We’re told that FedEx Corp. FDX-N is a bellwether stock, a point that hits home whenever the global shipping company says anything that is out of line with our understanding of the global economy.
On Wednesday, the company gave a forecast for its earnings during the current quarter that were at the low end of expectations, raising some concern that, well, maybe global economic growth will also be at the low end of expectations.
We decided to take a look at FedEx over the past three years to see how its share price has navigated the good times, the financial crisis and recession, and the economic recovery. Is it an early mover?
If the past three years are any indication, the answer is no: The stock didn't anticipate any of the big market moves.
However, the stock certainly seems to over-describe moves by the broader index. Both FedEx and the S&P 500 began to decline at around the same time, in 2007 (okay, FedEx led the index, but its initial decline was very modest); both bottomed out on the same day (March 9, 2009); both rebounded impressively until late-April; and both corrected until recently.
What’s different about FedEx is the magnitude of its moves. While the S&P 500 fell 57 per cent from 2007 to its low in 2009, FedEx shares fell nearly 71 per cent. The S&P 500 then bounced nearly 80 per cent from this 12-year low, but FedEx bounced a more impressive 179 per cent. The recent correction sent the S&P 500 down nearly 14 per cent, but it sent FedEx shares down about 20 per cent.
