FedEx Expects Worldwide Economic Recession
FedEx may have just sounded off as the new canary in the coal mine about a worldwide economic recession.
Global economic numbers “don’t portend very well,” according to FedEx CEO Raj Subramaniam during a media interview Thursday evening.
His words proved timely as the stock market indexes gapped down to open the Friday session, continuing losses for the week.
Stock indexes take another hit Friday
The three major stock market indexes all opened down more than 1% to kick off trading Friday as market participants reacted to the revelations of a potential worldwide economic recession.
FedEx announced late Thursday that the company expects lower revenue expectations ahead and is tightening expenses associated with operations. FedEx also plans to slow hiring and close offices and stores.
FedEx adjusted its revenue forecast as it foresees falling short of profit targets, and missed Wall Street expectations in its earnings report (first quarter ending Aug. 31).
FedEx shares opened down more than 22% on Friday and maintained that low through midday. This coincided with the sell-off across the major indexes – Dow, Nasdaq, S&P 500 – where the Dow started the day down more than 300 points.
FedEx may be the vanguard voice ahead of increasing economic woes worldwide that could end in a recession.
“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S., Subramaniam said in a statement.
Don’t wait: trade the market as it plays out
As market-influencing companies start talking recession, Simpler’s traders continue to look for opportunity in the uncertainty of facing a worldwide economic recession.
Simpler’s traders see the uncertainty as presenting a “trader’s market.” This is an environment where traders can actively trade – within their risk tolerance – and turn market volatility into an opportunity.
As John Carter, Founder of Simpler Trading, often says, traders don’t know what is going to happen next, but traders don’t need to know what’s going to happen next in order to make money.
The Simpler Trading team constantly searches for “high-probability moments in time” through technical analysis of stock charts. These moments must meet a predetermined checklist of signals for price direction, what is and isn’t working, and target personalized profit criteria.
This is the trading plan daily, but traders must avoid getting caught up in the emotions – negative or positive – with the recurring shifts up or down in the market.
As the Simpler team points out in the online trading rooms, traders get in trouble when they see the market falling (or rallying) and suffer from FOMO – Fear Of Missing Out. FOMO causes traders to chase a trade even though they are late to the party.
Simpler’s traders are focused on the S&P 500, particularly the SPX, as a leading indicator of how the market is moving. This has been a key strategy with so many sudden twists and turns, like the FedEx hint at worldwide recession.
The key for Simpler’s team is targeting quicker trades, and trading the market, not waiting for buy-and-hold scenarios.
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