According to Michael Lombardi, lead contributor to Profit Confidential, Cisco System reported earnings that were fine, but its earnings outlook for 2012 painted the picture of a very nervous business sector unwilling to spend on Internet gear and a weaker global economic environment. In the recent Profit Confidential article, Cisco Sounds the Alarm Bell, Lombardi points out that, despite the cash large corporations have on their balance sheets, they are not spending.
Cisco noted that the European debt crisis not only meant weaker consumer and business spending in Europe, but it is also preventing large corporations from spending here in the U.S. and in Asia because of the perception of a coming global economic slowdown, says Lombardi.
Lombardi believes this economic weakness might last for some time, as Cisco reported that it was uncertain about its earnings outlook in Asia going forward. Cisco is considered a leader in the technology space and its earnings outlook is a barometer of how the economy is doing, says Lombardi.
Cisco also noted that weak government spending in the U.S. and in Europe was also an issue that was going to persist in 2012, says Lombardi.
Due to Cisco and other technology firms weak earnings outlook, the expectations for Internet technology spending growth worldwide has been slashed by Lombardi and many forecasters and analysts for the remainder of 2012.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments
when gold traded under 300 an ounce. In 2006, it begged its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
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Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardis current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.