Prospects cautious as a consequence of commerce struggle, Brexit
“They’re simply expressing warning that they are involved about what is going on on within the marco setting,” Robbins mentioned on “Squawk on the Avenue.”
Dow inventory Cisco tumbled after the know-how conglomerate late Wednesday reported fiscal second-quarter earnings that got here in under estimates and lowered ahead steerage. Cisco blamed the disappointing outcomes on reticence within the face of a slowing international progress — partly primarily based on fears of that Britain’s exit from the European Union and the U.S.-China commerce struggle will not get solved.
“We do not see something within the quick time period that can definitively resolve the problems we’re seeing around the globe,” Robbins mentioned. Although he did says that progress on a “part one” commerce deal between the world’s two largest economies “would assist” with buyer confidence.
Shares of Cisco had been down greater than 7% on Thursday morning and on tempo for his or her worst day since mid-August. Cisco is up nearly 5% year-to-date in comparison with the S&P 500’s almost 24% advance in 2019.
Robbins cited comparable international pressures when talking to analysts on Wednesday’s post-earnings convention name. Cisco noticed “a little bit of a pause” within the quarter and that some giant offers had been made however “bought accomplished smaller,” he mentioned.
Beijing and Washington are working to cement a “part one” commerce deal, which was introduced in precept final month. Nonetheless, negotiations have hit a snag over a variety of points.
The U.S. is making an attempt to safe stronger commitments from China on mental property protections, quantities of agriculture purchases, and an finish to what it sees as pressured know-how transfers. China desires a rollback of tariffs, whereas reportedly balking on placing a selected quantity on farm good buys. Washington has positioned tariffs on greater than $500 billion in Chinese language items. Beijing has put duties on about $110 billion in American merchandise.
In August, Robbins advised CNBC that Cisco noticed an influence on its enterprise in China because of the ongoing commerce struggle.
“We definitely noticed an influence on our enterprise in China this quarter. Loads of state-owned enterprises, I believe the place they’ve choices, they’re selecting native producers,” Robbins mentioned on the time. “We do not know if that is a short-term factor or a long-term factor.”
— CNBC’s Jordan Novet contributed to this report.