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The company gave a solid quarterly report Wednesday, but there were signs of turbulence beyond the headline numbers.
So why the angst?
Beyond the headline numbers Wednesday, there was plenty of signs of turbulence. Cisco's sales in emerging markets were down, and CEO John Chambers said they won't return to growth for several quarters. And there are the layoffs: 6,000 more coming soon, wiping out 8 percent of Cisco's already reduced workforce.
Their record suggests that they are really good at 2 things: Buying high and selling low.
When chaos strikes, the average investor heads for the hills and ends up paying the price in long-term underperformance, says one of Wall Street's most prominent bulls.
As the chart below from Richard Bernstein Advisors shows, mom and pop stink it up on a pretty steady basis and have lagged gains in every asset class, with the exceptions of Asian emerging markets and Japanese equities, over the last 20 years.
The average investor has even managed to underperform cash -- represented in the chart by 3-month T-bills.
"They could have improved performance by simply buying and holding any asset class other than Asian emerging market or Japanese equities," wrote Bernstein, the former Merrill Lynch strategist who now heads his own eponymously named shop. (Read the note here.)
CNBC host Jim Cramer says there are clear tells that investors think the economy is going downhill.
Pros such as Jim Cramer often look to the market for insights on broad sentiment. And certain things happened on Wednesday that suggest trouble is lurking.
The view may not be consistent with Cramer's personal outlook. "This isn't what I think should be happening," Cramer said. "My world view is somewhat at odds (with developments)."
Nonetheless, Cramer doesn't think any investor can make money in the market without first understanding what he calls the "new view."
And according to the "new view," the Street thinks the economy is going downhill.
Here are Cramer's market "tells":
Chains such as Family Dollar have gotten smarter about how to appeal to American consumers, experts say.
In the face of yet another quarter of sluggish profit and sales, superstore Wal-Mart (WMT) announced Thursday morning that its full-year profit will be lower than what it had previously forecast.
And while the company is pointing to costs like investments in e-commerce and higher health care expenses in the U.S. as reason for the lowered guidance, some Wall Street analysts are pointing to the strength in dollar store chains like Family Dollar (FDO), Dollar Tree (DLTR) and Dollar General (DG) as reason for some of Wal-Mart's sales struggles.
Occasionally you can catch bottoms when things are bad, but that doesn't happen until all hope has faded.
Sometimes sentiment isn't enough to make a turn. Sometimes just betting that everyone else is negative isn't enough. Something positive has to happen, too.
We saw this come into play twice Wednesday, first with King Digital (KING) and then with Deere (DE). Going into King Digital, I was struck by what seemed to be a uniformity of thought that the sentiment toward King was too negative so the company's stock might bounce no matter what. But then it reported, and the numbers for the maker of Candy Crush were awful and the outlook worse. The darned thing is now down about 40 percent from where it went public.
Sentiment doesn't help when your company relies on one franchise that is getting long in the tooth. Go ask the people at Zynga (ZNGA), who brought you Farmville and couldn't get beyond it even with the Words and OMG Pop franchises in tow. How many times could you have said "This selling is way overdone, it just can't be this bad"? But it is.
The company is expected to report another loss Thursday afternoon. But analysts are looking for glimmers of hope in the numbers.
Did J.C. Penney's (JCP) journey on the comeback trail hit a bump in the road during the second quarter or is it continuing its return to retail prominence?
That's the critical question investors and analysts will be asking up until Penney reports earnings after the close on Thursday.
The company is expected to report another quarterly loss in adjusted earnings, its 10th straight dating to the first quarter of 2012. But if it can manage to beat projected same-store sales or cut its forecast deficit, Penney could become the darling of more than just a few analysts.
Penney started to regain the trust of a few watchers earlier this year when it reported a first-quarter same-store sales increase of 6.2 percent, far exceeding the 4.1 percent gain that had been projected.
The flop shows the fickle and sometimes confusing nature of Americans when it comes to more healthful eating.
It turns out consumers weren't too satisfied with Burger King's (BKW) Satisfries.
The fast-food chain on Wednesday said it is dropping from its U.S. menus the lower-calorie French fries (pictured) that it introduced with much fanfare less than a year ago.
The Miami company had been trying to reach consumers who had cut back on French fry orders because of health concerns. The fries, which were made with a less-porous batter that didn't absorb as much oil during frying, were marketed as containing 20 percent fewer calories and 25 percent less fat than Burger King's classic fries, and 30 percent fewer calories and 40 percent less fat than McDonald's (MCD) fries. The smallest portion of Satisfries contained 190 calories.
Earnings are out, and the world's largest retailer had a disappointing quarter.
Wal-Mart (WMT) delivered a knockout punch to already bruised investors Thursday in the form of sluggish second-quarter earnings and a full-year earnings warning.
The details of the quarter and outlook should worry even the most long-term investor.
Wal-Mart, which my firm Belus Capital Advisors rates a sell, announced second-quarter earnings of $1.21, in line to Wall Street estimates, and the mid-range of its $1.15 to $1.25 per share guidance.
However, the profit figure could be viewed by the market as disappointing as Wal-Mart issued below-consensus guidance when it reported first-quarter earnings back on May 15. At the time, Wal-Mart's $1.15 to $1.21 per share guidance was below the then consensus forecast of $1.28.
Demand for company's network routers and switches continues to decline.
Cisco Systems (CSCO) is cutting 6,000 jobs, or 8 percent of its workforce, as it faces weakness in emerging markets and a slump in demand from telecommunications-service providers.
The world's largest networking-equipment maker had about 75,000 staff at the end of July. Including the latest round, Cisco has eliminated more than 18,000 employees over the past three years.
John Chambers, who is nearing retirement after almost two decades as Cisco's chief executive officer, has been grappling with slowing growth for its market-leading routers and switches. Phone carriers and other large companies are replacing legacy network hardware with software that performs many of the same tasks.
Consumers are shunning the spud in a race away from carbohydrates and toward greater convenience.
The potato has had a great run for most of the past five centuries. But these days, the humble spud has fallen on hard times.
A darling of American dinner tables since before the nation's founding, potatoes have lost favor in the U.S. for the past two decades.
Consumers have shunned the starchy side dish in a race away from carbohydrates and toward greater convenience, two factors driving broad changes in how Americans eat.
Total annual consumption of all types of potatoes has fallen by nearly 25 percent since peaking in 1996, to 52 pounds a person in 2012, the last year for which the U.S. Department of Agriculture has data.
The retailer is set to announce its quarter Thursday morning. Can it overcome a long slide in US sales?
Investors will be keeping a close eye on Wal-Mart's (WMT) quarterly earnings Thursday morning, searching for signs of the company's progress in a shaky economic recovery.
Life hasn't been easy for the nation's largest retailer this year. Same-store sales at U.S. locations have slid for five straight quarters, leading analysts at UBS (UBS) in June to remove Wal-Mart from their "Most Preferred List." On July 29, analysts at Goldman Sachs (GS) downgraded the stock to "neutral" from "buy."
Government data showed in June that food stamp usage has fallen from its 2012 peak. It is unclear how this data set will play out for Wal-Mart in the coming quarters, considering the chain has captured an estimated 18 percent of the SNAP (food stamps program) market.
Also adding to Wal-Mart's woes during the quarter is the fact that its former U.S. president, Bill Simon, said that the country's hiring rebound is not translating to a rise in customer spending at its stores. Simon added that the economy is "not getting any better or worse" for its core customers.
It's not a laundry or dry-cleaning gadget. Instead, the $500 device is meant to delay laundering or dry cleaning.
Swash is a new release from the consumer-products giant, maker of Tide and Febreze, in partnership with Whirlpool (WHR). The tall and thin device, which is large enough to hold one men's extra-large suit jacket, uses gel-filled pods to help neutralize odors, remove wrinkles and restore a garment's fit.
It isn't meant to replace laundering or dry cleaning, the companies say, just delay them. That convenience comes with a hefty price tag: $499 for the machine, plus $6.99 for a 12-pack of pods, each good for one use only. The machine is sold at Bloomingdale's and will be available next month at other retailers.
The signals are there, but investors don't yet seem ready for a dose of reality.
All bull markets end eventually, either with a whimper or a bang, although no one can say when.
The good news is that if you are observant, a number of clues announce the end is near.
One of the reasons I've become cautious about this five-year bull market is I'm seeing warning signals, including the following four:
1. Rallies fizzle quickly
Many investors got excited when the market rallied 185 points last Friday. But if you looked deeper, you'd understand the spike wasn't as strong as it seemed.
Some market watchers believe the softness could be signaling something more sinister.
The price of Brent crude slipped to a 13-month low on Wednesday, pushed lower by reports of oversupply in the markets.
However, some market watchers believe that this softness could be signaling something more sinister in the global economy, with a risk that the weakness could spread to other assets.
"At the end of the day it's all about demand," Michael Hewson, the chief market analyst at brokerage firm CMC Markets told CNBC via telephone. The oil price is simply a leading indicator for demand across the globe, according to Hewson, who predicts the price has more downside risk than upside, barring any unexpected geopolitical event.
He agrees that current global growth forecasts may be too optimistic and depressed demand in Europe and China, along with the anticipated normalization of interest rates in the U.S. and the U.K., could be about to bring investors back down to earth.
The networking company surprised Wall Street with stellar numbers in its last earnings report. Investors will be watching for more of the same Wednesday.
Investors will look for signs that would confirm Cisco's strong performance the previous quarter is a sign that the tech powerhouse is on the comeback trail.
Here's what investors can expect:
Cisco is expected to post profit of 53 cents a share, compared with a profit of a 52 cents a share for the year-earlier period, according to a survey of analysts conducted by FactSet.
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[BRIEFING.COM] The stock market ended the midweek session on a mixed note. Blue chip listings bolstered the Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%), while the Russell 2000 (-0.4%) and Nasdaq Composite (-0.02%) underperformed.
Equity indices began the day in the red, but wasted no time regaining their flat lines. Small-cap stocks were not as fortunate as the Russell 2000 spent the day in the red.
Upon returning into positive territory, the key indices were ... More
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