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NEW YORK (

TheStreet

) -- The

volatility

finally yielded a

bounce for stocks

but it's still not entirely clear what Wall Street got so excited about in the final hour.

The central bank's pledge to keep interest rates at near-zero levels through mid-2013 removes an element of uncertainty but it's not like stocks were selling off in fear of tightening. Otherwise, the assessment of the economy was suitably dour, and

Federal Reserve

made it clear that

QE3

isn't on the table in 2011. That's got market watchers wondering about other stimulus methods.

Ian Shepherdson, chief U.S. economist at

High Frequency Economics

, raises the possibility that the White House could take a page from the Republicans in an effort to get the economic recovery back on track.

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"We wonder if President Obama might be bold enough to propose that taxes be cut, substantially, for a while," he writes. "It seems to us that Mr. Obama has a prime opportunity to call the Republicans' bluff. They say they want tax cuts -- Republicans exist to cut taxes -- so why not offer them tax cuts and dare the GOP to vote against them?"

Shepherdson says if the Obama administration can somehow pull this off, it would be a big boon to GDP, which in turn should help the job market. He estimates tax cuts, engineered to match reduced spending expectations, of $400 billion in 2012 and $500 billion in 2013 would add $300 billion to incomes, giving GDP a potential boost of 2.5% in 2013.

As for Wednesday, corporate news could again get short shrift. Volume will continue to be important. The New York Stock Exchange saw 8.93 billion shares change hands on Tuesday, the 12th busiest session in its history, according to

The Wall Street Journal

. The surge in the final hour was impressive but a high-volume validation of the move on Wednesday would be even more so.

Meanwhile, Dow component

Cisco Systems

(CSCO) - Get Cisco Systems, Inc. Report

has made a habit of disappointing Wall Street with its guidance. The networking equipment giant is reporting its fiscal fourth-quarter results after Wednesday's closing bell, and the average estimate of analysts polled by

Thomson Reuters

is calling for a profit of 38 cents a share in the June-ended period on revenue of $10.97 billion.

Cisco shares have been hit hard this year, dropping more than 30%, and the majority of the 47 analysts covering the stock have turned negative on it with 26 hold ratings and 4 underperforms. Sterne Agee is bullish, however, rating the stock at buy with a 12-month price target of $25. The firm expects Cisco to succeed where many of its smaller competitors --

Juniper Networks

(JNPR) - Get Juniper Networks, Inc. (JNPR) Report

,

Riverbed Technology

(RVBD)

,

F5 Networks

(FFIV) - Get F5 Networks, Inc. Report

and

Brocade

(BRCD)

-- have fallen short and meet the consensus view. It also thinks the guidance will be solid.

"For its outlook, we anticipate guidance for the October quarter to be about in-line to modestly below consensus at $11 billion and $0.39 in EPS," Sterne Agee said in a preview on Monday. "We have not really picked up material negative feedback in channel and customer activity but believe CSCO may choose to err on the cautious side reflecting growing macroeconomic concerns."

The firm sees Cisco as a long-term play and is hungry for details on the financial implications of recently announced plans to reduce global headcount by 11,500.

"We continue to believe CSCO represents a compelling opportunity for investors with a multi-year investment horizon with a lot of bad news priced in with shares near its lows during the depths of the 2009 financial crisis," Sterne Agee said. "We find the risk-reward favorable with 1-2 points of potential downside that assumes an 8x multiple and no credit for its net cash position and 10 points of potential upside to $25 in a more bullish scenario with a 12.5x multiple and giving credit to its $5

per share in net cash which represents 1/3 of its market capitalization."

The other notable names reporting their quarterly results on Wednesday are

Macy's

(M) - Get Macy's Inc Report

before the opening bell, and

News Corp.

(NWS) - Get News Corporation Class B Report

after the close.

Macy's is seen posting earnings of 50 cents a share for its fiscal second quarter ended in June. The department stores have held up well, and Macy's delivered a same-store sales increase of 5% for July last week, beating its own outlook and saying total sales for the quarter came in at $5.94 billion, already above what Wall Street was looking for.

The stock bounced 5.4% on Tuesday to close at $25.44 but it's still down more than 4% for 2011. As recently as July 22, the shares were sitting at a 52-week high of $30.62, and 10 of the 14 analysts covering Macy's have strong buy (5) or buy (5) ratings on the stock.

BMO Capital issued a research note ahead of the report, maintaining its market perform rating and saying it expects Macy's to lift its fiscal 2011 earnings outlook to meet the current consensus view of $2.58 a share. Macy's current guidance is for a profit of $2.40-$2.45 a share.

"We look for 2Q11 EPS of $0.52t o exceed consensus expectations of $0.49, leading to a seventh consecutive quarterly surprise," the firm said. "Sales and EPS guidance will be important given recent macro-events and, given management's history of conservatism,we don't expect them to materially alter second half expectations despite the strong first-half 2011 trends."

News Corp. shares are down nearly 15% year-to-date after tanking in the wake of the

News of the World

phone-hacking scandal. Rupert Murdoch & Co. are likely prepping for another difficult conference call as we speak. Wall Street is expecting a profit of 29 cents a share in its fiscal fourth quarter ended in June, and it came in a penny short last time around.

The rest of Wednesday's earnings roster is rounded out by

Advance Auto Parts

(AAP) - Get Advance Auto Parts, Inc. Report

,

Bankrate

(RATE)

,

Computer Sciences

(CSC)

,

Harman International

(HAR)

,

Jack in the Box

( JBX),

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

,

LDK Solar

(LDK)

,

MakeMyTrip Ltd.

(MMYT) - Get MakeMyTrip Ltd. Report

, and

Polo Ralph Lauren

(RL) - Get Ralph Lauren Corporation Class A Report

, among other lesser names.

The economic calendar is again pretty much a yawner with wholesale inventories for June due at 10 a.m. ET. The consensus is for a 1% increase but since the data is fairly old at this point, and not terribly pivotal anyway, this shouldn't move the needle.

There's also crude inventories for last week at 10:30 a.m. ET, and the Mortgage Bankers Association's weekly index measuring mortgage application and refinancing activity at 7 a.m. ET.

And finally, the Treasury budget for July will be released at 2 p.m. ET. This could actually get a bit more attention than usual, given the debt-ceiling drama the country just endured. Consensus is for a deficit of $132 billion for the month.

--

Written by Michael Baron in New York.

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