Next week you'll pay more for a Starbucks latte

Starbucks, next Tuesday, is raising U.S. prices by an average of 1% for its brewed drinks to help offset an increase in business costs.

NEW YORK (CNNMoney)

The price hike will affect beverages including Starbucks' (SBUX, Fortune 500) brewed coffee, tea, latte and espresso drinks, said spokesman Jim Olson. While drink prices vary from city to city, Olson said that customers in some markets could pay about 10 cents more for a tall brewed coffee.

Still, less than one-third of all Starbucks beverages will be affected by the new prices, he added.

For instance, prices will not increase at a vast majority of Starbucks stores for its venti and grande-sized brewed coffees, or for its Frappuccino drinks.

This is the first price hike in nearly two years for the coffee chain, according to Olson, who said the rising cost of labor, raw materials and rent triggered the move.

Still, there is one way that customers can always shave a few cents off their coffee tab: Starbucks offers a 10 cent discount on any drink when customers bring in a personal tumbler or use a reuseable Starbucks cup.

First Published: June 21, 2013: 5:01 PM ET

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LeBron will never be an endorsement star like Jordan

NEW YORK (CNNMoney)

He may be a great basketball player, but endorsement experts say that off the court, he's still no Michael Jordan.

James has $39 million in annual endorsements, more than any other active athlete, according to the Fortunate 50 rankings compiled by Sports Illustrated and Fortune magazines. But Michael Jordan is still bringing in a whopping $80 million in endorsement deals a year - even though he hasn't set foot on a court in a decade.

Many fans simply don't like James. He was heavily criticized when he moved to the Miami Heat as a free agent in 2010, and his popularity plunged according to various surveys.

Related: Heat's winning streak sparks sales rush

"That was the first time we saw such a precipitous drop in appeal without something criminal happening," said Henry Shafer, executive vice president of the Q Scores Company, which conducts one such survey.

James' likability is on par with that of Mickey Rourke and rocker Gene Simmons of KISS - which isn't great company - according to a competing survey by the Celebrity DBI index.

"It certainly doesn't hurt that [James] has won two championships in a row. But it's going to be really hard for him to match what Jordan delivered on camera and how he resonated with fans," said Darin David, director of the sports consulting group at The Marketing Arm, which arranges deals between advertisers and and celebrities.

Related: Under Armour's crew of star athletes

David and others experts say that pitchmen like Jordan and Peyton Manning have a special on-screen persona that most athletes will never have, no matter how many championship titles they might accumulate.

Both Jordan and James have deals with Nike (NKE, Fortune 500), which pays out billions in endorsement deals to athletes around the world. James also has deals with top consumer companies like Coca-Cola (KO, Fortune 500), McDonald's (MCD, Fortune 500) and Samsung. But commercials starring James get relatively limited air time, even during the NBA playoffs.

Related: Coming out could boost Jason Collins' endorsements

Shafer, from the Q Scores Company, said that while James has started to slowly win back sports fans, he hasn't made a lot of progress with the general public.

"It's not just about winning. It's about how you interact with the public," he said.

First Published: June 21, 2013: 4:28 PM ET

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Pending law would block Tesla sales in New York

Elon Musk and Tesla are battling dealership associations throughout the country for the right to sell vehicles directly to customers.

NEW YORK (CNNMoney)

Tesla said in a statement Friday that if the bill passes, it will be "put out of business in New York," with all employees in the state losing their jobs.

"The bottom line for New York consumers and New York suppliers is that if this bill passes, special interests in Albany will once again have gotten their way while robbing New Yorkers of choices in the marketplace," Tesla (TSLA) said.

The current legislative session was originally scheduled to conclude on Thursday, but work continued in both the Senate and Assembly on Friday, and it is unclear when it will end.

Related: Tesla unveils 90-second battery-pack swap

CEO Elon Musk took to Twitter Friday as legislators were considering the bill, urging New Yorkers to call their representatives and ask them to vote it down.

The New York State Automobile Dealers Association did not respond to a request for comment, though the association is also urging supporters to contact their representatives, saying the pending bill is "designed to maintain the health and vitality of New York's retail automobile industry."

Tesla has tangled with dealership associations in a number of states in its effort to sell its Model S electric sedan directly to consumers rather than using franchised car dealers.

General Motors (GM, Fortune 500), Ford (F, Fortune 500), Toyota (TM) and others don't sell cars to customers. They sell to independently owned and operated dealers or distributors who, in turn, sell them to the public, usually after some negotiation over the final price.

Tesla's showrooms, by contrast, are owned and operated by the company. Most are in shopping malls, with only enough cars on hand for display and test drives. Every Tesla car sells at full sticker price, and service on the cars is performed at separate garages owned by Tesla.

Auto sales are mostly regulated at the state level. In some states, Tesla has had little or no problem opening its stores. In others, auto dealers and their allies in government have resisted Tesla's plans, fearing they could ultimately undermine the system of franchised dealers.

Earlier this month, legislators in Texas failed to vote on a bill backed by Tesla that would have loosened the state's restriction on dealerships owned by automakers. Virginia rejected the electric-car maker's dealership application earlier this year.

Dealers argue that the traditional franchise system is best for car buyers because it preserves competition between dealerships selling the same products.

But Tesla worries that traditional franchised dealers, who also have gasoline cars to sell, won't represent its products properly or aggressively enough. Dealers pressed to make quick sales will likely be tempted to steer customers to gasoline cars rather than explain the benefits of the Model S, Diarmuid O'Connell, Tesla's vice president for business development, told CNNMoney last month.

"From the beginning, Tesla's goal has been to catalyze the market for electric vehicles, and selling through intermediaries at this stage of the company will not work," Tesla said Friday.

First Published: June 21, 2013: 6:31 PM ET

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Tesla unveils 90-second battery-pack swap

Tesla demonstrated that it could swap the battery in a Model S faster than a car can be refilled at a gas station.

NEW YORK (CNNMoney)

Tesla hopes the new system will help overcome the fears that many drivers have about the convenience of electric cars.

At a demonstration in California Thursday night, Tesla CEO Elon Musk said the battery swap stations will be installed throughout the network of "supercharging" stations that Tesla is already installing around the nation. The supercharging stations currently provide free recharging in about an hour. Musk said the battery swap, which will cost between $50 and $80, will allow drivers to get back on the road faster if they'd like.

"The only decision you need to make when you come to one of our Tesla stations is, do you prefer faster or free," he said. "Our goal here was to eliminate the objections that people have. We want to show that [Tesla] can actually be more convenient than a gasoline car. Hopefully this is what convinces people that electric cars are the future."

While Tesla showed the Model S battery swaps, there were TV's above the swapping station showing a 4-minute video of a driver filling up at the pump. The cost of the 23 gallons of gas purchased at the Los Angeles gas station in the video was $99.83.

Related: 9 questions for Tesla's Elon Musk

According to analyst Trip Chowdhry of Global Equities Research, the quick-charge stations will be a money maker for Tesla, which plans to spend about $100 million installing the stations.

"We estimate Tesla margins on battery swap stations could be north of 60%," he said.

The battery swapping technology also gives Tesla additional environmental credits from states such as California, which are pushing automakers to sell more zero-emission cars. Tesla has been able to sell those credits to the major automakers, and that has been a significant source of profits for the company.

One start-up that also planned to offer battery swapping for electric vehicles, Better Place, recently filed for bankruptcy and halted its operations. Chowdhry said that company's plans were based on the flawed assumption that all the different electric vehicles would use interchangable batteries.

Related: Tesla tripling supercharger network

In May, Tesla announced plans to greatly expand its existing supercharging network, tripling the number of stations by the end of this month. By the end of this year, Tesla plans to have more than 100 locations, allowing drivers to drive from Los Angeles to New York.

The battery swapping stations are expected to be in service by the end of the year.

Shares of Tesla (TSLA), which have nearly tripled in value so far this year, were up 2.6% in early trading.

First Published: June 21, 2013: 10:05 AM ET

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China's credit squeeze spooks markets

China is grappling with the challenge of pricking real-estate and credit bubbles and avoiding a hard landing for the economy at the same time.

LONDON (CNNMoney)

In its bid to control surging real estate prices and a head off a credit bubble, the Chinese government could end up sparking a credit crunch and slow economic growth more than expected.

And as seen this week, concerns about the world's second-biggest economy can rattle investors all over.

The People's Bank of China, which maintains tight control over the banking system, has been taking a tough line with Chinese lenders. It refused to inject cash into the financial system earlier this week despite rocketing short-term borrowing costs and evidence that the economy is slowing.

Growth in China slipped to 7.8% last year. The government's target for this year is 7.5%. But the risk of a disappointment is rising and with it the prospects of a weaker-than-expected recovery in the global economy.

HSBC, which cut its China forecast to 7.4% this week, said it believed Beijing would not act to stimulate the economy unless growth was heading to 7%.

"We believe markets will worry about the slowdown, but take time to get enthusiastic about the prospects for reform," noted HSBC strategists Garry Evans and Herald van der Linde, downgrading Chinese equities to neutral from overweight.

The Shanghai Composite and Hong Kong's Hang Seng both closed about 0.5% weaker Friday and have lost 8.6% and 10.6% respectively since the start of the year, compared with gains of about 11% on U.S. stocks.

With the Federal Reserve likely to start winding down its bond-buying program before the end of the year, analysts at Nomura believe China is taking a stand now to avoid delivering two shocks simultaneously.

Related: China cities move to cool red-hot housing market

The rate at which Chinese banks lend to each other overnight hit a record high above 13% this week before falling to 8.5% Friday. Another key measure of cash in the banking system -- the 7-day "repo rate" -- hit 25% on Thursday, before dropping sharply Friday.

There were some reports Friday that the central bank had taken steps to ease lending but rates remain way above normal levels.

Explanations for the cash crunch vary. But China watchers agree that the country's central bank's hard line reflects Beijing's desire to put reform before growth in the short term and moderate lending to its burgeoning "shadow banking" sector.

"We believe that recent action by the People's Bank of China reflects the government's determination to take aggressive action to contain financial risks," said Nomura economist Zhiwei Zhang.

The International Monetary Fund last month cut its growth forecast for China to 7.75%, raising concerns about a rapid expansion in credit and questioning the quality of borrowers and their ability to repay loans.

Related: China's debt: a crisis in the making?

Analysts worry that new lending is not translating into growth and is increasingly dominated by unregulated operators such as trust companies, securities dealers and underground operators that make up the shadow banking system.

The risk that the cash crunch will trigger a full-blown financial crisis is slim, given the vast resources of the Chinese government. But corporate earnings will suffer as financing costs rise, and some companies could default.

Fitch Ratings agency, which warned in April about excessive debt levels, said Friday it calculated that credit expansion would total 18 trillion yuan ($2.9 trillion) this year, a level similar to 2011 and 2012, if the authorities maintain their current stance.

But with 10 trillion yuan extended by the end of May, that implies a sharp drop in new credit in the second half.

"This credit deceleration will create a further drag on economic growth, which has been slowing down steadily since early 2010," Fitch said.

The central bank has not commented this week but the Chinese government said Wednesday it would maintain a prudent monetary policy to curb new credit for unauthorized construction projects in industries with over capacity.

First Published: June 21, 2013: 10:19 AM ET

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What sell-off? Stocks stabilize.

Click chart for more markets data.

NEW YORK (CNNMoney)

Investors were spooked after Fed chairman Ben Bernanke gave them reason to think the central bank could wind down its stimulus program later this year. Shares fell sharply Wednesday afternoon and the pullback accelerated Thursday.

But with little news to trade on heading into the weekend, it appears investors were willing to step back into stocks. The Dow Jones Industrial Average and the S&P 500 rose between 0.3% and 0.4%.

The Nasdaq dipped 0.1%. Weak results from Oracle (ORCL, Fortune 500) dragged down the tech-heavy index.

Click here for more on bonds, currencies and commodities

Even after this week's sell-off, stocks are still way up this year. All three major U.S. indexes have gained between 11% and 13%.

The Fed has been a major driver of the bull market over the past few months as it has injected liquidity into the markets. Traders say the coming shift in monetary policy will mean even more volatility in the months ahead. The CBOE Market Volatility Index (VIX) surged 23% Thursday.

Investors are expecting an extra dose of volatility Friday. It's quadruple witching day. This eerie date occurs four times a year and is when four types of options contracts expire. It usually means that trading volume increases, and prices bounce around more.

Related: Fear & Greed Index firmly in extreme fear

U.S. government bond yields also remain at elevated levels. The 10-year Treasury yield was at 2.42% Friday morning.

Investors have been bailing out of bonds and sending yields higher over the past month amid speculation that the Fed will soon taper its monthly bond purchases, known as quantitative easing.

Gold has also been hit hard due to Fed tapering fears. But the metal bounced back Friday after a sell-off pushed gold below $1300 an ounce to its worst level in two and a half years.

European stock markets were mixed in midday trading, while Asian markets ended with mixed results.

Japan's Nikkei index posted a 1.7% bounce, closing the week with a gain of 4.3%.

Related: Don't panic! Selling now could hurt your nest egg

But Chinese stocks continued to head lower as investors worried about tighter liquidity conditions across the country and a slump in manufacturing activity.

Nomura said Chinese government policies seem to be the reason for the cash crunch.

"Since mid-March, the government has introduced a series of tightening measures in the shadow banking sector to contain financial risks," it said in a research note.

"The People's Bank of China could have reacted and injected liquidity through open market operations. Its decision not to intervene shows that it is committed to tightening the policy stance."

Related: U.S. dollar headed for 'multi-year rally'

In corporate news, shares of Facebook (FB) rallied Friday, one day after the social media giant rolled out its Instagram video product.

Darden Restaurants (DRI, Fortune 500), which operates chains including Red Lobster and Olive Garden, reported earnings that missed estimates, but a slightly better-than-forecast revenue increase.

Shares of CarMax (KMX, Fortune 500) soared after the auto retailer reported better-than-expected quarterly profits.

Inflight wireless company Gogo (GOGO) will begin trading Friday with shares priced at $17, the high end of its range.

First Published: June 21, 2013: 9:44 AM ET

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Americans were much more charitable last year

NEW YORK (CNNMoney)

Donations for everything from disaster relief to animal rescue totaled an estimated $316.2 billion in 2012, up 3.5% from the previous year, according to the Giving USA foundation and Indiana University's Lilly Family School of Philanthropy.

"Historically, giving is a lagging indicator of the economy," said Heisman. "The positive data in Giving USA's report indicates Americans may be feeling more confident about the global economy."

Giving by individual donors climbed almost 4% to $228.9 billion, while corporate donations rose by 12.2% to $18.2 billion, the report said.

Related: Most charitable states in America

Despite slow economic growth of 1.8% and a high unemployment rate of 9%, there were signs of optimism in the economy that helped to boost donations. Among them: gains on Wall Street, an increase in home values, signs the jobs picture is improving, and slight growth in personal disposable income, according to the report.

Superstorm Sandy was one of the biggest relief efforts of the year; raising a total of $223 million between October and December of 2012. Corporations donated $131 million of that amount, an amount that was not as generous as expected, says Robert Evans a member of the editorial review board for Giving USA. That was mainly due to the perception that the homes affected by Hurricane Sandy were second homes and vacation homes, he said.

"During Hurricane Katrina there was much more support," said Evans. "We would have expected 50% more in terms of total dollars given."

Related: Where your donation dollars go

The foundation noted that giving last year may have been impacted by the uncertainty surrounding the fate of the charitable tax deduction ahead of the Jan. 1, 2013 fiscal cliff deadline. President Obama had proposed in the past to reduce the deduction.

With $101.5 billion in donations, religious organizations received the largest share of charitable contributions in 2012, accounting for one-third of all donations. However, religious donations are starting to shrink.

"At one point, religious donations accounted for almost 60% of all donations," said Eileen Heisman, CEO of the National Philanthropic Trust. "It's been a precipitous drop."

Giving to education, including two-year universities, K-12 schools and 4-year colleges, saw a 7% increase between 2011 and 2012 to $41.3 billion. Donations to environmental and animal organizations rose almost 7% to $8.3 billion in donations in 2012.

Heisman believes environmental concerns among the Baby Boomers and younger generations are responsible for the increase in environmental giving.

"The next generation is extremely concerned about sustainability, recycling, and global warming."

First Published: June 21, 2013: 6:01 AM ET

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Don't panic! Selling now could hurt your nest egg

Investing in the stock market is inherently volatile, but it's also the best way for retirement savers to build up nest eggs large enough to last decades.

NEW YORK (CNNMoney)

Thursday's sell off, Wall Street's single worst day of the year, may have you thinking it's best to pull out of stocks and wait it out in safer investments like bonds, money market funds or even cash. But financial advisers say not so fast: Staying the course is a much smarter move.

Yes, investing in the stock market is inherently volatile, but it's also the best way for retirement savers to build up nest eggs large enough to last decades. From the European debt crisis to changing Fed policy, there are always going to be events that send stocks plunging, but reacting to those headlines is the wrong long-term strategy, said Stuart Ritter, a financial planner and vice president at T. Rowe Price Investment Services.

Related: Ben Bernanke's power over your money

After all, retirement savings are built up over decades of investing and daily market fluctuations (even those as drastic as Thursday's plunge) will ultimately be overshadowed by long-term market gains. So even though the Dow Jones Industrial Average shed nearly 4% in the last two days, it still remains up nearly 13% year to date. The S&P 500 and Nasdaq are also up more than 10% from last year.

"The action that may feel emotionally comforting is often the one that sabotages your financial goals in the long term," Ritter said. "We've had situations like this one before. The people who prospered through the 2008 downturn are the people who did not react to the daily gyrations of the market."

Related: Stop panicking, ignore the Fed!

Indeed, a recent study by Fidelity Investments found that 401(k) investors who continually invested over the last 10 years saw their average account balances grow by an average annual increase of nearly 17% from $46,000 in 2003 to more than $200,000 in the first quarter of this year. While helped by added contributions, the balances were also boosted by the stock market rebound, said John Sweeney, executive vice president of retirement and investing strategies for Fidelity.

In addition, many retirement accounts are invested in a mix of assets based on your age, which means that the effects on your portfolio may look different from the headlines.

Either way, pulling out of the market now will hurt, rather than help, your retirement savings since you will be selling your investments at a low.

"You've already experienced today's downturn. Getting out now doesn't change it," Ritter said. "If you lock in the losses, you're making it permanent. "

First Published: June 21, 2013: 6:06 AM ET

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Micro-apartments: The anti-McMansions

NEW YORK (CNNMoney)

Typically ranging between 180 and 300 square-feet, these tiny apartments are becoming increasingly popular among the young-and-single set and even some retirees, seeking affordable places to live in the nation's costliest cities.

Nowhere is the micro trend hotter than in Seattle. More than 40 micro-apartment developments have been built in the city in the past three years, according to Jim Potter, chairman of Kauri Group, a Seattle-based developer. Many of these apartment buildings offer shared patios, roof decks and even communal kitchens. (Zoning laws in Seattle allow up to eight apartments to share one kitchen).

Other emerging micro-apartment hotspots include San Francisco, Boston, Providence, R.I., New York and Portland, Ore., where Kauri is building a new complex.

The key selling point is affordability. In Seattle, 250-square-foot apartments rent for under $800 a month, almost half the average $1,400 people pay for newly built studios of 400 square feet or more in the city, according to Potter.

Related: Inside the ultimate man cave

In San Francisco, Patrick Kennedy of micro-apartment developer Panoramic Interests, rents 295-square-foot apartments for $1,600, about a third less than the going rate for newly built studios in the area.

Living in tiny spaces requires big lifestyle adjustments. When Aron Susman moved his commercial real estate information company, TheSquareFoot, from Houston to New York, the 30-year-old bachelor went from a 1,700-square-foot apartment to just over 200 square feet.

"At first, it was shocking," he said. "I had a closet in Houston that, I swear, was bigger than my whole apartment now. It causes you to go out and do things. I spend less time in my apartment."

He is able to walk to his office where he usually works late. During the evenings, he often meets up with friends, most of whom live in the neighborhood.

Related: Cities with the best parks

New York has always been known for its shoebox-sized apartments. But its mayor, Michael Bloomberg, wants to add to the stock of small apartments. He recently sponsored a micro-apartment design competition aimed at combating the city's shortage of affordable places for its one- and two-person households.

In some Manhattan neighborhoods, upwards of 70% of households consist of singles or couples, according to Eric Bunge, a partner in of nARCHITECTS.

The city recently awarded Bunge's firm a contract to develop a complex of 55 micro-apartments ranging from 250- to 370-square feet. When it opens in 2015, it will be the first micro-apartment complex built in Manhattan since 1955, when the city banned new studios of under 400 square feet. Rents will probably be in the low $2,000s and the building will offer communal living areas, including dens, a rooftop garden, and a fitness room, he said.

Related: 10 big, booming cities

Many modern micro-apartments have innovative, efficient designs marked by flexible features. Dining room tables turn into beds. Excess vertical spaces hold shelves. Banquette lids open for storage space.

Panaromic's recently completed 23-unit building includes a "Murphy Bed" that flips up and leaves a dining table behind that can seat five people, a work area, storage, exterior space, and Internet access -- all within 295 square feet. The kitchens have refrigerators, dishwashers and microwaves, but no conventional ovens.

Related 10 most polluted cities

Somewhat surprisingly, many seniors have moved into the new micro-apartments, said Potter. These empty-nesters seek to downsize from their full-sized homes, looking for an affordable, less high maintenance option.

No matter what your age, micro-apartments can take some getting used to -- unless you're already living in tight quarters. "We had a Japanese newspaper come and write a story about our apartments," said Kennedy. "Their conclusion was 'This is not a small space.'"

First Published: June 21, 2013: 6:21 AM ET

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Fewer Americans to travel for July 4 holiday

It might not seem like it if you get stuck in July 4 traffic but there are expected to about 300,000 fewer people on the roads over the holiday weekend.

NEW YORK (CNNMoney)

This year July 4 falls on a Thursday, giving travelers a four-day holiday weekend, rather than the five-day weekend they had last year. AAA projects that 40.8 million Americans will travel at least 50 miles from home in the July 3 to July 7 period., down about 300,000 from those who made a trip last year.

But the travel group says economic conditions are also keeping people closer to home.

"Economic growth is not robust enough to offset the impact of the sequester and the effect of the end of the payroll tax cut on American families," said AAA CEO Robert Darbelnet.

In addition to slightly fewer people hitting the road, the group estimates the average trip will fall to 613 miles, down 110 miles from last year. But travelers are expected to spend about the same amount as in 2012 - about $747.

Related: Want a cheap flight? Book 49 days ahead

Air travel is expected to tick up by about 10,000 flyers to 3.07 million. So the bulk in the travel decline will come from motorists, who make up 84% of those traveling.

Related: Gas spending and prices by state

Those drivers could be paying more at the pump. AAA says that the current national average for a gallon of self-serve regular gas is $3.60, up 11 cents from a year ago. But where people live and where they're traveling could make a big difference in those year-over-year comparisons due to wide variations in various regional wholesale markets.

Related: American Airlines plans to pack more people into its planes

"If they live near the Great Lakes, they may see the cheapest pump prices since mid-winter," said Tom Kloza, chief oil analyst at GasBuddy. "If they reside in California or the Pacific Northwest, they may see the highest street prices since last October."

First Published: June 20, 2013: 7:43 AM ET

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