Market Commentary

The FedEx Warning


Yesterday, FedEx came out with weak earnings and forecast for 2019. Since their business is delivering packages worldwide, they are considered a bellwether for world economic activity. The Chairman cited slower global trade and difficulty in integrating a European competitor it bought last year.

Slowing international GDP growth has been forecasted by the International Monetary Fund (IMF) and that situation is only being worsened by the China/U.S. trade dispute. Is that what the FedEx numbers and projections are telling us? The dog fight between the two is causing the rest of the world economies to put their tails between their legs. It appears the fight is winding down but even if they call a truce, it will take some time for the rest of the smaller dogs to feel safe again. So do not expect an immediate bounce in the world economy even if the U.S. and China come to terms.

The winner in this worldwide struggle is the U.S. Its economy is mostly reliant on internal economic activity. The same can’t be said for the rest of the world.

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