EmailS&P futures suggest a flat to slightly lower open.
FedEx raised a huge red flag on the earnings outlook. The company had warned on September 4 that earnings for the quarter ended August 31 would be weak, and this morning earnings were reported at $1.45 a share, down from last year's $1.46 a share for this quarter. That's the good news. The company lowered earnings forecasts for the year ended May 31, 2013 to $6.20 to $6.60 a share. That is well below Wall Street forecasts that were about $7.25 a share a month ago. The company earned $6.41 a share for the prior year. That means no growth in earnings for a company with an expanding global presence that is highly sensitive to economic demand.
Current Wall Street forecasts call for a decline in S&P 500 third quarter profits, but a quick rebound to double-digit earnings in the fourth quarter and next year. The FedEx warning is a cold splash of reality that should precipitate some Wall Street downward revisions across a number of industries.
European and Asian stock exchanges are broadly lower. The Shanghai index fell 0.91%. It is down 17.3% over the past year. It is down 65% from about five years ago and 41% from about three years ago. European stock exchanges are down about 0.4%.
Oil prices are apparently lower this morning after a drop of $3 in less than a minute at one point yesterday. Oil prices make the financial headlines quite a bit, but it seems like every time I look oil is between $95 and $100 a barrel. Meanwhile, gas prices at the pump seem to keep inching higher. Oil isn't a major concern unless it spikes higher on international tensions.
The VIX volatility index is back below the very low historical level of 15. There isn't much fear in this market.
Founder and Chairman, Briefing.com
