>>> Cisco beats by $0.04, reports revs in-line; guides Q2 EPS above consensus, r

Cisco beats by $0.04, reports revs in-line; guides Q2 EPS above consensus, revs in-line; guides FY25 EPS above consensus, revs in-line; broad-based acceleration in product orders reflecting normalizing demand (59.18 +0.47)
  • Reports Q1 (Oct) earnings of $0.91 per share, excluding non-recurring items, $0.04 better than the FactSet Consensus of $0.87; revenues fell 5.6% year/year to $13.84 bln vs the $13.78 bln FactSet Consensus.
    • Non-GAAP operating margin was 34.1% vs 31-32% prior guidance.
    • Product revenue was down 9% and services revenue up 6%. Excluding Splunk, total revenue was down 14%.
    • Revenue by geographic segment was: Americas down 9%, EMEA down 2%, and APJC up 1%.
    • Product revenue performance reflected growth in Security up 100% and Observability up 36%. Networking was down 23% and Collaboration was down 3%. Excluding Splunk, Security and Observability grew 2% and 1%, respectively.
  • Co issues guidance for Q2 (Jan), sees EPS of $0.89-0.91, excluding non-recurring items, vs. $0.87 FactSet Consensus; sees Q2 revs of $13.75-13.95 bln vs. $13.77 bln FactSet Consensus.
    • Co guides to Q2 non-GAAP operating margin of 33.5-34.5%.
  • Co issues guidance for FY25, sees EPS of $3.60-3.66, excluding non-recurring items, vs. $3.57 FactSet Consensus; sees FY25 revs of $55.30-56.30 bln vs. $55.83 bln FactSet Consensus.
  • "Cisco is off to a strong start to fiscal 2025," said Chuck Robbins, chair and CEO of Cisco. "Our customers are investing in critical infrastructure to prepare for AI, and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity." "Revenue, gross margin and EPS in Q1 were at the high end or above our guidance range, generating strong operating leverage," said Scott Herren, CFO of Cisco. "We are focused on solid execution and operating discipline while making strategic investments to drive innovation and growth."

>>> US Close Dow +0.11% S&P +0.02% Nasdaq -0.26% Russell -0.94%

Closing Stock Market Summary
The stock market had a mixed showing today. There wasn't a lot of conviction on either side of the tape due in part to the major indices sitting near all-time highs. The S&P 500, which settled little changed from yesterday, is about 16 points off its record closing high.

The equal-weighted S&P 500 closed fractionally higher, but market breadth was negative. Decliners led advancers by a 3-to-2 margin at the NYSE and by a 2-to-1 margin at the Nasdaq.

Participants were digesting this morning's release of the October Consumer Price Index, which also garnered a mixed response from Treasuries. Total CPI was up 2.6% year-over-year, versus 2.4% in September, and core CPI up 3.3% year-over-year, unchanged from September, stoking worries about inflation persisting above the Fed's 2.0% target.

The 10-yr yield, which is most sensitive to inflation expectations, settled two basis points higher at 4.45%. The 2-yr yield, which is most sensitive to changes in the fed funds rate, settled four basis points lower at 4.28%.

Rate cut expectations increased slightly in response to the CPI print. The fed funds futures market now sees a 82.3% probability of a 25 basis points rate cut at the December FOMC meeting, up form 58.7% yesterday, according to the CME FedWatch tool.

Semiconductor stocks were a pocket of weakness, leading the PHLX Semiconductor Index (SOX) to close 2.0% lower. This price action also weighed down the S&P 500 information technology sector, which fell 0.3% despite gains in Microsoft (MSFT 425.20, +2.17, +0.5%) and Apple (AAPL 225.12, +0.89, +0.4%).
  • Nasdaq Composite: +28.1%
  • S&P 500: +25.5%
  • S&P Midcap 400: +17.7%
  • Russell 2000: +16.9%
  • Dow Jones Industrial Average: +16.6%

Reviewing today's economic data:
  • Weekly MBA Mortgage Applications Index 0.5% ; Prior -10.8%
  • October CPI 0.2% (consensus 0.2%); Prior 0.2%, October Core CPI 0.3% (consensus 0.3%); Prior 0.3%
    • The key takeaway from the report -- and perhaps calming influence -- is the understanding that the shelter index accounted for more than 65% of the total 12-month increase in core CPI, so the market is watering down the headline inflation print as not being as comprehensively inflationary as it seems. The unadjusted change in the all items less shelter index was just 1.3% year-over-year.
  • The Treasury Budget for October showed a deficit of $257.4 billion compared to a deficit of $66.6 billion in the same period a year ago. The October deficit resulted from outlays ($584.2 billion) exceeding receipts ($326.8 billion). The Treasury Budget data is not seasonally adjusted so the October deficit cannot be compared to the September surplus.
    • The key takeaway from the report is that the net interest outlay is running close to $1 trillion on an annualized basis.

Thursday's economic data features:
  • 8:30 ET: October PPI ( consensus 0.2%; prior 0.0%) and Core PPI (consensus 0.3%; prior 0.2%), Weekly Initial Claims (consensus 220,000; prior 221,000), and Continuing Claims (prior 1.892 mln)
  • 10:30 ET: weekly natural gas inventories (prior +69 bcf)
  • 11:00 ET: Weekly crude oil inventories (prior +2.15 mln)

>>> Soros Capital discloses updated portfolio positions in 13F filing: New AEO B

Soros Capital discloses updated portfolio positions in 13F filing: New AEO BABA AFRM positions, Exited WULF IREN
Highlights from Q3 2024 filing as compared to Q2 2024 (all amounts are approximate):
  • New positions in: AEO (514K), BABA (114K), AFRM (112K), GEV (55K), DHI (52K), EXAS (52K), MSFT (48K), DHR (21K), ASML (21K), PWR (19K), UNH (17K)
  • Increased positions in: UBER (to 140K from 9K), ICE (to 121K from 20K), FLUT (to 94K from 5K), AMZN (to 106K from 23K), AMAT (to 82K from 9K), BLDR (to 64K from 9K), META (to 49K from 1K), CASY (to 28K from 1K), ULTA (to 27K from 1K), FI (to 55K from 32K), PTLO (to 49K from 32K), ARHS (to 22K from 18K), DKNG (to 12K from 8K), VRSN (to 14K from 11K), CZR (to 93K from 90K), STZ (to 14K from 11K)
  • Maintained positions in: PACK (4.63 mln shares), NMRA (0.51 mln shares), CSGP (0.09 mln shares)
  • Closed positions in: WULF (from 2.3 mln shares), IREN (from 1.32 mln), DLTR (from 24K), TMUS (from 15K), CRM (from 12K)
  • Decreased positions in: CORZ (to 862K from 1511K), TSM (to 105K from 136K), ALC (to 27K from 40K), GDDY (to 23K from 30K), PHYS (to 32K from 39K), CCI (to 25K from 28K)

>>> Baupost Group (Seth Klarman) discloses updated portfolio positions in 13F fi

Baupost Group (Seth Klarman) discloses updated portfolio positions in 13F filing: New DG position, Increased GOOG WCC EXP holdings, Exited TBPH WSC JAZZ
Highlights from Q3 2024 filing as compared to Q2 2024 (all amounts are approximate):
  • New positions in: DG (2.3 mln shares), TBN (0.57 mln), QSR (0.03 mln)
  • Increased positions in: WCC (to 1.26 mln shares from 0.8 mln shares), GOOG (to 1.47 mln from 1.07 mln), EXP (to 0.5 mln from 0.34 mln), WTW (to 1.78 mln from 1.65 mln)
  • Maintained positions in: LBTYK (42.31 mln shares), CLVT (38.93 mln shares), LBTYA (7.19 mln shares), SOLV (1.82 mln shares)
  • Closed positions in: TBPH (from 4.2 mln shares), WSC (from 2.47 mln), JAZZ (from 1.27 mln) CPRI (from 1 mln) HUM (from 0.42 mln), VRSN (from 0.11 mln)
  • Decreased positions in: FIS (to 0.97 mln shares from 3.51 mln shares), CRH (to 2.64 mln from 4.23 mln), VSAT (to 12.22 mln from 13.76 mln), FTRE (to 2.29 mln from 3.14 mln), J (to 0.35 mln from 0.49 mln)

>>> Trian Fund (Nelson Peltz) discloses updated portfolio positions in 13F filin

Trian Fund (Nelson Peltz) discloses updated portfolio positions in 13F filing: Increased SOLV UHAL positions, Exited DIS RTO
Highlights from Q3 2024 filing as compared to Q2 2024 (all amounts are approximate):
  • Increased positions in: SOLV (to 7.13 mln shares from 5.36 mln shares), UHAL.B (to 1.05 mln from 0.91 mln), UHAL (to 0.45 mln from 0.39 mln)
  • Maintained positions in: JHG (31.87 mln shares), GE (4.03 mln)
  • Closed positions in: DIS (from 2.65 mln shares), RTO (from 0.47 mln)
  • Decreased positions in: IVZ (to 23.17 mln shares from 27.22 mln shares), ALL (to 0.61 mln from 2.01 mln), GEHC (to 4K from 1.34 mln), WEN (slightly lowered to 30.51 mln from 31.51 mln), FERG (to 1.27 mln from 1.95 mln)

Reuters : Global luxury sales to fall 2% in 2024, among weakest years on record,

Global luxury sales to fall 2% in 2024, among weakest years on record, Bain says

Summary

  • Luxury industry lost 50 mln consumers in past two years
  • Price hikes have played a role, outlets outperforming sector
  • Brands' pricing strategies to influence growth prospects

MILAN, Nov 13 (Reuters) - Sales of personal luxury goods are set to fall 2% this year, making it one of the weakest on record, with price hikes and economic uncertainty shrinking the industry's customer base, according to consultancy Bain & Company.

In its closely-watched report on the 363-billion-euro ($386 billion) market, Bain estimated a 20-22% sales drop in China, which has turned into a drag after a years-long boom before the pandemic fuelled by the wealthy and growing middle-class.

The forecasts include the effect of currency moves.

"This is the first time the personal luxury goods industry has declined since the 2008-09 crisis, with the exception of the pandemic," Bain partner Federica Levato told Reuters.

The study released on Wednesday will likely heighten concerns among investors that the sector's current downturn, which has knocked shares in the likes of LVMH (LVMH.PA), opens new tab and Kering (PRTP.PA), opens new tab, may be longer and deeper than anticipated.

"The luxury consumer base has declined by 50 million over the last two years, from a total of approximately 400 million consumers," Levato said.

Growth prospects for the market hinge partly on the strategies brands choose to pursue, including on pricing, she added.

In a further sign that higher prices are holding back consumers, Bain said the outlet channel was outperforming, driven by shoppers' quest for value.

The personal luxury goods sector is expected to grow by between 0% and 4% at constant exchange rates in 2025, supported by sales in Europe and the Americas, with China seen recovering only in the second part of the year, Bain said.

Levato said Donald Trump's victory in the U.S. presidential election had removed one uncertainty, while possible interest rate and tax cuts could encourage Americans to spend more.

In contrast to personal goods, luxury spending on experiences, such as hospitality and dining, is expected to increase this year, Bain said.

The Information : Smart Glasses Proliferate

Smart Glasses Proliferate

The smart glasses concept is taking off. On Monday, Reuters reported that Amazon was developing smart glasses for its delivery workers to help provide them with directions. Today the Financial Times reported that Baidu, the Chinese search giant, is developing its own smart glasses for consumers.

According to the FT report, Baidu’s smart glasses will offer many of the features available on the Meta Ray-Ban glasses already on the market. The Ray-Bans enable wearers to play music or make phone calls, take photos and ask Meta AI for help. Regular wearers can attest that they work well, even if the AI assistant is still very primitive.

Baidu’s AI will be based on the company’s large language model, known as Ernie, and will help wearers “track calorie consumption,” among other things, according to the FT. On that point, caution is warranted. It’s hard to believe an LLM can accurately provide calorie information just from looking at an item of food, at least based on existing technology. When I uploaded a photo of a bag of peanuts to Google Gemini and asked how many calories were in the bag, for instance, Gemini responded that it was difficult to say.

--> +ve EssilorLux. (EI FP)