The media likes to say that earnings season officially starts when Alcoa reports, but I never thought that was very accurate. Things really get kicked off with FedEx, one of the most important economic bellwethers around. This morning’s earnings give us a little glimpse into the state of the economy. Here are some key takeaways:
- Revenue growth has slowed to 2%, which is consistent with the macro trend we’re seeing.
- Operating income was up 7% and margins expanded. Corporations are maintaining margins for the most part.
- They’re assuming US GDP growth of 2.1% and global growth of 2.6%. That’s down from 2.3% & 2.7% expectations last time we heard from FedEx.
- The global economic environment was described as “tepid global economic growth”.
Overall, it sounds like more muddle through to me.
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.