CSCO is not playing with the split effect , but the "Rate Cut Effect " in September and October. After the long weekend, the market will start the uptrend again in anticipation of the rate cut in the comming months, this time it will be 0.25% first , and followed with another .25% in November or early next year. The value of dollar is just too high comparing with the currency of the rest of the world, this will make the US corp less competitive in the world market, and also increase the cost of capital
of US corp and make them less competitive. By the rate cut, the consumers' confidence will be maintained or increased, which will resolve the current problem of glut of products in the market , and as a result , the profit margin can be maintained. SO, the
supply and demand will come to a balance by doing so, i.e the rate cut. Now we have
too much capacity of production, but the consumption did not follow up, we lost the balance from here, i.e "SUPPLY and DEMAND", that is dangerous !!!!!!!!!!!! |
