U.S.-China Trade Talks
China's Commerce Ministry said the two sides will hold high-level negotiations in Washington early next month, while the U.S. side confirmed a sit-down "in the coming weeks." Preliminary talks are expected to be in mid-September, the Commerce Ministry said following a phone call Wednesday with China's Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.
Here is what Jim had to say about talks with China:
"I shudder to say this, but it's still a China market. Now I think that's a false construct, but any, and the reason is, is because as I've been saying, you have talks, talks fail, so market rallies, market goes down, tariffs get put on, market goes down again, tariffs don't seem to matter that much, market goes up. Notion that there'll be talks again, market goes up. So we've been rinsing and repeating the same story. So if you're buying it off of these talks, and Lighthizer does matter by the way. But remember, you're buying them off of Mnuchin. When you see Navarro saying that the talks are okay then I'm going to believe, otherwise I'm sticking by my theory early on, as I have all year, that all tariffs are going to rise between 25 and 30. It's easier to cut a tariff than it is to not do one. So top of mind is, is that don't get your hopes up, own stocks because of fundamentals, not because of the possibility of China."
Palo Alto Networks Earnings
Palo Alto Networks posted adjusted earnings of $1.47 a share, 5 cents better than analysts' estimates, and said it can achieve a compounded annual growth rate of 20% by 2022 for both billings and revenue from its cloud-based security products.
Revenue was $805.8 million, up from $658.5 million a year earlier and ahead of forecasts of $803 million. Billings in Palo Alto's fourth quarter rose rose 22% to $1.1 billion. Analysts had expected billings of $995 million.
The biggest takeaway according to Jim Cramer?
"The guy who's really been keeping it down, which is a very good analyst Credit Suisse who raises his price target by like 10 bucks has to start dealing with reality. And the reality is is that there was a strategy all along and the strategy was to be king of both the firewall and the cloud. Right now, ZScaler (ZS - Get Report) and CrowdStrike (CRWD) are the cloud. What Nikesh is saying, you can't just have the cloud and no enterprise. You have to have them both. He's got that strategy. I know that Cisco does too. That strategy is a winner."
Watch the video above to see what else Jim had to say about trade, Palo Alto, and the markets.
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