The market was caught up in the excitement of Yellen early in the day but traders are taking some time to digest the negative comments on the economy from Wal-Mart and Cisco.
Wal-Mart lowered its full-year guidance to $5.01-$5.11 compared to its August forecast of $5.10-$5.30.
Comments on the economy from CEO Mike Duke and other executives:
- Traffic remained sluggish throughout the quarter
- Said “a challenging global economy” hurt sales growth in the quarter
- “slow growth macroeconomic environment is persisting through the first month of this quarter”
Morgan Stanley analysts said year’s holiday season is likely to be the worst since 2008.
One good slice of news may be for GBP as Wal-Mart pledged to open 100 outlets at gas stations there and invest £400m.
At Cisco, CEO John Chambers wasn’t as candid as usual on the economy but addressed the shutdown:
“The shutdown, debt ceiling negotiations and delay of key decisions exasperated the lack of confidence among business leaders we had highlighted over the past few quarters,” Chambers said in a conference call.
Cisco CFO Frank Calderoni warned economic weakness could continue, “Based on what we saw in the month of October and continuing into November and how pervasive it was, we’re not expecting things to turn around quickly [in emerging markets.”
Some analysts question Cisco’s willingness to blame the macro economy saying competitors are beating them on some products.
These comments don’t jive with other commentary and economic data but these companies have great real-time data and are among the best at seeing through the noise to the core of the economy.
