Hi Andreas,
IMHO, based on the article Cap posted and this article, we could be in a heap o' trouble if Big Al doesn't do a
large cut. Most analysts state that the rates take 9-12 months to work into the system, so I believe that the first half will be slow to flat with the latter half picking up . With defensive stocks as well as tech stocks taking a hit, perhaps financial and energy/ oil is the place to be.
I also watch Cavuto, Wall Street Week, Bulls and Bears, Wall Street with Consuelo Mack, as well as a variety of
other business shows and one thing I can say for sure...NOBODY is correct all of the time and what is good today
seems to be bad tomorrow. This analyst says stay away from JSDU and another says buy, it is growing rapidly and the future of fiber optics. Buy GE, oh no, GE is overvalued and the numbers are being manipulated etc.
There are some major earnings this week and could set the pace but starting off with warnings from CSCO and apparently PG to start the week doesn't look too good.
Regards,
hio
Top Financial News
01/28 15:08
Cisco Jan. Business `Slow' on Economy Slump, CEO
Says (Update1)
By Tom Giles
Davos, Switzerland, Jan. 28 (Bloomberg) -- Cisco Systems Inc.'s business in
January was slow as a U.S. economic slump prompted customers of the world's
largest Internet equipment maker to reduce spending, said Chief Executive John
Chambers.
The range of estimates of the company's fiscal year growth should be wider than
previously expected, he added.
``Business in January was a little bit slow,'' Chambers said in a briefing for
journalists during the annual meeting of the World Economic Forum. ``The
business momentum of most of my customers was very tough in December, and
equally tough in January.''
In recent months, several Cisco rivals, including Foundry Networks Inc. and
Efficient Networks Inc., lowered profit and sales forecasts or fell short of
expectations as spending for telecommunications services and equipment
slowed.
Chambers told journalists that Cisco's staff growth rate will slow ``dramatically'' in
the coming months and the company may need to put off some expansion plans
until the economic slowdown - - which he says may be a ``two-quarter
phenomenon'' -- ends.
Chambers said in early January that the second quarter, which ends Jan. 27,
was ``a little bit more challenging'' than expected and that he was looking for ``a
wider range of estimates'' from analysts. Cisco's fiscal year runs from August to
July.
Today, he said, ``We're going to get a pretty wide range of estimates in terms of
what may occur in the market.'' That range is going to be ``wider than we said'' in
early January. He did not provide a target.
Revenue Target
``I have said that in economies that are growing reasonably well, (Cisco) will grow
30 to 50 percent,'' he said. ``In economies that slow, we will go below 30 to 50
percent. And we may go negative if it's a slowdown that's very rough, that lasts a
long period of time.''
When asked whether that implies Cisco may miss that target this fiscal year,
spokeswoman Abby Smith said ``you could infer that.''
Chambers later said analysts expect the company to meet its target but declined
to comment on his own expectations for this year.
Cisco's staff growth rate will slow and the company may delay some expansion
plans, Chambers said.
``You will now see (staff growth) slow dramatically and we will only start to grow
staff after we see the economy in the U.S. coming back out,'' he said. ``We're not
cutting jobs.''
``We're being a little more selective and more careful about headcount allocation
with'' plans for expansion, he said. ``Maybe not try to run quite as fast, as early -
or maybe say here is my target acquisition but do it one quarter later.''
``Are we being more careful about our expenses -- yes,'' he said.
Fed Help
Federal Reserve policymakers, who meet to decide on interest rates this week,
are likely to cut the overnight inter-bank lending rate by a quarter point, he said.
``I'd be extremely disappointed and almost shocked'' if the Fed doesn't cut rates,
he said. If U.S. policymakers don't ``move quickly, the slowdown will translate to
the rest of the world.''
Chambers also said he's confident U.S. President George W. Bush will be able
to achieve projected tax reductions.
``He's going to get that through,'' he said. ``The question is what size. We have
got to get consumer confidence up.''
Following Chambers' January comments, made at the Morgan Stanley Dean
Witter Internet, Software & Networking Conference in Scottsdale, Arizona, some
analysts revised down their estimates for the company's fiscal year earnings.
Morgan Stanley Dean Witter & Co. analyst Chris Stix said he expected Cisco to
earn 77 cents a share and have revenue of $28.6 billion in the fiscal year ending
July 28, down from a previous forecast of 79 cents and $30 billion. Profit
estimates from Wall Street analysts exclude acquisition and stock-option costs,
investment gains and losses. |
