FedEx warns stock markets could be ‘first in a row’

FedEx warns stock markets could be ‘first in a row’

It may just be FedEx’s bad news for investors. The package delivery giant rocked the stock markets with a profit warning on Thursday evening that sent its shares tumbling more than 20% the next day, its biggest daily drop on record. There are fears of similar news from other companies in the coming weeks.

FedEx’s announcement was the “first in a series of warnings that we could see for the fourth coming,” Swissquote senior analyst Ipek Ozkardeskaya told Bloomberg, adding that it “came as a slap” to investors and that ” it is a solid” sign for the economy. started to slow down.

Some other people the understanding of prophecy. Carl Riccadonna, chief U.S. economist at BNP Paribas, told MarketWatch on Friday, “You’re going to see more firms talking about the slowing economy, less pricing power.” Some companies may “beat the math,” he told the outlet, but ultimately macroeconomic trends drive microeconomic stories.

Global recession

FedEx CEO Raj Subramaniam didn’t shy investors away from the doom and gloom. When asked by CNBC if a “global recession” was ahead, he replied, “I think so; these numbers do not reflect very well. We are seeing volume decline in all segments worldwide. So we assume at this point that economic conditions are not going to be good.”

His company’s bad results are a reflection of everyone else’s business,” he said on a particularly ominous note.

FedEx, because of the wide range of goods it ships around the world, has long been considered part of global economic growth.

The company was expected to announce its first quarter earnings on September 22, but opted for the pre-earnings announcement, not surprisingly given how badly its results fell short of forecasts and expectations.

In its warning, FedEx said it expected business conditions to ease further, adding that it would withdraw guidance for the remainder of its fiscal year. He blamed the poor performance on “global volume volatility” which “accelerated” in the final weeks of the quarter.

“We are facing these headwinds quickly, but given the speed with which conditions have changed, the first quarter results are below our expectations,” Subramaniam said in a statement. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to improve productivity, reduce variable costs, and implement structural cost reduction initiatives.”

The company also said it would postpone hiring, reduce flight frequency, close 90 office locations, and reduce capital spending by $500 million in the coming year.

This story originally appeared on Fortune.com

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