Motley Fool Money: 01.28.2011
Motley Fool Hidden Gems Investing
The Motley Fool
4.3 • 3.1K Ratings
🗓️ 28 January 2011
⏱️ 39 minutes
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| 0:00.0 | Everybody needs money. That's why they call it money. |
| 0:08.0 | From full global headquarters, this is Motley Fool Money. |
| 0:19.0 | Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Helm. |
| 0:22.0 | I'm joined by Motley Fool's Senior Analyst, Charlie Travers, James Early, and Ron Gross. |
| 0:26.0 | Good to see you. Good to see you, Chris. |
| 0:29.0 | Lots of companies reporting earnings this week will dig into the latest numbers from Ford, Microsoft, McDonald's, and more. |
| 0:35.0 | We'll look at a couple of IPOs, plus, as always, giving an inside look at the stocks on our radar. |
| 0:40.0 | But we begin this week with the big macro. The government said on Friday that the economy grew at an annual rate of 3.2% in the last three months of the year. |
| 0:49.0 | Consumer spending was up sharply, but Ron Gross, the business inventories and the construction activity numbers were not exactly pretty. Break it down for us. |
| 0:59.0 | So 3.2% is pretty strong in general. It's lower than expectations, and the market trades on expectations, obviously. |
| 1:06.0 | But let's move aside from that for a moment. As you said, consumer spending and exports look really good. |
| 1:12.0 | What wasn't as strong is actually what has been driving the growth in prior quarters, which was inventory. |
| 1:18.0 | Companies have been building their inventories back up once the recession kind of went away, and we've been slowly getting back up to speed. |
| 1:25.0 | They did that at a slower rate in the fourth quarter. They did not need to continue to purchase goods to sell to the public. |
| 1:32.0 | Plenty of items already on the shelf. Plenty of items in the warehouse. |
| 1:35.0 | And then demand for goods based on what they say. They did not keep up that same rate of purchasing, and that dragged the numbers down to 3.2. |
| 1:44.0 | It probably would have been higher than 7% if those inventory rates had kept going at similar rates to prior quarters, but 3.2% is still pretty good. |
| 1:54.0 | On Tuesday, President Obama had his State of the Union address. In the speech, he proposed a reduction in corporate tax rates. |
| 2:01.0 | Is that a good idea, and is that the kind of thing that's going to be good for GDP growth? |
| 2:05.0 | It actually is, Chris. Innovation is really our meal ticket, I think, for this country. |
| 2:10.0 | We become a nation of entertainers, so to speak. We're very cool, but we don't focus a lot on the hard sciences. |
| 2:16.0 | Excuse me, and on business and Obama's speech actually hit both these nails on the head. I mean, it wasn't riveting, but I think you really got to the crux of the matter. |
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