Event: FedEx (FDX) announced earnings for the quarter ending August 31 and the results were not pretty. While the company did hit the top end of its own recently reduced guidance, the press release included another slash to guidance for the current quarter ending November 30. For the full year ending May 31, the company reduced profit expectations by 10%. The company cited a weak global economy for the reduced guidance. Shares are trading down 2% in premarket trading after the news was released.

Analysis: FedEx is an excellent barometer on the global economy. Its performance and reduction of guidance is telling, but is the news telling us anything we don’t really know? It is not and perhaps that is why the stock is only down 2% in premarket trading. The power of QE Infinity is evident in the market reaction to this news. Investors are betting that a wide open spigot on the stimulus front will douse any concerns over weakness in the economy. The market cares about the future, not the past. I expect FedEx to open lower today and trade higher by the close.

Action: Day traders may be inclined to buy this stock on the open. Do not fight the Federal Reserve and QE Infinity. The bias for stocks is to move higher irrespective of bad news. FedEx will be a good test of that theory today.

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