The Exchange
  • The New Normal?: GDP and Housing Up, Job Growth Tamped Down

    By Gary D. Burnison

    With new homes sales steadily ticking up, and an improved annualized gross domestic product (GDP) growth rate, one would think that employment would improve vastly and be better than the 7.8 percent we have today. But, it is not, and don’t expect it to be in the near future – here is why.

    Here’s a fact: According to the National Association of Home Builders, each new home creates an average of 3 jobs for a year and $90,000 in taxes. But, you can forget the past history that as home sales rose, employment was sure to improve. In the latest housing bubble that peaked in 2006, the unemployment rate was below 5 percent. The GDP annual growth rate was 2.7 percent. But, in 2013, in other business sectors, we are cutting more jobs than home sales can generate.

    Growth is happening

    So, this month, while it has been reported that U.S. homebuilders broke the 1 million mark for seasonally adjusted annual rate of new construction in March 2013, it is still not enough. It was the

    Read More »from The New Normal?: GDP and Housing Up, Job Growth Tamped Down
  • All eyes have been on Boston this past week following the tragic Marathon bombings on Monday. Friday brought a historic lockdown for the city amid a dramatic manhunt.

    It has been hard for news junkies to focus on much else this week, but the rout on Wall Street and massive plunge in gold were dominating financial news headlines on Monday before the bombing. Now we're ending a week that has been the worst on Wall Street yet this year; the S&P 500, down 2.1%, hasn't seen a performance this weak since last November.

    Next week will be another big one for earnings, with Apple (which closed below $400 this week for the first time since 2011) in keen focus. We'll also see a slew of housing data and get a look at first estimates for Q1 GDP. And, of course, we'll be following any new developments in Boston.

    Here are some key things to look out for over the next week:

    Friday, April 19-Sunday, April 21: IMF and World Bank spring meetings take place in DC

    Monday, April 22

    • Key earnings:
    Read More »from Finance Week Ahead: More Earnings, Housing Data, First Pass at Q1 GDP
  • McDonald's (MCD) met estimates for its earnings and revenue in the first quarter, but same-store sales were sluggish amid the need to keep prices down and customer traffic up.

    The company said Friday it had sales of $6.60 billion, with a profit per share of $1.26, in the January through March period. In the same quarter last year, McDonald's earned $1.23 a share on revenue of $6.55 billion. Analysts surveyed by FactSet and Bloomberg were looking for $1.26 on the bottom line, while the Reuters consensus outlook was $1.27. The sales expectation was right around $6.6 billion.

    Directionally, same-store sales were a different matter. Comparable sales worldwide were down 1%, a number that was actually slightly better than the 1.1% decline projected by analysts. Still, it continues several months of shallow comparable sales for the Oak Brook, Ill., Big Mac seller. Whether it's a surprise in a slightly positive manner is secondary to the fact that comps aren't staying as elevated as McDonald's

    Read More »from McDonald’s: Economic Woes Keeping Sales in Check
  • A horde of penguins took over the New York Stock Exchange Friday morning as SeaWorld representatives rang the opening bell to herald the company’s entry into the public waters of Wall Street.

    More than three years after its $2.3 billion sale by Anheuser-Busch InBev (BUD) to private-equity giant Blackstone (BX), SeaWorld (SEAS) is trading on the NYSE after raising a reported $702 million in one of the largest IPOs of the year. In its first minutes of trade, the stock is up 15% from its offer price of $27, which was at the top of a range starting at $24.Credit: AP, Richard Drew

    SeaWorld sold 10 million shares and Blackstone an additional 16 million, more than the 10 million originally slated. The underwriters, including Goldman Sachs and JP Morgan, have a 30-day option to sell an additional 3.9 million shares at the offer price. The deal values SeaWorld at just above $2.5 billion. This debut is part of a busy week for IPOs, which included New York-based grocery chain Fairway (FWM) on Wednesday.

    The

    Read More »from SeaWorld Dives Into Wall Street’s Public Pool

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