Financial 411: An Optimistic Economic Outlook
Monday, January 24, 2011
McDonald's Reports Rise in Earnings
Earnings season continues this week, with McDonald's among the companies reporting today. The burger people say forth quarter earnings rose more than two percent to $24 billion. That's pretty decent considering rough weather in North America and Europe in December kept diners at home and hurt sales. The world's largest hamburger chain said it may have to raise its prices this year because food costs have increased.
Tech stocks rose after Intel increased its dividend and said it will add $10 billion to its stock buy-back plan. The Dow rose 109 points, ending at 11,981. The Nasdaq added 28 points, settling at 2,718. The S&P 500 ended the day at 1,291, after rising seven points.
Venture Capital Rivalries Continue
The rivalry between Boston and New York City isn't just limited to their Major League Baseball teams. Both cities are vying for second place, behind Silicon Valley, for venture capital funding. New data released by Dow Jones shows that for the first time, New York City companies won more venture capital deals than Boston companies in 2010. However, Boston pulled in more money.
But the two cities were still seriously trounced by the San Francisco Bay area, where companies received more than double the amount of venture capital that companies in Boston and New York received combined.
A Look at the Week Ahead
WNYC's Business Editor Charlie Herman has this preview of the week ahead:
We'll see some more earnings this week, but I think the bigger news is going to be the President giving his State of the Union address tomorrow night. We're expecting him to talk a lot about American competitiveness, about creating jobs, about finding new ways to be innovative and really try and keep the U.S. economy going. And also he's going to talk about trying to reduce the debt and find ways to do that.
Then later this week, we have the World Economic forum in Davos, that is this huge schmooze-fest with, you know, several thousand global leaders — political leaders, business leaders — talking a lot about the future of the global economy.
We have a lot of economic figures as well, including the Federal Reserve is meeting later this week to discuss interest rates, we'll get the fourth-quarter gross domestic product for the year and we may even get the report from the financial crisis inquiry commission — this is the group charged with investigating what were the causes of the financial crisis. Their report could be coming out this Friday.
Economists See Signs of Recovery
Economists taking the pulse of the U.S. economy say the patient is getting stronger. A new survey by the National Association for Business Economics suggests there's optimism about overall economic growth, the demand for goods and services and even the job market.
Ken Simonson, chief economist with the Associated General Contractors of America, is an author of the survey. He talks about some of the findings of the report, which surveyed more than 80 economists, as well as why some of them are feeling more optimistic about the economy's recovery.