People walk down Wall Street in New York City.
People walk down Wall Street in New York City. - 
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JEREMY HOBSON: Now let's get to corporate earnings. In many cases, they're down this quarter after what looked like a strong and sustained recovery. Here are some numbers just from this morning:

Novartis: Profit down 6 percent.
Johnson & Johnson: down 23 percent.
Goldman Sachs: profit down 72 percent.

For more on what's going on let's bring in our regular Tuesday analyst Juli Niemann. She's with Smith, Moore and Company and she's with us live from St. Louis. Good morning.

JULI NIEMANN: Good morning Jeremy.

HOBSON: So why are profits down Juli? I thought we were in a recovery?

NIEMANN: We're in a strong recovery in some areas. And that's probably the key thing. It's reflecting profit cost cutting efficiencies. We're down to the bone now, so the game is over in terms of profit margins. Now we've got to focus on top line revenue growth and what we need is strong demand. The demand has been globally strong, just not here in the United States. And how we're looking at a risk to our expansion here. Because even though manufacturing is growing, and export markets are at record levels and we're adding new jobs, we're looking at our trading partners -- the people who buy our stuff -- are seeing much slower growth. And that's largely because of inflation -- real concerns over inflation. And probably the biggest thing is food prices. We only spend about 15 percent on it. But China and Brazil, India -- between 30 and 45 percent spent on it. So that's going to slow their demand down for our stuff.

HOBSON: But Juli, I thought that consumers were spending more, consumer confidence is higher?

NIEMANN: Consumer confidence is higher, up to a point. They're in a replacement cycle. They're see that we're not seeing huge layoffs right now, slowly adding new jobs. They're hoping that we're not going to see another plunge in the stock market because the market has help up amazingly well.


NIEMANN: But it all comes from job growth.

HOBSON: Juli Niemann, analyst with Smith Moore and Company, thanks so much.

NIEMANN: You bet.