Cisco is not the bell-weather it has been in the past. Some of its business is down because there are more alternatives from competitors, "the cloud" keeps growing, and also many products have become commodities.
There are many other companies I would consider better measures of how the economy is doing.
These include Johnson and Johnson (JNJ) diversified into consumer care products, health care, pharmaceuticals and extensively diversified globally; General Electric (GE) a conglomerate with major diversification, having divisions in aerospace, water, health care, power generation, and entertainment, and Procter and Gamble (PG), having similar characteristics to JNJ and GE.
Cisco's product line is far more sensitive to obsolescence than that of the other companies I have mentioned. Compare the shelf life of a generator, or paper products, or household goods with a warehouse full of inventory in leading edge technology that depreciates rapidly.
Every time the market makes a move we get a raging headline. I was taken aback by one of our own headlines recently that claimed Bill Gates was slashing his interest in Microsoft Inc. (MSFT) stock, when in fact he was only selling 2 million of his 619 million shares, less than 0.03%. Somehow we have to rationalize everything -- even if we have to make it up -- ridiculous!
If there was no news whatsoever for a month, the stock market would move up and down anyway and Cisco would not even be a drop in the ocean. Certainly there are stories that impact the market greatly, but sometimes there are not.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value™ and Serious Money. Disclosure: He owns shares and/or options of GE, JNJ, and MSFT.