still sell $2,000 and $3,000 handbags even though they're gently used," Maurice said. She goes on buying trips to Los Angeles and New York, and "Resale Royalty" is currently being shopped around to other networks.

"We've always thought we were bigger than just a resale shop," she said.

First Published: July 3, 2014: 6:22 AM ET

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BMW i8 - Lots of geeky fun

Santa Monica, Calif. (CNNMoney)

Long and low, the i8 has a recessed air scoop carved out of its hood and, on the sides, twin pairs of fins meet at right angles to create a air channels. This car looks like it's made from pieces that aren't quite touching, held in place by some invisible force.

As you'd expect from its appearance, the i8 is an advanced plug-in car. It's got an electric motor with a two-speed transmission driving its front wheels. It also has a small three-cylinder engine with another electric motor attached to it -- and a six-speed transmission -- powering its back wheels.

That three-cylinder engine is tuned up and turbocharged to put out 228 horsepower all by itself. Add in the electric motors and the i8 can crank out 357 horsepower total.

Related: Porsche 918 - The future of fast

With a battery pack riding up the center of the car, the small engine in back and an electric motor in front, the i8 is roughly perfectly balanced. It also has BMW's traditionally light but sensitive steering and nicely responsive brakes. With its engine sound "enhanced" through the stereo (pre-recorded engine noises play in sync with what the actual engine is doing) the driving experience has the expected BMW thrill.

Several different driving modes are available which allow the driver to shift the emphasis between one extreme and the other. Official fuel economy numbers aren't available yet but BMW promises efficiency similar to a compact car. Driven gently, the i8 can go up to 22 miles on electricity alone after a full charge, which takes 90 minutes.

Before I'd driven the i8, its $136,000 base price sounded exorbitant. It's not. Both the exterior and interior are not just striking but beautiful. Driving the i8 through tightly twisting mountain roads along the southern California coast provided about as much fun as I could have expected from any car. The i8 felt fast, light enough, considering it's loaded with batteries, and easy to drive quickly.

Related: Best cars for the super rich

I scooted from turn to turn with that nice engine sound purring in my ears, scooting smoothly through curve after curve, the steering wheel providing gentle, reassuring feedback.

I thought about the Cadillac ELR, another plug-in hybrid I'd driven in the same place a few months before. It wasn't a horrible car but, at half the price, the ELR didn't seem worth the money. I wondered why. The answer is that vague luxury stuff called "refinement."

The ELR was like a high quality tuxedo T-shirt, its refinement ironed on over the fabric of what was a very good mass-market plug-in car, the Chevrolet Volt. The ELR felt and sounded harsh compared to the i8's smooth and gratifying performance. The i8 never felt strained or struggling. Like a proper leading man, it was always at ease while the ELR, doing the same job not quite as well, felt like it was getting sweat stains around its armpits.

Offering more than just a glimpse of the future, the i8 provides genuine automotive fulfillment in the very real and demanding present. It just looks like science fiction.

First Published: July 3, 2014: 7:19 AM ET

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Are you a better investor than a 13-year-old?

Sixth-grader Marcelo Bongalon gets schooled by an NYSE floor trader.

NEW YORK (CNNMoney)

The sixth grader from San Francisco isn't exactly a veteran deal maker. Rather, he was one of four winners of the Securities Industry and Financial Markets Association's (SIFMA) Investwrite contest who were invited to visit the New York Stock Exchange last week to present their investment ideas and chum it up with the old timers on the trading floor.

Hailing from middle and high schools throughout the country, the students had a simple, yet arduous assignment: Design a 10-year imaginary investment portfolio using a mix of stocks, bonds and mutual funds.

Related: 4 signs the stock market is overheating

Here's how the future masters of the universe put their money to work.

Marcelo Bongalon, 6th grade, San Francisco, CA: Prior to the Investwrite competition, Marcelo knew little about investing. When his teacher asked him about the market, he could only think of Warren Buffett, and he admits that he used to pronounce the legendary investor's last name like the type of dining setup in which eaters serve themselves.

Since entering the competition, Marcelo's stock picking prowess began to emerge.

After initially analyzing WalMart, (WMT) Marcelo began to look into Costco (COST)when his mom bought him a pizza and root beer from the retail giant. He liked what he saw, and chose to buy the company based on its international expansion, comparatively higher wages, and discounted gasoline sales.

"I decided to buy Costco in honor of that delicious meal," joked Marcelo.

It's too early to tell if his investment in Costco will pay off. The stock is down around 3% this year.

Related: 5 worst stocks of 2014

Mac Bank, 12th grade, Bloomfield Hills, MI: Utilities are usually considered a defensive sector, favored by investors seeking safety and healthy dividend payments. But Mac sees a growth opportunity. The recently-graduated senior is betting big on water, specifically the American Water Works Company (AWK).

"Without water a society will crash and burn, figuratively and literally," he wrote.

He chose American Water Works because of the company's government contracts to build and maintain water facilities, as well as its investment in environmentally-friendly wastewater management technologies.

Wall Street seems to agree with his assessment. The stock is up 16% in 2014.

Mac will begin his studies at the University of the Michigan in the fall, and plans to major in business and economics. As for a future career, he's keeping his options open, but his visit to the NYSE has lead him to at least consider life as a fast-talking trader.

"It was amazing just to be on the floor," he says. "I was immediately enamored by the lights, the architecture, and the people."

Related: The unglamorous life of hedge fund startups

Olivia Dampier, 7th grade, Littleton, CO: With the goal of saving for graduate school, Olivia is bullish on retail, particularly WalMart (WMT) and Home Depot (HD).

As for WalMart, she believes the company will benefit from its sheer popularity and low prices. They "have everything," as she put it.

Olivia's Home Depot investment is based on her faith in the American recovery. She thinks as the economy improves, the home improvement retailer will benefit significantly from an increase in home renovations.

Wal-Mart is down 4% so far this year. Home Depot is about flat for the year.

The SIFMA Investwrite winners, from right: Hannah Brawley, Olivia Dampier, Marcelo Bongalon, and Mac Bank,

Hannah Brawley, 12th grade, Vestavia Hills, Alabama: Hannah is playing an insider's game. The University of Alabama-bound southerner opted to include United Parcel Service (UPS)in her portfolio because her father owned the stock when he worked there as a human resources manager.

"If someone inside the company wants to own it, that's a good sign," she says.

Hannah also chose the Vanguard Social Index (VFTSX), which excludes companies deemed socially and environmentally harmful. But investing with a good conscience doesn't necessarily mean giving up returns. The index Hannah chose is up around 7% this year, a tad higher than the S&P 500.

First Published: July 3, 2014: 6:19 AM ET

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Dow closing in on 17,000

Traders are on Dow 17,000 watch.

NEW YORK (CNNMoney)

The Dow Jones Industrial Average was hovering around 16,980 in early trading Wednesday, up a few points from Tuesday's record-high close. The S&P 500 and the Nasdaq were also modestly higher.

"The bull lives on," said Peter Cardillo, chief market economist at Rockwell Global Capital. Stocks are being propelled by a sense of economic confidence, especially regarding the job market, he said.

Strong hiring in June: The latest jobs data added to the optimism. Paycheck processor ADP said private-sector payrolls grew by 281,000 in June, far exceeding expectations. The report suggests the government's monthly payroll tally, which comes out next week, could exceed 200,000, according to Paul Dales at Capital Economics.

Stocks roared into July, with the Dow and S&P 500 hitting fresh all-time highs Tuesday. It was the Dow's 12th record close this year.

The CNNMoney Fear & Greed index is currently pointing to 'extreme greed'.

Is the market too hot? But there are signs the stock market may be overheating. Central bankers sound increasingly concerned about asset bubbles. Some measures of stock valuations are flashing red. And while the economy has improved, some investors say stocks have outpaced reality.

Related: The 5 top performing stocks from the first half of 2014

Yellen speaks, markets listen: The head of the Federal Reserve, Janet Yellen, will be speaking at the International Monetary Fund at 11 a.m. Investors will be watching for clues as to how long the Fed will wait to raise interest rates once its bond-buying program ends later this year.

Related: Autopsy of America: photos of dead malls

Stock movers -- Constellation, JPMorgan, AbbVie: Shares of Constellation Brands (STZ) jumped in early trading after the beer and wine distributor reported strong quarterly results and boosted its outlook. The U.S. distributor of Corona expects net income from its beer business to grow between 25% and 30%.

Investors will be watching JPMorgan (JPM) shares after CEO Jamie Dimon announced he was diagnosed with a curable throat cancer. He will continue working as he undergoes treatment.

Shares in the pharmaceutical firm AbbVie (ABBV) were up modestly. The company has been looking to take over rival Shire (SHPG) in the U.K. but has faced continued resistance from Shire's management.

Gravity appears to be setting in for GoPro (GPRO). Shares of the wearable video camera company were down for the first time since it's initial public offering on Thursday.

Related: The 5 worst performing stocks from the first half of 2014

European markets were mostly higher in early trading. All the major Asian markets ended with gains, taking their cue from Wall Street's record-setting run Tuesday.

First Published: July 2, 2014: 9:45 AM ET

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Russia attacks U.S. oil and gas companies in massive hack

Russian hacker spies are attacking energy companies. It's the latest sign the Cold War has gone cyber.

NEW YORK (CNNMoney)

That much is clear after a security firm reported this week that Russian hackers have launched unprecedented, highly-sophisticated attacks on Western oil and gas companies.

The cyber operation nicknamed Energetic Bear is the latest example of an ongoing battle between all-seeing American and British cyber spies on one side -- and intellectual-property-stealing hackers in China and Russia on the other.

The report by Symantec (SYMC, Tech30) described how hackers have sneaked malware into computers at power plants, energy grid operators, gas pipeline companies and industrial equipment makers. Most of the targets were in the United States and Spain. The rest were across Europe.

The malware was used to steal documents, usernames and passwords. In the best-case scenario, the hackers only took valuable and sensitive information. At worst, they gained the ability to hijack controls -- and even sabotage the nation's energy supply.

Related story: What China's hacker spies are after

Another security company, Crowdstrike, first spotted the Energetic Bear operation in 2012. Crowdstrike thinks the hackers at Energetic Bear work for -- or alongside -- Russian government intelligence services at the behest of state-owned gas enterprises, including Gazpro (GZPFY)and Rosneft.

Neither the Russian embassy, nor those energy companies, responded to requests for comment.

Why should you care? If a nation breaks into Exxon-Mobil (XOM) or BP (BP) and figures out where they've discovered vast oil or natural gas reserves, it could beat them to the punch and start drilling first. If it steals blueprints to the power grid or key pipelines, it could disable them to cause economic chaos -- or shut it down during a war.

"The Russians are engaged in aggressive economic and political espionage," Crowdstrike co-founder Dmitri Alperovitch said.

Related story: Is Russia trying to stop Europe fracking?

Security researchers said Energetic Bear is notable for its military precision and planning.

And Energetic Bear hackers aren't limited to attacking the energy sector. Their malware has also been spotted inside the networks of European and U.S. defense contractors and health care providers, as well as manufacturers, construction companies and universities doing research in the field of nuclear energy.

"We haven't seen anything at this scale with industrial control systems," said Kevin Haley, Symantec's director of security.

First Published: July 2, 2014: 8:18 AM ET

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U.S. adds 281,000 private-sector jobs

Private sector firms added 281,000 jobs in June, marking the strongest month for hiring since November 2012, according to payroll processing firm ADP.

NEW YORK (CNNMoney)

Private sector firms added 281,000 jobs in June, marking the strongest month for hiring since November 2012, according to payroll processing firm ADP (ADP).

"The job market is strong, and it feels like it's getting stronger," said Moody's Analytics Chief Economist Mark Zandi, who helps ADP compile the report.

Those job gains come from companies both large and small, and across a variety of industries.

Related: These people found new jobs in June

Small firms with fewer than 50 employees, added 117,000 jobs, whereas large firms with more than 500 workers added 49,000 jobs. Meanwhile, mid-sized businesses added 115,000 jobs -- the strongest hiring by medium-sized companies in seven years.

Breaking down the job growth by industry shows professional and business services added 77,000 jobs and financial companies added 11,000 jobs.

Blue collar industries that were among the hardest hit sectors in the recession are also gaining momentum, with construction firms adding 36,000 jobs and manufacturers adding 12,000 jobs.

These encouraging signs for the job market fit alongside other strong economic data released this week. Auto sales rose to an eight-year high, and new orders for manufactured goods rose to a six-month high in June. These increases are seen as a sign of improving consumer and business confidence in the future.

Although the ADP report only includes data on the private sector (it does NOT include government jobs), it is often seen as pre-cursor to the Department of Labor's definitive report on U.S. job growth and unemployment, which is scheduled to be released tomorrow.

Economists surveyed by CNNMoney predict that report will show the U.S. economy added 200,000 jobs and the unemployment remained at 6.3% in June.

First Published: July 2, 2014: 9:19 AM ET

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Facebook experiment upsets regulators

Officials want more information on how a study that manipulated Facebook users' moods was conducted.

LONDON (CNNMoney)

Officials in the U.K. and Ireland, where Facebook (FB, Tech30) has its European headquarters, are asking questions of the company after details of the experiment were published last month, angering many users.

"We are awaiting a comprehensive response on issues raised," said a spokesperson for the Irish data protection commissioner.

Facebook changed the content mix in the News Feeds of almost 690,000 users to gauge their emotional response to positive or negative posts.

Related: Facebook is 'evil'. Wall Street approves

Experiments are commonplace on the Web. Internet companies routinely conduct tests to improve their business and users' experience.

Facebook's terms of service state that it can use personal data for "analysis, testing, research and service improvement."

But the fact that some users were deliberately made to feel less happy, without their explicit consent, raises questions about the ethics of this particular experiment.

Consent is one area the Irish authorities are investigating. And in the U.K., the Information Commissioner's Office is asking questions about how the research was conducted, a spokesperson said.

The Facebook researcher who designed the experiment has apologized for the anxiety it caused, and questioned whether the findings were worth the hassle.

Related: Facebook's other user experiment: conflict resolution

The company also appears to be having second thoughts too, acknowledging that people were upset by the study.

"We want to do better in the future and are improving our process based on this feedback," said Richard Allan, head of policy for Europe, Middle East and Africa.

"The study was done with appropriate protections for people's information and we are happy to answer any questions regulators may have."

First Published: July 2, 2014: 7:09 AM ET

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