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Pre-Market Primer: Fed Says Unemployment Could Be 6% if Not for Congress


And German confidence fell off a cliff this month.

MINYANVILLE ORIGINAL Stocks fell today on global growth concerns as German confidence deteriorated and FedEx (FDX) cut its outlook on economic troubles.

Ahead of the opening bell, stock futures suggested that US stocks will follow Europe and Asia downward today. Dow (^DJI) futures declined by 0.21% to 13,442, S&P 500 (SPY) futures dropped 0.19% to 1,451.30, and Nasdaq (^IXIC) futures fell 0.13% to 2,842.50.

Global economic bellwether FedEx reported earnings that beat estimates, but issued lower-than-expected full-year guidance on economic concerns. Income for the August quarter was $1.45 per share, down from the year-earlier period. Analysts expected the shipping company to report earnings per share of $1.40 from $10.7 billion in revenue. Earlier this month, FedEx cut its own earnings guidance for the last quarter. Today, the Memphis-based company said that it expects to earn no more than $6.60 per share for the full year, missing the most bearish estimates by $0.30.

"Weakness in the global economy constrained revenue growth at FedEx Express during our first quarter and affected our earnings," CEO Fred Smith said. "We are taking further actions to reduce costs and adjust our networks to match current and anticipated shipment volumes."

Spain sold 4.6 billion euros of 12- and 18-month bills this morning; the average yield on the 12-month note was 2.835% and 3.07% for the 18-month. Ten-year yields fell 6.3 basis points to 5.912%. Still, high borrowing costs might lead Spain to take up the European Central Bank's offer of bond-buying assistance.

Germany's ZEW Survey showed that the country's financial experts are significantly less optimistic about the direction the economy is going. The index was expected to fall from 18.2 in August to 18 in September, but plummeted instead to 12.6.

After breaking through the $700 mark yesterday, Apple (AAPL) shares are continuing to rise on the euphoric iPhone pre-order figures. Apple clocked over 2 million orders of the iPhone 5 in the first 24 hours of pre-orders -- almost double the first-day sales of the iPhone 4S last year. Apple shares rose even further in the pre-market to $700.24.

The US NAHB Housing Market Index, due to be released at 10:00 a.m. is expected to show a rise for August. The index is projected to rise to 38 from July's 37.

While Chinese demonstrators are smashing Japanese vehicles, Toyota Motor Company (TM) announced that it will suspend manufacturing in China. Protests, largely unperturbed by the government, have intensified and spread to at least 100 cities on today's anniversary of the Manchurian Incident, which precipitated Japan's full-scale invasion of northern China in 1931. Other Japan-related businesses are shuttered. The trade relationship between the two countries is worth over $340 billion.

The Federal Reserve of San Francisco issued a study that quantified the damage that fiscal uncertainty has wrought on the economy. The Fed analysts said that "had there been no increase in uncertainty in the past four years, the unemployment rate would have been closer to 6% or 7% than to the 8% to 9% actually registered."

Twitter: @vincent_trivett
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