FedEx Cautions on Global Economic Outlook
Today's financial recap and tomorrow's financial outlook.
FedEx (FDX) reported first quarter earnings in the morning of $1.45 per share and $10.79 billion in revenues. While the company beat current expectations, these expectations had been lowered two weeks ago when the company reduced its earnings forecast from $1.45-$1.60 to $1.37-$1.43, vs. expectations of $1.57. Regardless, the future earnings outlook for FedEx was bleak. The company forecast second quarter earnings-per-share at $1.30-$1.45, much lower than Street expectations of $1.67. Full-year EPS was forecast at $6.20-$6.60, which is also lower than the $6.99 estimate.
In Spain, the Bank of Spain reported that bad bank loans rose to 9.86% of total loans in July from 9.65% in June, a total of 169.3 billion euros in loans. Spanish bank lending also fell 4.53% annually. The Deputy Prime Minister of Spain also commented that the country may seek a EU bailout after Spanish bonds came under pressure after EU politicians have been complacent over taking further action.
Tomorrow's Financial Outlook
Overnight, the Bank of Japan's monetary policy committee will decide whether or not appreciation in the yen will warrant further bond purchases. Today, Nikkei reported that the committee was considering additional easing as exports had fallen due to a rising yen and a declining dollar. If the BoJ did decide to ease, this would continue the wave of global monetary easings we've seen over the past three weeks.
Building off of today's solid NAHB Housing report, the US will release housing starts and building permits in the morning. Economists are expecting a rise to 765,000 from last's month 746,000 in housing starts and a decline from 812,000 to 795,000 in building permits.
In earnings, General Mills (GIS), AutoZone (AZO), Bed Bath & Beyond (BBBY), and Adobe (ADBE) will report earnings. Adobe's earnings are expected to fall short of the $.59 EPS and $1.11 billion revenue estimates due to continued weakness in the PC sector.
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