Bad. Say again . Theres reversal in some of them. Yeah, little change lets call it. Volumes still up, 80 above the threemonth average by the way. Global fixed income had a bit of a rally also. Speaking of fixed income, lets look at the 10year. There you see it, 2. 246. Crude is up. Yesterday too, wasnt it . Yeah, i mean, again people hope that the end of november theyll be some sort of cutbacks. It all just seems very chimerical, but it will say this. Traders get short and get between 42 and 43 and get crushed over and over again by the opening. Right. Lets get to the road map this morning. Of course it starts with janet yellen on the hill testifying on the health of the u. S. Economy and the timing for a rate hike. Plus donald trump taking some interesting meetings in new york today. Shinzo abe going to find his way to trump tower, we believe. A handful of ceos as well. And well have an update on the transition effort. Walmart out with results, sales were not quite where the company had hoped for, stock moving lower in the premarket. Jim and i will discuss that. Well probably get to best buy. Of course well be talking a lot of cisco when we get Chuck Robbins joining us. First though yellens appearance before joint Economic Committee of congress. This comes ahead of next months fed policy meeting. In her prepared text yellen says a rate hike could be appropriate relatively soon, adding, quote, were the fomc were to delay increases in the federal funds rate for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of the committees longerrun policy goals. We will bring you live coverage of the fed chairs testimony. Well have the q a of course with lawmakers beginning right around lets call it 10 00, 10 15 a. M. Any surprises . No, but remember the democrats historically want to raise taxes. Okay. Right, thats been spending, raise taxes. And republicans want to cut taxes but also cut spending. We have a guy, a hybrid. He wants to raise spending. Yes. And cut taxes. And i think thats a recipe for multiple rate hikes. And i wouldnt be surprised if she didnt talk about that. Although, i mean, i would also think shes going to be somewhat reticent, proper use of the word, in terms of discussing what she doesnt know. And a lot of it is what we dont know in terms of where is it going to end up in the trump agenda in terms of tax cuts and infrastructure or potential Infrastructure Bank and so many other things. Well, she can give herself a pass very easily by saying we dont know. When we talk to Chuck Robbins later, theres a question about their huge cash hoard. And they went with the they dont know. But there is a directional approach by mr. Trump. And his approach is to combine the best growth portions of both parties short term, but maybe longer term that will lead to higher rate hikes. Yeah, could even lead to inflation. Now, is the move in the bond over with though since the election . I mean, are we going to sort of settle in here, do you think . Unless president elect trump starts detailing some of the need for the funds the trillion dollars he wants to spend in infrastructure would suggest a move. I think the dollar strong lots of people want to buy our bonds, we also have people in this country selling bonds to be able to get involved, i think, in the stock rally. And i think that thats what were going to find when we dig down about what really happened here. We had people selling bonds to be in some of the stocks that are value stocks. So i think that the cross currents make it so that you could have bonds hang here for a second, but i do think you have to lock in as i mentioned the mortgage. Yeah. Because you just dont know. I think many people bought floating rate mortgages and that could end up being foolish. You talked about the rotation. Excuse me, weve seen it for five trading days. And it of course was pretty vicious out of the growth names that weve all come to know and many investors love. Yeah. Because in some ways, jim, growth is going to be there for your old line industrials or cyclicals because when their tax rate gets cut, well, thats going to help earnings growth, isnt it . Yes. I think people have to understand theres a downgrade today of freeport that i would take issue with because people want things like alcoa, letter aa, now, if you put together the pieces of alcoa and arconic, youve seen a remarkable move. Thats what people want. They want commodity. The analysts are not embracing the bank moves. Theyre saying too far too fast. Theyre defending all the tech stocks. David, i think the too far too fast is going to be by half. I dont think youll be able to get back into some of these stocks because the new theme i bumped into bill miller yesterday on the street. Okay. Hed obviously been the new theme is optimism. And optimism means at the beginning of the year people used to say, listen, its time to buy the metal stocks. Well, you cant reverse that in seven days. In seven days, david, freeport does not rest. It doesnt . No. It doesnt rest in seven days . Donald trump doesnt seem to rest either. Hes going to be busy today. Shinzo abe, the Prime Minister of japan by the way they did have that surprise announcement from the boj overnight issues an unlimited fixed rate bond tender offering an unlimited amount of twoyear jgbs as well as unlimited amount of fiveyear jgbs to try to keep things going over there in terms of the japanese bond market. Sort of yield curve control if you want to call it that. This may be the beginning of what we start hearing when he talks about, look, i think that you guys are taking advantage of that currency. This is something when ive spoken to him many times hes very acutely aware of currencies. Now, if youre caterpillar, which your stock has been on fire, okay, because of infrastructure. With the dollar where it is, komatsu wins in the headtohead. But would it shock you to hear that the federal Highway Administration if they were going to get the money from the trump infrastructure that they were told, look, youre not going to ewe komatsu because the japanese are trading i know that seems extreme. But when you listen to the rhetoric over the years, he wants to play tough with komatsu. Thats six and a half in one and a dozen there are a lot of companies that would say whats komatsu on the dollar right now versus whats cat . Wouldnt shock me at all if the president elect doesnt mention that. Remember, he came abe came to new york came to america and he only met with candidate clinton. That may have proved to be an ill advised decision. Well, it will be interesting to see with the meeting today actually encompasses. Right. Also a few ceos making their way to trump tower. Past the barricades. Right. Including software cats from oracle. They had a very big ad today. Now that theyve closed that deal, they are number one in the cloud. Helped orchestrate the closing of that deal against all odds. Can i just say, you want a treasury secretary, coceo of oracle, that would be my choice. Shed be a brilliant treasury secretary. I say brilliant. I mean like huge, david. Like absolutely brilliant. Like number one. She would be it. If we got her, it would be something. You get that . I think youre sending a message out there. I dont think thats what the meeting is about. Thats too bad. Shes fabulous. She knows money. She knows business. I dont think jamie dimon is taking that job. No, but safra, i have ie namerred for years. Larry nelson theyre playing that music already. Thats because we have to get to Chuck Robbins from cisco joining us after this break. We also have to talk about earnings from walmart and a number of others. Heres a look at futures before we send you to the break. And when we come back Chuck Robbins joining us, ceo of cisco. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. Can i have a 2017 leyeah x 570. Wish big. At the lexus december to remember sales event. Get up to 2,500 customer cash on select 2016 and 2017 models for these terms. See your lexus dealer. Cisco out last night with a very good strong quarter, but its forecast for the next quarter has the stock down in premarket, as it should because it was quite dismal. So joining us now is the ceo of cisco, Chuck Robbins. Chuck, i feel like we have a tale of two cities here. Youve told a great story for this quarter, but, chuck, could you have been more down beat about the next quarter . I mean, honestly, im hoping youre going to come on this show saying you were being conservative, not just frustrated and angry and disappointed. Well, hey, jim. Good morning. Its good to see you and david this morning. You know, we had we reported obviously as you said a very good quarter for our q1 results. And if you look at the highlights of the quarter, we had some really strong performances in our business. And we called out this general weakness that we saw in just some of our Larger Service providers. But at the same time we had our Global Enterprise business up 5 . Weve been focused on driving subscription and s. A. S. Businesses and deferred revenue from those businesses was up 48 . Our security business continued to be very strong. Collaboration was very strong. So there are a lot of areas for us to be excited about. And the primary driver for the guide was this Service Provider weakness we saw just particularly in the quarter. Well, lets talk about that. I mean, down 12 made me feel like it couldnt just be macro. Made me feel like i know theres some freeze going on in some places including education. But, chuck, are you losing share to other companies . It was the first question on the cue and it chilled me to think that what some of these analysts are saying is its not the macro, its your sales force. Well, jim, if you look at the Service Provider business for us, we have a lot of large accounts around the world. There are lots of dynamics that are going on in this space right now with the political climate, some of the macro uncertainty thats existed for the last year, weve got some consolidation thats occurring. And you can assume that we have visibility on an account by account basis. And i can tell you that im not concerned about losses. That it truly has been a variation of reasons for the cap x freezes in some big accounts that weve seen. But i dont view it as losss that have caused a challenge for us this quarter. All right, chuck, the elephant in the room 71 billion in cash. If your stock opens up where it is, youre talking about a market cap where literally almost half of it is in cash and we have a new president. And weve got a congress controlled by republicans. I know kelly cramer, your fabulous cfo was asked about this, but chuck, youve got to admit on air right now that if there was repatriation, your company may be the principle beneficiary of it. Well, jim, certainly we have been a proponent of repatriation for quite a long time. We believe that if that occurs in the next year, which were very optimistic, then we have been working on scenarios as you would expect over the last few years in hopes that we would get to this place. It hasnt kept us from doing anything, as you can see from the number of acquisitions that weve done in the last year and a half. But certainly we would look at a combination of, you know, our dividend, our buybacks as well as strategic m a. So were excited about the possibilities that it could create for us. Yeah, chuck, its david. Of course i think the possibility is certainly very strong its going to happen. So its interesting to hear you list some of the things youre thinking about. Is there an order of preference in your mind lets assume we get the bill out of congress, probably lets call it the spring, whats number one . Is it strategic m a . Is it a combination of all three that you just mentioned . Well, david, weve been committed to 50 return of cash flow. And so we would stay committed to that. And i think youre right, it would be a combination of those three. We would look at any given point the Strategic Acquisitions would be based on whats available and where we are in our strategy along the way. But i think its safe to say it would be a combination of the three. Something else that of course has come up in our conversations with ceos like yourself is not just the benefits from potential Corporate Tax reform, but immigration. And a lot of ceos come out on the other side of that. Im curious if mr. Trump follows through on his campaign promises, will that hurt your business . You know, one of the things that i believe to be very true is if president elect trump is probusiness and he is very focused on driving strength in the u. S. Economy, and i think if you listen to the things he said since hes been elected, he is ensuring that the decisions that he makes are aligned with driving growth in the u. S. And i think that will apply across all the things that we care about including immigration, patent reform, tax reform. And so i think that when you get right down to the decisions that have to be made, hell ensure that hes making the right ones for the u. S. Economy and for the global economy. And as the u. S. Economy strengthens, thats certainly good for Companies Like cisco. All right. But if he follows through on his deportation pledges and on deporting a lot of people, you dont believe thats going to have a negative effect for your business or your ability to attract talent . David, we focus on bringing in, you know, high end h1b candidates who have high end engineering degrees that i think are good to drive innovation in this country. One of his big priorities is how do we create jobs and drive innovation in the United States. So i think that as you get into the details of all of these programs, i still think that whatevers good for the u. S. Economy is where hell land. Chuck, going back to the fundamentals here. Switching down 7 , Company Facing a challenging transition pain. But at the same time the softwares a service business, the security business really on fire. Are we can we look at your company as one part hurt by macro, just a transition where theres a refresh thats been held off because of exactly what youre talking about. And the other part very, very strong. And that the macro portion could really catch up to the very strong portion making it so that youre somewhat down beat forecast could be exceeded . You know, jim, i think that as you look at our business, you have to look at it beyond one quarter. And so our routing business this past quarter was up 6 . Our Enterprise Sales were up 5 . And at the same time our switching revenue was down 7. And to your point the areas that weve been strategically investing in, which is how do we transition our security portfolio, Cloud Networking business, that business was up, the subscription and deferred revenue on the Software Side was up 48 , so i think the areas were working on are working. Weve talked about the fact that during times of uncertainty which really began in january with the market meltdown we saw while we were in davos, really the enterprise customers basically said if my infrastructures working, then im going to sweat the assets as long as i can. And i think our job over the next year is to provide a reason for them to upgrade, which i think our teams will do. Chuck, do you have to do another rationalization of the workforce . Some of your businesses are so strong you have to put more resources behind them. Other businesses have tailed off that perhaps there are too many people and youre not getting the margins on that part, or at least this quarter i know margins were good. But you know what i mean. If things drop off a year from now, i think you might have too many people in older businesses, legacy businesses, and you dont need them. Well, jim, if you look at the moves that weve made in the last 120 days, we talked about that as being a reallocation of resources towards some of these key growth areas. And i think youre seeing the results. We got strength in collaboration, we have strength in security, strength in the software business. And well continue to run our business as we always have and we align resources as needed and ensure that we maintain the strong financials that weve always been known for. Chuck, finally, back to sort of the term presidency, the expectations on the regulatory front when it comes to telecommunications are pretty significant. We dont know what were going to see. Is it a possibility that also tends to freeze business among some of the Telecom Providers as they wait to see how the landscape shapes . Well, david, i think if you look at the global Service Providers around the world and as they assess their cap x right now, youve got some concerned about the currency dynamics and some in the middle of regulation and some waiting for more regulatory things to become more clear to your point, and i think as that clarity comes forward, then i think the business could improve, it could stay a little tougher for awhile until we get that clarity. But i think those are the primary drivers right now. All right, terrific. Chuck, thank you so much for coming on. Thats Chuck Robbins, the ceo of cisco. Always good to see you, sir. Thank you. Thank you, guys. Quick news alert here on wells fargo. The Bank Reported its october Retail Banking activity a few moments ago. New customer accounts were down 44 versus a year ago. Customer interactions with tellers were down 10 versus a year ago. New credit card applications continue to fall down 50 year over year. So, jim, continued impact from the scandal itself. The stock not doing much. It has been of course very strong since the election. Right. Now, the legacy business is so strong at any given single month will not matter. You know, its funny, there was a downgrade today of chipotle, and i know the wells fargo people wont necessarily like the analogy, but the