Stocks Fall Again As FedEx Warns Of Global Recession
3:00 pm Friday, September 16th, 2022
US stocks fell on Friday morning after FedEx served investors a brutal pre-earnings announcement about the state of the global economy.
FedEx issued an earnings warning for its fiscal first and second quarters that was attributed to worsening macroeconomic conditions, both internationally and in the U.S. This only added to existing concerns about inflation, rising interest rates, and a potential hard landing that have been weighing on index performance all week.
Selling is fairly broad in nature, but disproportionately affecting names similar to FedEx. The Dow Jones Transportation Average is down 9.4% with every component showing decent losses.
Every S&P 500 sector trades in the red. A risk-off mentality has the defensive-oriented consumer staples (-0.2%), utilities (-0.3%), and health care (-0.8%) showing the slimmest losses. Energy (-3.2%) and industrials (-2.6%) bring up the rear.
Small and mid cap stocks are faring somewhat worse than their peers with the Russell 2000 (-2.5%) and S&P Mid Cap 400 (-2.2%) showing the steepest losses.
Treasury yields have come down some from overnight highs. The 2-yr note yield is up one basis point to 3.88% while the 10-yr note yield is unchanged at 3.45%.
Energy complex futures are mixed with WTI crude oil futures unchanged at $85.10 while natural gas futures are down 5.6% to $7.85/bbl.
The preliminary September University of Michigan Index of Consumer Sentiment checked in at 59.5 (consensus 60.0) versus the final reading of 58.2 for August. In the same period a year ago, the Index of Consumer Sentiment stood at 72.8.
