Why Stocks Dropped Again
What’s in Today’s Report:
- Why Stocks Dropped (Again)
- A Question About Silver
Futures are sharply lower following a very negative earnings pre-announcement from FedEx (FDX).
FedEx (FDX) earnings were terrible as the company reported EPS of $4.37 vs. (E) $5.10 and guidance was even worse with estimates of $2.75 vs. (E) $5.46. The company sited significant macro-economic deterioration and the CEO warned about a “worldwide recession.”
Economically results were mixed as Chinese data beat estimates while UK Retail Sales were soft (–5.4% vs. –3.9%).
Today focus will be on Consumer Sentiment (E: 59.9) and more specifically the five-year inflation expectations. In August they were 2.9% and if they rise back above 3.0% that’ll only compound the damage from Tuesday’s CPI and push stocks lower, while a decline below 2.9% will help offset CPI and help support stocks (although I think it’d take a sharp from below 2.9% for stocks to fully erase these early losses).
