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Two Ways To Play: FedEx Raising Rates

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Strengthen your portfolio in good times and bad.

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FedEx Raising Rates

FedEx (FDX) announced today it will increase standard rates for FedEx Ground and FedEx Home Delivery by an average of 4.9%.

The global package-shipping giant said on its website that FedEx SmartPost will also change and that these rates will be effective January 4, 2010.

FedEx previously announced that it would increase rates for FedEx Express by an average of 5.9% for US domestic and export services. But the rate increase will be offset partially by adjusting the fuel price at which a fuel surcharge applies.

This follows a move last month by rival UPS (UPS) which said it would raise air and ground freight rates by an average of 4.9% in 2010.

From the Bull Pen: FedEx may be an option, but also consider the iShares Dow Jones Transportation ETF (IYT) which has a 10.6% holding of FDX. In looking at the daily chart, we can see overhead resistance at $73. But one can fade (read: buy) any weakness today; a sell stop can be set below recent lows (near $70).

From the Bear Cave: If you think higher energy prices are ahead as well, consider a downside play in Claymore/NYSE Arca Airline ETF (FAA). One strategy would be to enter short positions at resistance points $28.50 and $30. If and when.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check around the World

Asian trading closed with the Nikkei 0.45%, India -0.49%, Hang Seng -0.25%, Shanghai caa1.61%, and Taiwan -0.44%.

Across the pond, we see the FTSE -0.64%, CAC -0.62%, DAX -0.49

As of 8:15 AM EST, S&P Futures are trading +2.00 to 1100.00. Nasdaq futures are +1.250 to 1781.50.

A Look at Commodities

Over in commodities, crude oil is -0.60 to 75.86 while gold is -11.20 to 1207.10 this morning. Silver is -28.2 to 1882.0 and copper -1.550 to 320.40.

The dollar Index is -0.0100 to 74.6600.

On the Radar

Economics

08:30 Nonfarm Payrolls -120k cons.
08:30 Unemployment Rate 10.2% cons.
08:30 Average Workweek 33.1 cons.
08:30 Hourly Earnings 0.2% cons.
10:00 Factory Orders 0.2% cons.

Happy Friday! See you at Festivus!
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No positions in stocks mentioned.

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