This transcript is automatically generated
Should you be paying closer attention to Cisco's warning about its cautious customers Phil Orlando chief equity market strategist at Federated Investors.
-- just 34 billion dollars in assets and look at Cisco stock Dow component down 9% which should we because we.
-- all these economic numbers each and every day.
That to me says.
Look out because this economy could be at a tipping point where you have cautious business customers that -- well negative and that could become a vicious cycle you.
You've got a couple of issues here the first is that Cisco is an important technology Bellwether.
The second is that they're CEO John chambers of someone who is.
Had the reputation of being something of an industry -- Also up or down when John Chambers starts talking about the next couple of quarters look really go to the next couple quarters might be a little sloppy.
Investors and other technology.
People sort of sit up and take notes.
Well how much of that other potential negative environment.
Is factored in -- stocks at this point.
Well I think a lot of it I mean our forecast has been no we would enter an economic soft patch during calendar at least the first half a counterpoint twelve.
First -- first quarter GDP was 2.2 percent vs 3% in the fourth quarter.
Though the stock market is down five to 10% year over the last month or so -- think to some degree this has been anticipated -- Investors -- -- president what about the potential that if you you have a cautious business customer.
And that any thing could make that much worse that it becomes a self fulfilling cycle of negativity that caution turns into.
Something that is.
More worse -- not only for businesses but also our overall economy certainly the negative or positive feedback -- is something you've got to watch out for and right now the concern -- to the downside that we saw sloppy first quarter and and does that continue throughout the year does a potentially roll over it would double dip recession.
But I it think it's he'll think I don't know what we are not forecasting a double dip recession we think for example -- the weakness in employment data we've seen over the last couple of months as transitory.
Those data points we think -- gonna firm in the next couple of months in the economy's gonna do they -- little bit of that jobless we absolutely did the claims number this morning was very important.
These numbers around 350 in mid February they spiked to just under 400000 a couple weeks ago.
That was largely related we think to the seasonal distortions.
Not related to the Easter passover holidays that's now out of the numbers.
Energy prices are down about 12% year over the last couple of months the winter weather issues are starting to fade.
So we think we're gonna start to see some job numbers improve over the next few months from the very sloppy numbers we saw in in in March and April would you buy.
Any fixed income at this point because of people who managed fixed income assets Bob -- were from vanguard yesterday.
And from BlackRock.
They don't really see any kind of value across the spectrum of fixed well.
Who we would draw distinction there we see no value in treasury securities we think investors and our treasury bubble right now.
And at 185 or so we think those yields are going higher we do however like corporates and spread product like junk bond so.
Those we think there's some pretty good value they're still feel good to talk to at a alright Phil Orlando all ever -- and stocks and.