Jeremy Hobson: We got quarterly earnings from two big companies today. McDonald's said today its profits were up 7 percent last quarter, thanks to a 9 percent rise in U.S. restaurant sales and a 5 percent boost in Europe. Also General Electric reported
an 11 percent drop in profit during the first three months of the year. Part of that was a loss the company incurred from Irish mortgages.
Let's get reaction now from Chris Low, chief economist with FTN Financial. He joins us live as always from New York. Good morning, Chris.
Chris Low: Good morning.
Hobson: Other than the fact that GE was apparently involved in Irish mortgages, any other surprises in these numbers this morning?
Low: Ouch. You know, actually both of them were beat. McDonald's did quite a bit better than expected; GE did just a little bit better than expected -- which tells you at least, if nothing else, that investors are paying attention.
Hobson: Investors are paying attention -- but if you look at back at the stock market now, the last two months or so we've been hovering right around 13,000 for the Dow. Why are we just stalled in this position?
Low: Well that's right. And I think in fact these two earnings reports are sort of emblematic of what's going on: the three biggest economies in the world are slowing down -- that's the U.S., Europe and China. No one's really sure quite how much they will slow. But McDonald's is picking up business in places like Europe, of all things, because it's a cheap place to eat. And as for GE, their earnings are down because industrial output is down as well. So what I see in these numbers is global slowdown; not horrible, but things are definitely cooler than they were.
Hobson: Chris, you mentioned Europe -- I just want to ask you quickly, because there's this election coming up in France this weekend that some people say could have an impact on the global economy?
Low: Well, that's right. You know, in France, it looks like the socialist candidate is going to win, and that means that austerity -- which is the way Europe has been tackling its problems -- is less likely to be popular going forward. It's one more uncertainty; we're not quite sure what they're going to replace it with. But I guess we'll find out in the next couple of months.
Hobson: Chris Low, chief economist with FTN Financial, thanks as always.
Low: Thank you.