Markets unexpectedly tumbled yesterday, breaking a streak of small daily gains. FedEx (FDX) lost 12% on nearly 20 million shares traded. Analysts piled on against FedEx, souring the market’s mood.
FedEx did not execute well on its Express delivery business. Operating income fell by 60% for the air-based Express unit. Investors cannot ignore the uncertain macroeconomic conditions and lower retail shipping volumes in the quarter.
Markets might treat FedEx’s troubles as company-specific. Other carriers are less expensive, whereas FedEx does not offer more reliability and cannot charge a service premium.
The negative sentiment hurt the AI leaders. Nvidia (NVDA) fell by 3.01%, AMD by -3.34%, and Broadcom (AVGO) by -2.56%. Alphabet’s (GOOG) rise yesterday might continue today. Thursday’s market needs leadership from this $1.7 trillion firm by market cap. Still, the markets need electric vehicle leader Tesla (TSLA) to fund support at $230. TSLA stock is in a prolonged downtrend that started when shares peaked at nearly $300 in July.
Automotive stocks could move today if Tesla stock does not strengthen. Ford (F) and General Motors (GM) are reliant on a strong economy. The firms have excess vehicle supplies at dealership lots. They did not cut the prices of their 2023 models. Dealerships cannot take delivery of 2024 models when supply is too high.
