What'd You Miss? Hyundai-Google Talks, Cisco Restructuring Plans & More (Full Show - 08/17/16)

TL;DR

U.S. stocks rise amid Fed minutes and Cisco's restructuring.

Transcript

foreign mix this afternoon treasury treasuries rallying after the release of the FED minutes the question is what'd you miss U.S stocks are hovering your all-time record highs we speak with one technical strategist who says a four to five percent pullback does appear likely plus fed officials were divided in July over the urgency of another raid hi... Read More

Key Insights

• The Fed minutes revealed a split among officials about the urgency of a rate hike, impacting market perceptions and leading to a rally in U.S. stocks.
• Cisco announced plans to cut 5,500 jobs as part of its restructuring, focusing on security and cloud services to adapt to industry changes.
• Emerging markets have shown significant performance, driven by a global yield chase rather than fundamental improvements.
• The U.S. dollar fell against the euro post-Fed minutes, indicating a perceived dovish stance and pushing back rate hike expectations.
• Mongolia's currency, the tugrik, is the worst performing currency this month, correlating with declines in copper prices.
• Target reported a drop in same-store sales for the first time since 2014, reflecting broader challenges in the retail sector.
• The U.S. crude oil output has surged, with the largest increase since 2015, despite low prices and a recovering rig count.
• Donald Trump's campaign underwent a significant shake-up, appointing new leadership to refocus on his outsider message against the establishment.

Questions & Answers

Q: What was the market reaction to the Fed minutes?

The market reacted positively to the Fed minutes, with U.S. stocks rising and the dollar falling. The minutes revealed a split among Fed officials regarding the urgency of a rate hike, leading investors to perceive a dovish stance and pushing back expectations of an imminent rate increase.

Q: Why is Cisco cutting jobs and what is their focus moving forward?

Cisco is cutting 5,500 jobs as part of a restructuring effort to focus on higher-margin areas like security, data centers, and cloud services. This move is a response to shifting industry trends towards software-based systems, which have undercut traditional hardware sales growth.

Q: How have emerging markets performed recently and what is driving this performance?

Emerging markets have shown significant performance gains, largely driven by a global yield chase rather than fundamental economic improvements. Investors are seeking higher returns in a low-interest-rate environment, which has bolstered emerging market assets.

Q: What factors have contributed to the decline of the Mongolian tugrik?

The Mongolian tugrik has declined significantly, correlating with a drop in copper prices, a key export for Mongolia. Additionally, concerns over China's economic slowdown and Mongolia's inconsistent investment policies have deterred foreign investment, exacerbating the currency's decline.

Q: What challenges is Target facing in the retail sector?

Target reported its first quarterly same-store sales drop since 2014, reflecting challenges in the retail sector. The decline is attributed to changing consumer preferences and increased competition from online retailers, which have pressured traditional brick-and-mortar stores.

Q: What is the significance of the U.S. crude oil output increase?

The U.S. crude oil output has surged, marking the largest increase since 2015. This rise in production comes despite low oil prices and is supported by a recovering rig count, indicating that U.S. shale producers are ramping up activity to take advantage of any price recovery.

Q: How has Donald Trump adjusted his campaign strategy?

Donald Trump has restructured his campaign leadership, appointing new executives to refocus on his outsider message against the establishment. This move aims to consolidate his base and appeal to voters dissatisfied with the current political and economic systems.

Q: What impact did the Fed minutes have on the currency markets?

The Fed minutes led to a decline in the U.S. dollar against the euro, as investors interpreted the minutes as dovish due to the split among Fed officials on the timing of a rate hike. This perception reduced the likelihood of an imminent rate increase, affecting currency valuations.

Summary & Key Takeaways

• U.S. stocks rose after the release of the Fed minutes, which showed a split among officials about the urgency of a rate hike. This led to a rally in stocks and a decline in the U.S. dollar, as investors perceived a dovish stance from the Fed.

• Cisco announced it would cut 5,500 jobs as part of its restructuring to focus on security and cloud services. Despite beating earnings estimates, the company faces challenges adapting to industry shifts towards software-based systems.

• Emerging markets have rallied, driven by a global yield chase rather than fundamental improvements. Meanwhile, Mongolia's tugrik has become the worst performing currency this month, heavily impacted by declining copper prices.