S p 500 also at a new ale time high of 1781, up 14. 25 points. The dow and s p closing at alltime highs. Bob, this meltup keeps happening. Dow jones industrial average, we were weak throughout the morning. Frankly going into european close around noon it started lifting. Not a lot of big macro news out there but Janet Yellens testimony tomorrow creating considerable question. May be more dovish than some anticipated. We dont have that testimony yet, but that was a source of a lot of speculation today. A lot of groups that have beaten up, moved to the upside. Good news on the fundamentals on retailers, macys had a terrific day. 3. 5 same comp sales moves. Nordstrom reporting tomorrow. Walmart also reporting as well as kohls tomorrow. Internet stock, high beta names moved up but emerging markets down again. Seven, eight, nine days in a row they are been to the downside. Many down double dijs over the last two weeks. A rare ipo disappointment. Its been a great ipo run. Not today for chegg, Online College textbook. They priced above the range at 12. 50. Closed to the lows of the day. Down 22 . We have not seen many disappoints in ipos. Extended stay, big hotel chain, they did better. Priced at 20 apiece and basically held up throughout the day, ending up about 20 . Back to you. Thank you so much. Want to talk about this meltup that continues. Joining us right now to talk more about markets, brian, nath nathan, Michele Perry higgins author the everything binder. Thank you for joining us. Thank you. Michelle, let me kick it off with you. Talk to us about who is buying this market. Got a market at an alltime high tonight. 70 points higher on Dow Jones Industrial average. Is this institutional or retail or both . I think its a little of both, maria. The retail side, theyve had a confusing year, as you look at whats going on right now. Weve seen historical highs on equities, our fixed income, alternative space not such a great year. I have those retailers on the sidelines who are wanting to jump in right now and are excited to jump in. They think they might have missed the party. But i would say be very cautious. Yeah. I mean, we talked to the ceo of schwab, nathan, this week, and he basically said, im not seeing it . Im not seeing the individual investor back in this market. What do you think . I agree with you. I wont see it either. Its not like people are rushing around to go into the stock market. Many people who got in the stock market, which would make a case against timing, have found this an incredibly frustrating five years to think about how will i get back in . I think all we saw today in the market, maria, is that we took a look in europe and we went, boy, theyre going to give away money. In fact, youre going to theyre going to lose a little money on these transactions with new negative Interest Rate but make it up one volume. I think that will be good for u. S. Corporations because theyre going to get about 20 of our business comes from overseas. Well, ron, what do you think . Whats behind this meltup that were seeing in stocks . All time highs tonight. Are you expecting that, you know, sentiment is changing, Getting Better on the heals of the better than expected Economic Data weve seen recently . And, of course, retail catching a real bid. One thing thats not talked about is just the structural benefit that equities have. Share shrinkage is a huge thing going on. In the s p 500, for instance, the total amount of shares outstanding is lower than where it was ten years ago. Yet we have seen a little bit of demand from institutionals and from retail pick up. We estimate on our model, our quantitative model, that that could be responsible for at least 6 to 7 of next years lift. Okay. And, brian, in terms of the broad economy right now, what are you seeing . How would you characterize things . Things continue to get gradually better. Its a noninflationary lackluster expansion. And i think for a lot of investors that have been looking for the ab absolutes of good, what they fail to recognize as things continue to get better, the stock market can continue to climb higher. Weve heard a lot of reasons for the last number of years with regards to the macro picture or with regards to political back drop of why investors dont want to be in these markets. Quite frankly, it created at times very compelling investment opportunities. What the markets now reflecting is this has been a normalization to average or slightly above average valuations depending on which metric you look at. But what investors are recognizing is things continue to get modestly better and stocks continue to appear cheap to generally most other asset classes. Well, you know, were waiting on cisco earnings. Theyll be out any minute, by the way. The stock is trading down right now. Were waiting there. Go ahead, nathan. Maria, this market is like our president. Its proven well pay any price. But 1. 1 trillion of quantitative easingen yellen cost us 440,000 a job. Thats how you keep the economy moving. How we transition from qe3 to a lower unemployment target, which is what i think will be what all the discussions are about today, thats really whether or not we can sustain where we are. Hold on one second. Cisco numbers are out. First quarter, 5 3 cents versus estimate of 51 cents. Jon fortt has numbers. Looks like revenue is a bit light. Some expected given the federal government shutdown. That 16 days will hurt. Revenue comes in at 12. 09 billion versus 12. 034 billion expected. Service revenue is in at 2. 6 billion. Some estimates i had seen had services coming in around 2. 7 versus that 2. 69. Looks Like Services revenue is light. Well have to wait to see exactly how it breaks down between switching, ngn routing, video collaboration, all of those, for the call. I have to do a calculation to get gross margin. The street was looking for around 61. 9 gross margin. Ill be able to, perhaps, calculate that for you in a few seconds. Right now the story looks to be the revenue shortfall will get guidance on the call, maria. We want to hear from eric right now. Thank you, jon. Well keep following that. We have analyst reaction right now. Eric, Senior Research analyst. Another headline, company is increasing buy back program, 15 billion boost in the stock buyback program. Whats your read on these numbers here . Well, we were expecting a little better on the revenues. From my perspective, ive be been i think that Investor Sentiment could improve quite a bit if we see the company generate better top line growth. Thats really the key to cisco right now. The earnings is good, but the investor focus is on that top line. And Macro Economic issues in there, im sure, but also an issue of the Company Needs to keep on top of trends like the cloud better than what theyve been able to do. What do they need to do . I mean, the cloud i keep hearing this. This is the issue. Are they not positioned well enough for the cloud . Well, it is a challenge because, as as the market moves to cloud technologies, you just get better utilization out of hardwarelike networks and servers. And cisco needs to transition to more of an applicationcentric company. I think they recognize that. But i think investors really need to see them prove it before theyre going to give them a lot of credit for making for making that transition to more of a softwarecentric company. Real quick. The stock is at 23. 42 right here. Bottom line, would you buy the stock at this level or sell it . You know, were at a market perform. I think i would look for other opportunities. We would maybe wait for weakness on this name. Thank you very much. We want to get back to our Market Players here. Michelle perry higgins, nathan, ron, brian leavitt, but jon fortt has more. I have the gross margin number for you. 61. 3 is what i calculate versus 61. 9 expected. Not far off target analysts were looking for but closer to 61 than 6 2, maria. Thank you so much. Brian leavitt, jump in here in terms of the broad economy. What are you seeing . We have revenue a little disappointing from cisco as you heard from eric but well talk to John Chambers momentarily and find out what the quarter looked like. How would you characterize things . In terms of the broad economy, it continues to be too sluggish to please most anyone, but you continue to see modest improvements in Small Business hiring plans, modest improvements in private sector payrolls, jobless claims weighed down. So, its not a its not an economic expansion thats going to excite a lot of people. But whats most important for investors is that this slow growth, modest basically no inflation environment has been very good for stockholders. It doesnt its not necessarily good for those that are unemployed, but its been very good for shareholders of equities. Certainly has not been good for savers. Correct. One issue, michelle. You know, i think its interesting to see the float continuing to shrink. Is that one of the reasons this market has been such a stellar performer . Today, you know, cisco announcing as part of its Earnings Release its going to buy back more stock. How much does that have to do with whats going on, the float shrinking . I dont think thats playing into it in a dramatic way. I think what the bigger issue is, were continuing to just see investors drive into this market and i would say be cautious. Im a little worried about Downside Risk and potential shortterm correction. And i think any new retailer investor needs to potentially be very cautious. Well leave it there. Thanks, everybody. Appreciate your time. Well see you soon. Cisco systems on the move after hours. Network equipment giant out with results moments ago. Cisco ceo John Chambers will speak with me next. Well break down the numbers, give you a sense of the quarter. Also coming up, fixing obama care. We now know that the law is falling well short of the goals of signing people up. Now growing number of Congressional Democrats are pushing the president to do what bill clinton said yesterday, let people keep their plan if they like their plan. But can you do that without undermining the law . John horwitz says no and hes here to explain why. Iron mike tyson is in the house. Well discuss his new tellall book about his rise, fall and rise again. Also talk about his new hbo documentary on how he got off the ropes after bankruptcy and rebuilt his financial life. Hes joining us coming up. The American Dream is of a better future, a confident retirement. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Welcome back. Take a look at cisco shares tonight in extended hours. Weakness there. The Company Reported earnings a few moments ago. We want to get right to it and talk exclusively to the boss. The man in charge is John Chambers, ceo of cisco. Good to have you back on the program. Welcome. Maria, its a pleasure to be with you. We talked in september and it will be interesting to see what correlations we draw. Lets do that right now. Can you characterize the last three months for us . How would you characterize the quarter . Sure. I would characterize the quarter of being almost what we talked about in september in terms of the Global Economy. A lot of positives in it, a couple concerns. The positive on gross margin were 6 1 to 62 was our guidance, we came in at 63 gross margins. Really solid on that. The other positives, record earnings per share in terms of nongap at 53 cents. We were short on revenue. Obviously, thats something we didnt anticipate when you and i talked. And in terms of the Global Economy over the last three months, the u. S. Feels like its just going along kind of being stuck in that 2 , give or take a little bit. The emerging markets are a little more challenging than we anticipated and others anticipated. So, is that really the story here . I mean, the last time we talked, you did say that the emerging markets really were continuing to be a challenge. You saw that again. What is it going to take n your view, to get vibrancy once again in the emerging markets . What are you expecting . Sure. What i think it takes is, first, the u. S. Engine to perform at the level we should be doing, which is 3 to 4 growth. The u. S. Is kind of looked upon around the globe in terms of being the place that has to lead us out of this economic slowdown. Within the emerging markets, as cash begins to flow back into those countries and using my terms, as currency stabilizes versus the dollar, then you begin to get more growth. Emerging markets our focus is very simple. How do we help country leaders create jobs, inclusive jobs across their entire diverse pop laying, health care, education and innovation. John, let me ask you about the cloud. You know, weve had analysts on and shareholders on recently who are showing some concern about ciscos approach to the cloud, that perhaps the company has become too much of an applicationcentric business. What are you doing to really capitalize on whats happening in the cloud right now in terms of your business . Sure. If you watch the cloud, maria, we became the number one player in cloud infrastructure, according to Synergy Research the other day. Great news 16 of the total market, our peers are below that, but only at 16 . Gives you an opportunity of the opportunity in front of us. At our lunch this last week in new york, we talked about applicationcentric infrastructure where you take the concepts in the clouds and really bring it to life so you can generate applications quickly, open standards, and you incorporate Silicon Software defined Networks Hardware in order to meet the goals of your customers. The launch was an unbelievable success. If you watch, maria, in the cloud, were the only server vendor that has good gross margin on our servers. Not only because the ucs server is growing so well, probably over 40 , well talk about it today, but its able to maintain its margins because it has an architecture that ties to the cloud, to the network. I think were very well positioned in the cloud. Youll see us lead that not only in terms of enterprise customers but Service Provider and even data scaleable centers like microsoft and others which joined us on our announcement in new york this last week. What about the government, a portion of your revenue coming from sales to u. S. Government. How much impact did the shutdown have on the business . Is that an factor here . The government impact was less than we anticipated. It was a very interesting and challenging month, as you can imagine. The quarter you did not want to end in october was this quarter, with all the uncertainties going on. The government business was down a little bit but not as bad as we thought. Our actual state and local business was actually up. Okay. And in terms of international so we talked about emerging markets. What about europe, john . This is an area, of course, that has been seeing new inflows, a lot of talk about whether or not we have seen the worst there. What are you seeing . We said last quarter we anticipated just gradual but slow improvement, without giving away too much of what we want to talk about in the call, i think some things have not changed dramatically but its not going down. Southern europe is still very challenging. Central europe, very showing continued improvement, especially around germany. Germany has been the leading grower in europe. Thats still the case. And the south is really has been where the trouble has been. Yes. We dont see that changing. We look for growth in the central and hopefully northern part of europe, including the uk. We see the south challenging. And in terms of the u. S. , back in april you said this economy was challenging. It was inconsistent. How would you characterize the u. S. Right now, john . Exactly the same way, maria. Well talk about it, our business in terms of u. S. Enterprise, large customers and commercia commercials, were solid in the quarter. Its still inconsistent. Ceos are concerned and probably more cautious about next year than ive seen in quite a while. A lot of the government activity you referred to earlier contributed to that lack of confidence that people are seeing. So, i think youre in an environment that still looks flat lining 2 , give or take a half point in terms of what most ceos are expecting out of the economy the next year. What are they most concerned about . Is it the uncertainty because they dont have clarity on tax policy . They dont have clarity on the Expensive Health care . Or is it a simple demand story, john, they dont know whats lurking around the corner in terms of business . Well, i think you hit it well, maria. Its all of the above. Its the inconsistent data points we have talked about before, combined with the pace of change actually accelerating. What used to happen in three years happened in one year. What used to happen or two, three, four quarters, will happen in a single quarter of a company. So the ceos are trying to get predictability out of government, predictability out of tax policy, predictability about, are you even going to stay open . And an ability to anticipate what their costs are going to be. Also, they want to see the confidence out of the consumer. So, i think it is that inconsistent data that makes the Business Leaders nervous. When theyre nervous, theyre hesitant about investing at the pace we want them to. We know in the long run to compete in a global basis, u. S. Has to lead in technology and productivity. I want to ask you more about tax policy. Y