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As earnings season begins, fears of euro debt crisis

An Alcoa logo is seen on glass at the corporate headquarters January 7, 2009 in Pittsburgh, Penn.

Jeremy Hobson: Corporate earnings is where we'll start with Juli Niemann, analyst with Smith Moore and Company. She's with us live from St. Louis as she is every Tuesday. Good morning, Juli.

Juli Niemann: Good morning, Jeremy.

Hobson: So are you expecting global factors like the European debt crisis to weigh on other American companies this earnings season?

Niemann: Well there's a lot of, "yes, but..." here. The European recession -- which clearly they're in right now -- is going to have some impact on us. The United States exports about 17 percent to Europe. So that means basically that we're not sliding because of what's happening in Europe, we're just kind of stagnant.

The other thing is Latin America and China are slow growth rate here. So we do see green shoots of growth showing, but there's a lot of weed killer out there. So this is a yes, but it could help us.

Hobson: And what about the U.S. Can U.S. consumers sort of come to the rescue if global factors, as you say, are going to weigh companies down?

Niemann: Here's the good news, on the jobs data. Very good increase in jobs last month -- 200,000 jobs.

Hobson: Right.

Niemann: But there are 10 million that have to be recovered -- so that's about eight short years. Not only that, but the hiring was in low-wage areas: messengers, couriers, restaurants, retail -- that's about half. So the need to find a job is being met, but the decent job isn't there, which means you're going to have very slow consumer spending. Yes, we are recovering, but it's not a quality recovery.

Hobson: Juli Niemann, analyst with Smith Moore and Company, thanks as always.

Niemann: You bet.

About the author

Juli Niemann is executive vice-president for research and portfolio management with Smith, Moore and Company.
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