- After boosting their guidance just last week, FedEx issued weak guidance this morning which has the market declining. The most important piece of the press release, however, was not the guidance, but commentary:
“Positive momentum in the global economy and continued execution of our business strategy drove volume growth across all FedEx transportation segments, highlighted by increased international shipments.”
FedEx is sandbagging the current quarter. No doubt about it. More importantly, however, they see some traction in the recovery – particularly abroad. This gives more merit to the overweight foreign, underweight domestic trend we’ve been seeing across our strategy outlooks.
- Despite signs of recovery from FedEx it’s likely to be well below trend as we continue to see in the Chinese water torture that is initial jobless claims. Claims once again spiked higher this morning to 480K. Without job creation it’s unlikely that the economy can sustain any sort of trend-line growth. Jobs remain the missing link in the recovery and it’s simply staggering that we are this far into the crisis and so little progress has been made….
- This great chart from Bespoke has me wondering: can any sort of real bull market be in our future without a continued rally in the banks? After all, they are the crux of the problems and they were the leaders of the equity market rebound (recall this rally started when the banks got M2M and began reporting better earnings). If bubble history serves us well, we could be in for years of sideways to down action:
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.