FedEx (FDX) Earnings Warning: Recession Harbinger or Single-Stock Hiccup?

When a firm as big and broad-reaching as FedEx forecasts a sharp earnings drop, the market’s going to react. What’s this say for upcoming earnings?

Photo of a Fed Ex driver walking away from the side of his truck
(Image credit: Getty Images)

Investors have plenty of worries – chief among them inflation and a potential recession. But the engine that ultimately drives the stock market is corporate profits. As long as earnings growth stays on track, then corporate America—and by extension, your stock portfolio—remains on solid ground.

Which is why the recent earnings preview from FedEx (FDX) was so unnerving. While the official report for the quarter ended August 31 comes out Thursday, FedEx warned on September 15 that it would have bad news, with quarterly results severely impacted deteriorating economic trends in Asia, Europe and the U.S. FedEx stock was immediately penalized, and is down more than 20% since this pre-announcement.

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Anne Kates Smith
Executive Editor, Kiplinger's Personal Finance

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage,  authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.