Flatter . If it was zero. Ditto for almost all of europe. Hardly anything there. Crude oil at this hour is stronger by 37 cents, 45. 93. That may be because the dollar has taken a breather after its rampant run. It was one market that just kept going and going. Today a bit of taking the edge off. Carl icahn warns that the strong rally in stocks since Donald Trumps election might be overdone. Even more overdone than the overdone market that hes been warning us about for the last six months, maybe the year before that. Ive known him 20 years, hes been warning me for 20 years about the market. Speaking at a conference yesterday, icahn says investors can expect trump to help fix washington and improve the state of the economy. Icahn has been a strong trump supporter. He said he bet about a billion dollars on u. S. Equities after leaving trumps Victory Party early last wednesday morning. Thats interesting. Before the election how many times have we had this as a headline . I stand over there at the top of every show. In the last year i have said carl icahn is warning about the stock market at least its always something dire. Overvalued. It doesnt and i certainly have some sympathy for that viewpoint given that a lot of it has been orchestrated with the animal spirits of easy money and the fed. Maybe we eventually this woman is pulling up her shirt out there. This is bizarre. Go away. My god. Look at this. Wow. Dont take a shot of that. Dont take a shot of that. We didnt need to see that. She had a bra on. She did. A black one. It was black. I saw it and lacy. You have to ask yourself good morning. Thank you for that. Dont you try anything like that, allison. Alison is coming on in a second. I wont either. Dont you either. You have to wonder about the run in the stock market. Its been tremendous since youre changing the subject. Yes, i am. And so, yes, you can be very excited about potential changes. He doesnt take over until january 20th. How much more can you get until you know really what he wants to do with doddfrank. Stop being distracted i think theyre going to a protest. I do. That was the whole well see. The Trump Building is that way. Going to get a starbucks. Okay. Yeah. All right. Well see with with carl. I dont know if i can continue. The fed out in force this week speaking late yesterday. Have you turned your frown into a smile yet, alisonalison . About the election . You okay now . Have you read the notes . Shes nervous. Well interview her in a few minutes. I worry about her. We talked before the election. Ive been worried. Philadelphia fed president Patrick Harker said he favored increasing Interest Rates and suggested that the central bank might have to hike more aggressively if Donald Trumps administration enacts fiscal stimulus. The fed said it will increase rates gradually otherwise but inni independei ininvestors believe inflation could increase. Weekly jobless claims out at 8 30 a. M. Eastern. Headline cpi forecast to rise. Housing starts are due out at 8 30 a. M. Followed by the November Philly cheese sorry, philly fed survey at 10 00. When you see philly, dont you think philly cheese steaks . Yeah. I would love to have one. Sometimes if we mention them, they deliver. Yeah. Half a dozen fed officials are speaking throughout the day. The highlight will likely be fed chair janet yellen, testifying on capitol hill before the joint Economic Committee. Thats at 10 00 eastern time. In earnings central, walmart, best buy reporting before the opening bell. Target yesterday was interesting. Hearing from gap and sal salesforce. Com. Yesterday i mentioned cisco, whether thats something i thought that was interesting yesterday. All we talk about is social media. And software. Cisco is trying to move towards software, like everybody else. Was interesting if we talk about everybody sitting around at home surfing facebook and twitter and snapchat no wonder productivity is at zero. The reason that facebook is worth a gazillion dollars in market cap is because they have to be advertising something that people buy. If were not making anything to buy, theres just advertising george bu in my stream i get advertising for apps. Still sitting there in your basement. Exactly. Mmhmm. I hope thats not a day of reckoning. The social media, thats not the first internet bubble s there . Is there a social media bubble . A lot of those dotcom companies didnt make money. Facebook makes money. You know what today is . Thursday . The 17th or the 18thment. According to my apple watch, the 17th. National black cat day. I didnt know they needed a day. Why . Theyre the last to get adopted. Really . Yeah. They would be my favorite. I got married on friday the 13th. I block cats. Mysterious. Sleek. I dont worry if they walk in front of me. You encourage it . I do. Thats the nonconventional wisdom. How many times does it have to happen . I think it will happen over and over again this year. It never doesnt happen. Thats true. That makes life exciting. Well sometimes. For some people. Turn that frown upside down. Lets tell you some political news. Japanese Prime Minister shinzo abe is set to meet with donald trump today. He will be the first foreign leader to do so since the election. Abe says he wants to build a relationship of trust. Among the president elects other pleatimeetings today, nik haley, henry kissinger. Fedex ceo fred smith and safra katz. Ciscos First Quarter profits falling 4 , largely on restructuring charges related back to job cuts that were announced in august. Revenue was down more than 2 . The company also warning that revenue will decline again this quarter as challenges continue to mount. Ceo Chuck Robbins on the conference call. We delivered a strong q1 in an environment that continues to be challenging. We executed very well in the quarter with revenue growing 1 , nongaap earnings per share growing 3 . Along with continued strength in nongaap gross and nonoperating margins. This quarter total product orders declined 2 , largely due to Service Provider orders declining 12 which was worse than our expectations heading into the quarter. Well talk to an analyst about cisco in a few minutes, and later on this morning, robbins will be joining squawk on the street at 9 00 eastern. Han celestial says it has found no evidence of wrong doing in relation to its Financial Reporting this is after conducting a review of its own accounting. The Companys Audit Committee examined whether revenue from certain distributors into the u. S. Were recorded in the proper period. First solar is cutting 1600 jobs or more than a quarter of the its work force. The Company Expects to post a loss for the year and is forecasting 2017 sales will falwe falwell e. Fall well below estimates. The dollar is pulling back, 2. 2 on the tenyear. The 30year got above 3. A month ago it was 1. 7. The delta matters. When we went from, like, 9 to 7 on the way down, it was the most powerful thing for stocks. Tremendous. It was unbelievable. Right. We will never ever in anyones lifetime see anything near 5 on the 30year. On the way down. Never happen. I remember. I remember. 5 sounds like 5 sounds like 500 . The dollar also pulling back after climbing to 100. 57. Strong index. Highest level in 13 years for the dollar index since april of attention to Janet Yellens speech today. Joining us is alison and jack. Theyve done it. Theyve waited so long to raise rates, that at this point theyre absolutely with the election, with whats happened in yields, with the markets, with all the notion of inflation coming back. They can finally do it. Now the bond market has done it for them. They can finally do it without wringing how do you wring your hands . Do you go like that . I thought it was more like this. Thats shaking your wrists. Shake it off 6. The notion that these guys are smart, they know the future of economic activity, you have to beat them over the head and say its okay before they do it. Are we excited and watching with great relieved in. Are we watching with great anticipation . No, not at all. Why did we say that . Why did we say what . I said wed be watching with great you said it. Whoever wrote it said it. The bond market is telling us what is going on. And its healthier to overly worry on the government to do things and drive things. Now i sound like a republican. You never you never sound like that. Thats why im trying to cheer you up. That woman did it a lot more. Your face i was like what is she doing . The next thing i realized. I think she was coming for a march two days ago and hasnt slept yet. You could smell her through the window . Gross. Jack what we have going for us, after they raise once they generally raise a second time. We can talk about when. Then a third time. Next year, once we get this one, we can talk about whether the next one is coming. Wheres three, four, 25, 50 . That will be a long time before we have that discussion. Are they going to change the wording . They will. For people who believe theyre behind the curve, that was one of the reasons people thought they should have raised a while ago. If you start back here, then you can go slowly. If you wait up here, it becomes much steeper. You should also keep in mind what has the fed been asking for for years . In every bit of testimony we would like some fiscal stimulus. We would not like to be the only game in town and we would like help. I think thats what changed at least in terms of the markets perception coming out of the election. We might get a stimulus bill and tax cuts. We dont know what well get. We keep trying to guess. Is it regulation in your view if you get rid of the heavy handed regulation, is that like fiscal stimulus to you . Because it is. I think it lets management teams make the decisions off of what they think will be most profitable and hopefully they can move faster. Did you hear sam zell yesterday . He said the last couple of years, the amount of paperwork he has to do. When you look at the way economists think about gdp, population growth versus productivity. If you assume regulation decreases dramatically, i assume you get higher productivity, which feeds no you s ns no feed expectations for gdp growth. Gets you more sustainable productivity. This is a matter of fewer lawyers running most of these firms. Think how bullish that is. Im playing a violin. I want a marching band. Youre worried about the stock market still . For the past year i thought the market was overvalued and we needed something to drive the market. I think the infrastructure spend is fantastic. Some healthy deregulation and tax reform is good. If we get into trade wars, 40 of the s ps revenues comes from oversees. I dont see how you dont have a ballooning deficit which means higher Interest Rates . I would not get out of equities but i would trim back. Given how we given how we have been trying to engender any inflation at all, and rates are basically zero, wouldnt this be the time f youre not going to worry about blowing out the deficit and you need economic activity, isnt this the time where you dont have to worry about it quite as much . Go ahead do it . Knock yourself out . Fiscal stimulus, thats fine. Trade war, thats not fine. Were a global economy, the corporate and stock market relies on global revenues, not domestic revenues if we back off from the trade wars, eliminating nafta, not going through any aspect of tpp, it would be less worrisome. Thats significant. The other thing about trump which you would be hard to admit, he is a businessman and does want to succeed. Unless youre not a smart businessman i would love for him to succeed. You understand about global trade. Theres rhetoric before youre elected and action afterwards. I think if you came to him and said if we do this to china, theyre never going to buy another iphone, i think that might cause rethinking. Do you think . Busine businessmen are more pragmatic. We like to think we are. To the point we talk about the s p generating about 40 of its revenues internationally, you also have to think is that true exports or local operations . To the extent you can look at somest multinationals, they have costs within those economies. And their revenues are in those economiesy s ssh economies, is it a translation impact . A ballooning deficit may get you higher Interest Rates or a higher dollar . So were trying to handicap the way the market goes and how people respond. Its a set of probabilities. Both candidates were pretended to be antitrade. I dont believe either one of them. I dont believe Hillary Clinton would have been that way. But if you go to the true center of the Democratic Party right now, Bernie Sanders and elizabeth warren, they wouldnt just say it. I dont know why youre so they would do it. They would do it. They would follow through on it. Surrounded by paul ryan and all these other people. Just i would been more worried about your party and the fringe elements there. You just called them the centermen center. I think the center is fringe right now. Both fringes average to the center. Policy takes longer. It takes a year or two before you can change anything. You take the average, you add Bernie Sanders and elizabeth warren, cut that in half, youre way the hell out here on the left. Arent you . Michelle carusocabrera . Yes. Yes. Preach to the choir. You can nod and give me help. Okay. Theyre playing music. Im a first child. They want me to go to break. Im not talking. You had brothers and sisters . I was the first child. You were the first. Okay. Oldest. Oldest. That happens. For eight years . Eight years. Eight years . Only child for eight years. Thats an only child. Ky go i can go to break now . Cisco posting an earnings beat. The stock is falling sharply this morning. Reaction from an analyst next. And later, Neel Kashkari is here. Cisco posting better than expected results for the first c fiscal First Quarter. Joining us now to break down ciscos earnings is brian white, global head of technology at hamilton. I think of them as ibm. They used to do one thing and now want to try to do something else. They used to have all this hardware. The biggest part of the revenue, they would like to be doing security software, recurring revenue, annuity streams. This feels like its slower than what people wanted, this report. Is that a correct way to think of it . I think all big i. T. Companies are going through a transition, transitioning to the cloud. No doubt theyre making the transition. Their transition has not been as painful as ibms. Last night they called out carrier spending, Service Provider spending was weaker than they thought. I went back the last four novembers, and the stock on average has dropped 5 after earnings. There is something about a hangover effect. The fiscal year ends, you do okay in the First Quarter, but the order of growth is slow and it impacts the Second Quarter guidance. This is when the bad quarters usually come up. Thats in november call. I would do they think carrier spending is week . Good question. Orders were down 12 year over year. They mentioned a lot of different things. Number one, fx, some of the fx still had an issue. Also a lot of regulation change. Net neutrality, trump is against net neutrality. Well see what that means. That would be a positive for cisco. In certain areas of their portfolio, they werent well positioned. Capex hasnt been phenomenal. To be down 12 year over year is a big decline. You ever have a buy on this stock . We have a buy on it, yeah. I wasnt going to use dog with fleas anymore, i love dogs. This has been dead money for ten years . So, if you go back to a lot of these big tech names in the bubbl bubble. If this is tech, we need a new word for what tech is supposed to be. The market cap is 150 billion right now. It was 600 billion at one year. I want to see a 10 or 20year chart. I dont care to see where the i do. Oh, remember that . Yeah. Im talking about in the last five years. The last ten years. You can do anything with your money. Is there any reason you have a buy at 30 on this. Why . Well a couple things. I think its still cheap. Its not 100 times earnings like in the bubble. I guess when you have single digits, its a buy. You have a dividend yield in this market thats attractive. I go back to the cocacola, pepsi, kelloggs of the future, they get better multiples but are not growing at the hyper growth rate. If you look at a basket of those companies which have grown 2 for the past five years, trade it 21 times earnings. Cisco growing 7 a year over that time frame. Whats the best you can expect for eps growth over the next five years . Theyre looking for high single digits. That would mean low single digit revenue, high single digit eps. What multiple is that . 10 . Because they have a great dividend yield, i would say you could probably give it a mid teens multiple. Mid teens. What is the market . What does the market grow at . 5 . It has 15 or something for a multiple. Yeah. This is not a company that i think has meaningful downside, doesnt have huge upside, but you have that nice dividend yield, its cheap and they dominate the market theyre in and theyre expanding in the new market. Under a Trump Administration, gdp growth will be good. Net neutrality wont be an issue. All this talk about a trade war, they already suffered. Its only 3 , 4 of revenue. Theyve had their trade battle with china. Theres no hope there . There is hope because the jv they started with was announced a year a go kicked off this wee. Inspur has an initiative, billions of dollars over the next five years or so, to create a jv with inspur that is that size. It just kicked off. 51 is owned by china based inspur. They will trail blaze like they wouldnt be able to because of exactly whether you said. When you partner with chinese companies, you can do well. They were switchers, routers, all that stuff. Building out the internet. Yeah. They need to transition . Is there still a business there . 30 switches, 17 routers. They have a Big Data Center business. Theyre in security, in software. Theyre in servers, number two blade server in the world now. The cloud, too . All this is in the cloud. All of this can be sold into the cloud. Thats the initiative. Look at yo