Cisco doesn't inspire a tech stock rally
But it makes sense that no other stock follows it higher.
Can Cisco (CSCO) matter? Can Cisco play any more role of taking us higher than Home Depot (HD) did? Or Kors (KORS)? Or Dick's (DKS)? Can it lift the market after days of morass and quagmire even as those high-profile retail plays with good numbers couldn't?
Welcome to the world of pin inaction. As Cisco traded up Tuesday night I kept checking out all the usual tech subjects to see who was moving up in a correlative fashion. It was rather amazing. The only stock I saw people taking was Broadcom (BRCM), and that's because, somehow, even as Broadcom's main business, some 50%, is smartphone, people view it as a cable box company and Cisco makes cable boxes. So Broadcom, which had been brought down when it should have traded up when its true analogue Qualcomm (QCOM) reported its terrific numbers, is now going to get its due. I suspect the shorts, who had been leaning on this one betting Cisco would have a subpar number, will now have to scramble and cover.
But there was no other pin action in tech that I could see. Microsoft (MSFT), which had been going down already looked to have another teeny downdraft off of some more personnel changes. Intel (INTC) had no lift. That stock's at a 52-week-low. It didn't impact Apple (AAPL) and even though Cisco reiterated its bullishness about the Internet, I didn't see any Google (GOOG) buying. Facebook's (FB) caught up in the secondary, although I am inclined to buy that stock here because it has the growth that everyone else seems to sorely lack. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
I could argue that EMC (EMC) should go up as Cisco called them out as a good partner, but they didn't call them out as a partner who was killing it with them. The business that drove this quarter was largely telco, and that doesn't include EMC, although EMC storage from burgeoning big data did get mentioned positively.
But there was a takeaway that can be acted on. CEO John Chambers took aim at Hewlett-Packard (HPQ), Huawei and Juniper (JNPR) and pretty much said that he had crushed them this quarter. He mentioned that 18 months ago everyone thought they these three were "eating (Cisco's) lunch." Now he said they are all losing share to his company. "We're beating them all."
To me, that means that you have to sell Juniper ahead of its quarter and you can continue to short Hewlett-Packard as that company is getting killed in personal computers, in printers and in consulting (IBM, (IBM) Accenture (ACN) and SAP (SAP)) and truly has no leg to stand on or, at this point, raison d'etre.
While Cisco clearly had a good quarter, certainly better than what I was expecting, what has made the stock reaction so strong is the comments made by five firms, JP Morgan, Opco, Wells Fargo, Wedbush and Jefferies, all of which said negative things about the environment and the guidance they expected Cisco to give. Frankly, I figured all five couldn't have been wrong. But they were. Totally and completely wrong and in a way they, not Cisco, will provide the biggest lift to the stock today.
So, it makes sense that no other stock follows it. Cisco did well despite the economic backdrop and because other companies in its industry faltered. The way to play the strength in Cisco? I would say Cisco, but this stock gets all its moves in a very limited period of time and to me, it just made this quarter's move already.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long AAPL and EMC.
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Hard to place buy orders now. Big layoffs hitting the defense industries and layoffs popping up elsewhere. Just like 2009. Best to hold off until the end of January.
A great example: Lowe's is up because a hurricane devastated the East Coast. When media tells that thousands of cars were destroyed too- the **** class jumps into auto makers but there are zillions of Toyota Priuses already on their way WHILE a major recall is occurring. See... this is financial stupidity. Name ONE publicly traded enterprise rebuilding a factory to make the stuff they shipped overseas so they could import it and cut off American workers? You won't find one. In fact you won't find anyone being proactive to avert getting their butts tossed out of the country. Financial strangulation is over. YOU will be poor before you know it, but... you knew that.
I'll re-iterate that the idea of higher taxes alone is not enough or will fix what ails us.
Administrators, lawyers, bankers, politicians and business inheritors all are well-off or rich but not by effort, more like by station.
Families, labor & small business are suppressed and impoverished. Flat out... those who take have taken too much and MUST give back. You say- one issue at a time but while Congress took six months off, America was impaled on what BIG has stuck us with-- debt and NO job recovery. It is only FICTION that people are lazy and cannot find work. It is TRUTH that a tier class separation is behind it and blockading has destroyed us.
WHY are there no bankers in JAIL? WHERE does the money come from that is used to puff the markets up in the morning and are recalled after 3pm? WHERE are the lenders that are critical to the credit and housing mess corrections? Bankers are not lenders. Harvard U cannot produce a person capable of fixing what bankers have abused. Are we to WAIT on 12/21/12 and be "surprised" or are YOU going to do more than 'propose'? We want SOLUTIONS. If Congress is stalemated by that Norquist Pledge, arrest those who signed it and send them to GITMO. We don't tolerate terrorism in America, even if it's in Congress.
Hard work isn't paying. Corruption is. If you want Americans to swing over to the dark side and fry up some grubbers and inheritors... so be it. If you would prefer more integrity... tell Boehner to DO IT NOW and tell McConnell to resign.
Beginning IMMEDIATELY, a list of lobbies who are in contact with elected Officials is to be put on major media websites with blog (not social network gimmick) access for comments. Time to tell members of Congress who are not sweating out progress, where they can go and how fast. I PAY TAXES on 70% LESS INCOME than I once had. No one has helped us in 4 years now. It isn't about 47%, its about deadbeats who take and have ruined. DO YOUR JOB, DESTROY WHAT DESTROYS AMERICA.
The markets are not taking kindly to the President's comments regarding tax cuts. Here we go.
"A modest tax increase on the wealthy is not going to break their backs. They'll still be wealthy."
The President actually said that.
I`m buying stocks big time.With so many people being beari**** time to man up and buy.In
early 2000 everybody was bullish and we know what happened then.I see screaming buys!!!
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Some investment advisers are entertaining that possibility, especially in light of Monday's triple-digit loss in the Dow.
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