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The S&P 500 edged up to a record closing high at the end of a choppy day of trading. The Dow was off just slightly as declines in shares of Cisco weighed on the 30-stock index.
The world’s largest retailer’s third quarter results on Thursday showed that yet again, CEO Doug McMillon continues to pull almost all the right strings operationally.
(Bloomberg Opinion) -- The global bond market rallied for a second consecutive day on Thursday in an awkward development for the growing chorus of voices that have cropped up the last few weeks contending that the synchronized global slowdown was over. From China to Germany, and from Cisco Systems Inc. to freight shipments, the latest data show it’s too soon to turn optimistic.In China, industrial output rose 4.7% in October from a year earlier, below the median estimate of 5.4%. Germany did post a surprise expansion in its gross domestic product for the third quarter, but that came with plenty of caveats. For one, the increase was only 0.1%, and the contraction for the second quarter was deeper than initially reported — negative 0.2% versus negative 0.1%. In the U.S., economists were passing around the latest Cass Freight Index for October, which fell 5.9% to mark its 11th consecutive year-over-year decline. This gauge has been around since 1995 and tracks freight volumes and expenditures by hundreds of companies in North America conducting $28 billion of transactions annually. More important, the compilers of the index noted in the latest survey that the index “has gone from ‘warning of a potential slowdown’ to ‘signaling an economic contraction.’” Cisco is not in the freight business, but comments by Chief Executive Officer Chuck Robbins late Wednesday after the computer company released fiscal second-quarter results echoed the sentiment in the freight industry. “Just go around the world and you see what’s happening in Hong Kong, you look at China, what’s happening in D.C., you’ve got Brexit, uncertainty in Latin America,” he said on a conference call with investors and analysts. “Business confidence suffers when there’s a lack of clarity, and there’s been a lack of clarity for so long that it’s finally come into play.”Maybe the global economy isn’t worsening, but it’s too soon to say an upswing is underway. Despite the sell-off in the bond market since September, yields are still showing caution. Yields on bonds worldwide as measured by the Bloomberg Barclays Global Aggregate Index stand at 1.45%, which is closer to its all-time low of 1.07% in 2016 than last year’s high of 2.27% in November.AWASH IN MORE DEBTThe Institute of International Finance came out with its quarterly look at the mountain of global debt, concluding that it rose by about $7 trillion in the first half of the year to a record of just more than $250 trillion. That increase is more double the $3.3 trillion expansion for all of last year. It pegs global debt, which it sees expanding to $255 trillion by the end of the year, at a lofty 320% of global GDP. It’s no surprise that the world is awash in debt, but yields show there seems to be a dearth of it for the public because of massive purchases by central banks. As of October, the collective balance-sheet assets of the Federal Reserve, European Central Bank, Bank of Japan and Bank of England stood at 35.7% of their countries’ total GDP, up from about 10% in 2008. Still, this is no time to be complacent. The IIF points out that much of the growth in debt has come in emerging markets, which is generally considered riskier than that of developed economies and where central banks are not doing things like quantitative easing. This could become an issue relatively quickly; the IIF pointed out that $9.4 trillion of bonds and syndicated loans from emerging markets come due by the end of 2021.CORPORATE CASH SHRINKSThe latest doubts about the strength of the economy kept the S&P 500 Index little changed for a second consecutive day. Perhaps that’s for the better because falling interest rates and bond yields are perhaps the single-biggest reason equities are up 23.4% this year in the absence of earnings growth. The second is probably share repurchases. But a new report from Societe General SA raises concern that the cash companies use to fund those buybacks is being depleted. “A boon for U.S. share buybacks” has left companies with less cash in their coffers, Societe Generale strategists Sophie Huynh and Alain Bokobza wrote in a report. Cash and money-market investments held by companies in the S&P 500 peaked in 2018’s first quarter on a per-share basis before falling 5.3% through the third quarter of this year, according to Bloomberg News’s David Wilson. S&P 500 companies have bought back the equivalent of 22% of their market value since 2010, the Societe Generale strategists noted in their report.CHILEAN CRISIS ENTERS NEW PHASEThe chaos in Chile, long known as the safest bet in Latin America, has become so bad that not even direct intervention by the nation’s central bank was able to reverse the slide in the peso. The currency fell about 1% Thursday, bringing its slide to 11.4% since mid-October. That’s the worst of the 31 major currencies tracked by Bloomberg and more than five times the next biggest loser, the Hungarian forint. What should have investors worried is that the peso depreciated even after the central bank announced a $4 billion currency swap program to ease liquidity in the market amid the worst civil unrest in a generation. “I don’t think it will help stop the sell-off in any way,” Brendan McKenna, a currency strategist at Wells Fargo, told Bloomberg News in reference to the swaps program. “There has to be some breakthrough on the political front for the currency to stabilize.” Foreign investors have been especially rattled since the government said Sunday that it backed plans to rewrite the constitution in response to four weeks of riots and protests in support of better pensions, wages, education and health care. If that were to happen, it’s possible the government would swing too far to the populist left to the detriment of the economy. FOLLOW THE CLIMATE CHANGE MONEYDespite the overwhelming evidence about climate change, there is still an alarming number of deniers. But if it was really all a big hoax or overblown, then why are the world’s biggest, most influential investment firms steering away from areas that are likely to be hit the hardest, such as the coasts? Goldman Sachs Group Inc. is considering real estate markets including Denver; Austin, Texas; and Nashville, Jeffrey Fine, a managing director at the firm’s merchant-banking division, said Thursday at a conference hosted by the NYU School of Professional Studies. Fine may not have specifically cited climate change, but according to Bloomberg News’s Gillian Tan, he did note that more companies and young people are moving away from the coasts. The Fed held its first conference on climate change last week in San Francisco, with one central bank official saying it has the potential to “displace people permanently” amid damaging wildfires in California and storms punishing the Eastern Seaboard. About 3 billion people — or some 40 percent of the world’s population — live within 200 kilometers (124 miles) of a coastline, according to Bloomberg News. It’s projected that by 2050 more than 1 billion will live directly at the water’s edge.TEA LEAVESThe idea that the U.S. consumer was strong and carrying the economy took a hit a month ago when Commerce Department data showed that retail sales in September fell unexpectedly. The 0.3% decline from August was directly opposite the 0.3% advance expected based on the median estimate of economists surveyed by Bloomberg. That’s why Friday’s update from the government on October retail sales is so critical, especially heading into the holiday sales season. Economists are calling for a 0.2% rebound. Bloomberg Economics isn’t so optimistic, saying that decelerating wage growth suggests household demand will moderate. It is forecasting no change in spending. Although the headline number will get the attention, the smart money will be looking at sales among a control group that are used to calculate GDP and exclude food services, auto dealers, building-material stores and gas stations. By that measure, sales are seen rising 0.3% from no change in September.DON’T MISS Stock Investors Could Use a Refresher on the Basics: Nir Kaissar You Care About Earnings? The Stock Market Doesn’t: John Authers Too Many Young American Men Still Aren’t Working: Justin Fox Brazil’s Politics and Economics Are Growing Apart: Mac Margolis Matt Levine's Money Stuff: You Can Buy Almost All the StocksTo contact the author of this story: Robert Burgess at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The benchmark S&P 500 stock index posted a slim gain to end with a record closing high on Thursday, as a dour forecast from tech stalwart Cisco Systems was offset by a strong report from big box retailer Walmart. The Dow index ended barely negative, after posting a closing high on Wednesday, while the Nasdaq also ended fractionally lower.
Wall Street's main indexes slipped from near record levels on Thursday, as a dour forecast from tech stalwart Cisco Systems raised fresh questions about the global economy's health and overshadowed a strong report from big box retailer Walmart. Cisco shares tumbled 7.8% after the network gear maker forecast second-quarter revenue and profit below expectations as increasing global economic uncertainties kept clients away from spending more on its routers and switches.
The latest U.S.-China trade war setback. Walmart's blowout quarterly earnings and early Disney+ success. Other quarterly results. And why Douglas Dynamics (PLOW) is a Zacks Rank 1 (Strong Buy) stock at the moment...
U.S. stocks dipped on Thursday, weighed down by technology shares after Cisco's weak forecast raised worries of a slowdown in global economic growth, overshadowing strong results from big box retailer Walmart. The pullback in the benchmark S&P 500 and blue-chip Dow Jones Industrial Average came a day after they closed at record highs. Cisco Systems Inc tumbled 7.7% after it warned current-quarter revenue would drop 3% to 5% amid declining global spending on its routers and switches, some of which are made in China.
Cisco Systems dampened investors' mood when it reported first-quarter fiscal 2020 results as it sparked fears of a slowdown in global tech spending with a bleak outlook.
Investing.com – Wall Street was slightly lower on Thursday as concerns about global economic slowdown and a reported snag in U.S.-China trade discussions sent a wave of worry through the market.
GW Pharmaceuticals, NetGear, Cisco Systems and NetApp highlighted as Zacks Bull and Bear of the Day
The S&P 500 and the Dow Jones Industrial Average looked set to retreat from record levels on Thursday, as weak data from major economies and a dour forecast from Cisco rekindled fears of a global slowdown. Cisco Systems Inc fell 5.9% after the network gear maker said current-quarter revenue would fall 3% to 5% amid declining global spending on its routers and switches, some of which are made in China.
U.S. stock index futures slipped slightly on Thursday, a day after the S&P 500 and the Dow closed at record highs, as weak Chinese economic data and a dour forecast from Cisco rekindled fears of a global slowdown. Cisco Systems Inc fell 5.6% after the network gear maker said current-quarter revenue would fall 3% to 5% amid declining global spending on its routers and switches, some of which are made in China.
Investing.com - U.S. futures fell on Thursday, after reports that trade talks with China have hit a snag on Chinese purchases of U.S. farm products, amid other concerns.
Particularly weak economic data weighed on the risk appetite early on, with a busy day of stats likely to test the markets further in the day.
While Cisco (CSCO) beat on both top and bottom lines, next quarter guidance was lowered. NetApp (NTAP) beat on the bottom line was missed on the top.
(Bloomberg) -- Cisco Systems Inc. gave a quarterly sales forecast that fell far short of projections, signaling that companies are postponing hardware purchases amid global political and economic uncertainty, including the China-U.S. trade standoff. Shares fell more than 4% in extended trading.Revenue in the fiscal second quarter will decline 3% to 5% from the same period a year earlier, the San Jose, California-based company said Wednesday in a statement. That indicates sales of about $11.9 billion, compared with an average of analysts’ estimates of $12.8 billion, according to data compiled by Bloomberg. Adjusted profit will be 75 cents to 77 cents a share, also missing analysts’ predictions.Chief Executive Officer Chuck Robbins is transitioning Cisco into more of a networking software and services company. While that push is delivering results -- helped by a slew of acquisitions -- the company still gets the majority of sales from machines that are the backbone of the internet and corporate networks.“Just go around the world and you see what’s happening in Hong Kong, you look at China, what’s happening in D.C., you’ve got Brexit, uncertainty in Latin America,” Robbins said during a conference call with analysts. “Business confidence suffers when there’s lack of clarity and there’s been a lack of clarity for so long that it’s finally come into play.”If sales drop as projected, it would be Cisco’s first quarterly year-over-year revenue decline in two years.Cisco shares declined to a low of $45.12 in extended trading after earlier closing at $48.46 in New York. The stock has gained 12% this year.Fiscal first-quarter net income fell to $2.93 billion, or 68 cents a share, from $3.55 billion, or 77 cents, a year earlier. Revenue gained less than 1% to $13.2 billion. Excluding certain items, Cisco posted profit of 84 cents a share.Cisco has said that the biggest drag on its earnings are cable companies that are trying to extend the life of their existing gear rather than buying new equipment. Adding to that slowdown, a big chunk of spending by phone-service providers is on the early deployment of 5G, or fifth generation, cellular networks. That’s mainly for the base station radio towers that Cisco doesn’t sell. Its gear will be needed later when traffic picks up in data centers.Cisco’s hardware business generated sales of $7.54 billion in the period ended Oct. 26, a drop of 1% from a year earlier. Applications, its software unit, gained 6% to $1.5 billion and security revenue jumped 22% to $815 million.Cisco is the biggest maker of routers, switches and other gear used to connect computers. About 60% of revenue comes from the Americas region. The company gets a tiny percentage of sales from China, where it has been largely locked out of the market. Chief Financial Officer Kelly Kramer said Cisco’s business in China decreased 31% in the quarter, accelerating a downward trend.(Updates with comments from CEO in the fourth paragraph)To contact the reporters on this story: Ian King in San Francisco at firstname.lastname@example.org;Nico Grant in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Cisco (CSCO) delivered earnings and revenue surprises of 3.70% and 0.64%, respectively, for the quarter ended October 2019. Do the numbers hold clues to what lies ahead for the stock?
Shares of the company fell 5% to $46.01 after bell as investors worry over the growth of the network gear maker, which has been shifting its focus to cyber security and software. Cisco said in August U.S. tariffs along with Chinese customers shunning its network gear were hurting its business. Total product orders fell 4% in the first quarter, with product orders in Asia Pacific, Japan and China region slipping 5%, Cisco said.