Week the s p is tracking for a third week in a row of losses, down 1. 3 nasdaq futures up 73 points. Weve got a lot to talk about on a summer thursday. Our road map starts with earnings walmart posting better than expected results fellow down component cisco gets a lift, beating with its Quarterly Results and talking up a. I. Ceo Chuck Robbins will be joining us here. Plus, investors continuing to digest fed minutes released yesterday. The tenyear note yield hitting a fresh high were going to begin with walmart, raising fullyear forecast the retail giant benefitting from customers seeking bargains. U. S. Comps up by a better than expected 6. 4 and ecommerce jumping 24 led by pickup and delivery theyre clearly taking share because theyre out comping their competitors and the industry theyre crushing it i want to straighten some things out here when you have ecommerce up 24 , when you have advertising, which is just free money, what are the Gross Margins there, 35 , much higher margin. Flywheel, i think, is cranking price gaps back to school, all very strong. So, they give a little bit of a light guide. Thats what people are freaking out about. There are no other holds, and i have to tell you, its really a light on the operating income growt growth buy it youd buy it . Even though sentiment is very strong already it ran up into earnings up 5 or so. Sams is just okay. But ive got to tell you i sit here and i look at this number, and i think, the general merchandise was unbelievable okay down low single digits, 300basispoint improvement. Lets sit back for a second and enjoy what is happening here the stocks had a monster run. We can compare it to target. By the way, and i was just i kind of missed yesterday i was too soft there was a pride issue in the month of may in target, and they acknowledged it. I soft pedalled it. Shouldnt have done that it does look to have stabilized i think that walmarts really good if you want to sell walmart, ill buy it from you how about that well, its certainly better valued than well, targets better valued than walmart at this point but walmarts outperforming. Walmart is the place to go. Other than tjx so far. Tjx has been the star of the retail show. You did not get that at tjx. Thats okay. I love tjx. You know what i thought was interesting was that tjx had a positive inflection in home goods, which all the doom and gloom we hear about housing from target and home depot when you go there, the selection was much better this morning. I was thrilled and by the way, the thanksgiving selection, im told, is going to be fantastic ollies is calling it super cycle of merch they are using Bed Bath Beyond once the leases ive been trying to get some for pickle with my friends. Theyre taking them from us. Tjx in home goods well, you know, when the bed bath go under, you can fit 12 pickleball courts. What are you laughing about . Youre on trend you play pickleball . Ive taken some lessons i mean, along with everybody else does that somehow make it worse . Its a good thing thank you for minimizing it what ubs is saying, they were bullish into the print, everybody was on walmart, was that results set the bar high for other retailers this quarter, and it should be supportive of its premium multiple yeah, why not they doubled down i mean, its very easy when you see a stock thats up this much to say, you know what look, its its done. Back to school, which is going to be good, is already factored in what i think people dont understand is that the buy side is always looking for a couple to get behind, and theyre getting behind i thought theyd get behind home depot more they did have two Straight Days at home depot that was good. Aisle to aisle was great, and decker was very positive but when you see tjx, people merely think if thats so strong, its bad no its just theres a lot of companies that had a lot of extra inventory, and they came in and said on the call, this is the best inventory theyd ever had to pick and choose from. So, walmart raised guidance they raised second half sales guidance, but in the implied guidance, though, marks a step down in the sales growth than what were seeing and thats causing concern. Theyve been conservative they could be conservative you know, were going to be talking to Chuck Robbins, ceo of cisco. I think he was conservative. Right good quarter its not a bad thing to underpromise, overdeliver. Im looking at chuck hes doing his fantasy team. Hes drafting the falcons running back way too high. I think it raises a question about what these retail results say about the overall economy and the market this morning, what is in focus, the tenyear treasury yield. 15year high set yesterday at the close. Overnight goes to 4. 31 the economys very strong you read the fed minutes i know you did that. Of course you have to understand, the yield curve is wrong everyone tells you the yield curve that book that i know that you love, bestseller, along with peyton place. The people that were buying the tenyear, they were just wrong, but you never hear from them they were wrong. No, now theyre selling the economy is very strong. There is no this soft landing hard landing dichotomy, other than in the incredible apple sevenpart hijack, there is no crash landing and there is no soft landing. Theres no landing that could be a problem for the market why because of what the minutes signalled yesterday. Most policymakers still see significant upside risk to inflation and there is a tightening bias. Well, jay is jay my pal, jay, of course jay is doing exactly what you really want, not if youre some person on wall street whos really rich and doesnt want anyone else to get rich. He wants people to be employed im sure he looked at the African American numbers and asian numbers and wasnt happy they werent that good what hes trying to do is make it so everybodys employed he is, i think i think what hes trying to do is make sure inflation doesnt creep back up, and theres risk now of another wave yes youre going to lower the boom on the jackson hole . Youre going to do a jackson hole lowered boom thing . I know theres a lot of hype into jackson hole, and traditionally, hes used jackson hole to signal some kind of shift. I dont see how he can do that next week, because theres not enough data evidence for them to either signal that theyve done enough or that theres more to do clearly, there was a split in the minutes. Amen. Youve got it dead right i dont know that hes going to say anything. Oh, no i think its split. I would be concerned that were way away from 2 inflation i think he just needs to see employment tick to 4 , and it hasnt it had 3. 5 today, weve got jobless claims, and this was an important number because it measured the august nonfarm Payroll Survey it was down, which is good fewer americans it came down from the elevated level that we saw the week before. Theres no major layoffs in this economy. There havent been. Philly fed was also an upside surprise best in a long time look, how about we go at it the other way . We have a big story today. Cvs loses a contract to mark cuban and amazon we need every single line item needs to be down we need to see rents down. We dont have actual homes down. But if you can just pick at the lines, maybe you dont have to have a spike in unemployment just what does that have to do youre talking about the blue shield california. This is the nonprofit signing with amazon. I think thats a considerable mark cubans drug company we know that mark cuban has worked hard to try to develop a system where your drugs so has amazon i tried the amazon policy. Theyre down im just saying, one after another after another, if you can tick down at whats been high, we know theres been a big surplus lately of the departments being built in some areas. Maybe we dont have this is my noncrash landing, nonsoft landing. Maybe were going to be winning as long as we play for time, sara i think were playing for time i think jays playing for time but i think the question that the market is grappling with is, fine, no landing thats certainly showing up in the data but is good news really good news does it mean the answer is yes should you buy stocks on that then dont you have to worry about the fed being higher for longer we have a pause right now, as i think people are same people who were wrong in bonds are now, of course, selling stocks, because theyre just wrong. Its okay. One of the things that i really hate yes, the bond markets big. I hear, the bond market is really big so its right how about if its really big but its wrong the economy is good. How about this one 20 years, 17 years, playing that game, how long its been you know what . It never should have been down here and then you start hearing, well, the governments selling a lot of bonds why should the Mortgage Rate be as low as it is . Why should everyone have enough money to be able to buy homes with cash . Youre saying its not such a bad thing were at these elevated levels . You are a horse whisperer, which makes me a horse i dont know if i like that. Dont call yourself a horse since the financial crisis, we have not seen yields like this its fine its been a lowyielding environment. Im saying its a positive sign im saying what it says is we have the best economy in the world. For tech even i mean, affects multiples. No, tech look, i know there are people using 800 target for nvidia now. I wish they werent doing that it should hurt tech. But this is not the end of the world. We are in an adjustment period its going to last another three, four weeks. Were adjusting to this new world where Interest Rates are higher, which they should be, because the economy is better, and were also you know we can talk all about the money coming from washington, and it is just hitting. Just now i know. Inflation reduction act. Chips act. Its always funny, isnt it so much the chips act is just hitting right now. I know. So, were going to talk about 2024 and whether norecession trade is in there. Good morning, sara. Good morning. Were also going to talk about that 800 price target on rosenblatt, calling for 2 trillion for nvidia much more. Well be joined by ciscos ceo, Chuck Robbins, on the other side of the break everything from the companys earning beat to his a. I. Strategy he is here at post nine. More squawk on the street straight ahead my cpa told me i wouldnt qualify for the erc tax refund, so i called Innovation Refunds. Their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your Small Business qualifies. Wow, you get to watch all your favorite stuff. Take the first step to see if its to die for. And its all right here. Streaming was never this easy, you know. This is the way. You really went all out didnt you . Um, its called commitment. Could you turn down the volume . Here, you can try. Get way more into what your into when you stream on the xfinity 10g network. Were going to have some fun on this one. Cisco is rising. Get this, reported a beat on the t top and bottom line. The stock is moving up Chuck Robbins, cisco ceo, joins us now for a first interview i have never heard you this exuberant, including things like saying, 57 billion in revenue, the highest Revenue Growth in a decade and how about the fact that you have got this 30 total sequential product line, which is the highest second highest in 20 years . You came out firing last night well, its just the facts tell us how the facts happened well, if you think about whats happened over the last year, with our sales organization, when they open a quarter, they give us a forecast, and when things are getting worse, they tend to miss the forecast by the end of the quarter. And this quarter, they came, opened the forecast, they nailed month one, they nailed month two, and they ran through month three by hundreds of millions of dollars, and the year over years are all wacky because of the pandemic and the supply chain stuff, but the sequentials are what weve been watching, and you know, normally, theyre 18 to 20 , and they were in excess of 30 from q3 to q4, so its one quarter, but it was certainly felt better than the ones weve seen in the past. I like the pastiche of how you did it, including what youre doing with hyperscalers, where, by the way, half a billion in sales for what is basically a. I. So, i think that a lot of people feel like you got left behind, including yourself, in the last revolution that didnt happen this time no. The first wave, we missed, and we have been very open about missing it, and the last few years, weve reinvested, built some very highend silicon thats very Energy Efficient and superpowerful, and so we are well positioned as we enter this next phase, this Artificial Intelligence phase, we Just Launched a new asic in that for june were working with some of the hyperscalers theyre giving us input for the design on the next chip, and were talking about designing silicon specifically for the customer i think were in good shape. That was true its going to be sticky. And also taking share, which i thought was terrific three points i also like the fact, and you didnt play it up, i would have more, that youre becoming a Software Company with absolutely with this recurring revenue, which is what you and i have been talking about for years, and its fantastic we have 35 billion in rpo, and english, please run pass option its a remaining performance obligation i like your wide receivers, and i like your running back, but please, lets just keep going. Remaining performance obligation scott hearn, our cfo, between rpo, the 18 billion on the books for this fiscal year, and the backlog, we have about 40 of our revenue thats already inside cisco for the year. If you go back seven, eight years ago, that wouldnt have been the case. We were trying to chase down orders every quarter the other data point i gave on the call is we launched in 2017 subscriptions on our networking hardware, which everybody thought was a bit crazy. And i always told them, when the renewal opportunity for that became meaningful, i would share that with our analysts and shareholders, and yesterday, we gave that number for the first time, that this fiscal year, we will have close to a billion dollars in Software Renewals on hardware that we would have just monetized one time in the old model. And so absolutely. So, were feeling good about that some people thought your guidance was a little light. Including jim given how enthusiastic i did you mentioned it. Given how enthusiastic you were about the pickup in Enterprise Spending that youre seeing. It was still down 14 year over year, and there are a lot of unknowns and dynamics out in the marketplace right now, and so, we took the forecast from the team, we took the backlog, we took the ar, the rpo and everything like that we run the p l we were probably prudent is what i would say. But is that code for conservative we were prudent jim also said that. We were prudent we think we were prudent but its look, theres a lot of theres still a lot of variables, obviously, that are happening in the marketplace right now. What does the macro look like what do we take away from this as it relates to how companies are feeling about spending the good news for us is it was our largest quarter ever of Enterprise Software agreements i didnt hear much, you know, well, were going to hold off on that so, that was Service Provider remains challenging. The telco space remains very challenging. Verizon and at t are very distinctly hobbled from the old days of cisco when John Chambers ran it and that was just kind of money in the bank. It was a much larger percentage of our business back then and today, as you look at the Service Provider segment for us, the hyperscalers are a very significant percentage of that business now were talking about the big guys here. The cloud providers, the big cloud providers. And so, you know, theyll continue to spend, and we think sort of the second half of the our fiscal year, we think the telcos will stabilize, and then we think in the next few months well start to see the hyperscalers tend to buy in sixmonth cycles, so we think middle of our fiscal year, theyll buy for the first half of calendar 25. Do you think that the hyperscalers actually know what theyre going to do with all this equipment they bought from you when it comes to Artificial Intelligence oh, yeah. I think they know. Well, if you look at what theyre doing today is theyre building out these a. I. Networks, and fundamentally, these gpus have to be connected and theyre sharing information, and they have to do it very quickly. Weve talked about the fact that we think the networking opportunity underneath the gpus could be three to four times this is underneath nvidia they have to connect it to azure. They have to connect it to amazon web services. And the historical way of connecting that is through a technology called infini band. Owned by . Nvidia. However, the cloud providers are telling us they want to move to ethernet, which is what we do, and we actually are a Founding Member of something called the ultraethernet consortium, which is designed to actually tweak the standards a little bit its a little geeky, but tweak the ethernet standards a bit to make it more adaptable for these super highperformance environments now, you have been a leader in two things. One is work from where you want, and the other is, helping the homeless in what was your headquarter area still is give us a sense of where people are working and also, frankly, what are you doing for the homeless youre probably the most active ceo in the country, best rating for for the glass doors number one place to ork number one place to work. Number one ceo for homeless. You dont talk about either one. Im asking you to talk about them for a second. I think from a work perspective, what weve said is were leaving it with the teams, and weve seen an uptick lately. People are starting to want to come back to the office. Including you our new york office was packed yesterday yeah when im but im traveling all the time my office is an airplane but we really we left it with the teams, and so our engineering teams in particular are spending a lot more time