why UPS and FedEx's earnings are a very good economic sign

[scheming daemons]

This week, both UPS and FedEx released earnings reports that were much higher than estimated.

This is a very good sign for the economy and jobs.

Why?

Because when those two companies have increasing revenues, it means that businesses are shipping more goods and people are buying more goods.

It is a very clear sign of robust economic expansion over the past 3 months.

Don't be surprised if the GDP growth announced on Friday is greater than 4%, and don't be surprised if the July jobs report the following Friday is greater than +200,000 for the private sector.

[Pirate Smile]

1. Gawd, I hope so. Everyone should hope so.

[wuushew]

2. lower fuel costs = greater profit

I will be back Friday if your 4% figure is wrong with some crow pie.

[Enrique]

3. are they shipping more goods?

or are they increasing earnings by cutting costs?

[Catshrink]

5. or by raising fees?

[xchrom]

4. Recommend

[Oregone]

6. Unless they are shipping signature-required, next-day foreclosure documents

[dtotire]

7. I hope You Are Right n/t

[Scurrilous]

8. K & R

:thumbsup:

[WI_DEM]

9. I hope you're right.

[Gidney N Cloyd]

10. I find myself transferring more business to online shopping from brick&mortar stores.

Even for some of my clothes. More productive use of my time.

On edit-- meant to add I wonder how many others are doing that and whether there's really a net sales gain or just mostly different sales process taking hold?

[DCBob]

11. But we are supposed to be in the "midst of depression".. why is there so much economic activity??

Im confused.

[girl gone mad]

12. More than a ittle legerdemain going on here, no?

We have discussed the influences of sentiment and expectations all month, and today provided two excellent examples of expectations imbalances within the markets. The first is FedEx. On June 15th, FedEx shares closed at $83.01. On the morning of June 16th, the company announced earnings and provided initial guidance for 2011 of $4.70 per share below street expectations of $5.07. The stock dropped nearly 6% that day despite a very upbeat conference call by management. A sloppy broad market fueled an additional sell of FedEx shares over the next couple of weeks. As the market bounced so did FedEx and last week the rally continued on good earnings news from competitor UPS. Today, a mere 6 weeks after that initial guidance, FedEx raised 2011 expectations to $4.90 per share based upon Q1 looking 15% better than expectations. FedEx Shares closed today at $83.39, higher than the June 15th close. It is remarkable that the company has managed to bring expectations down by $0.17 and subsequently wind up with a higher share price. For the time being since the revision has been upward, as have those of the competition, the market will likely expect future announcements to go in the same direction. One might be tempted to call this chicanery, but we have seen them do the same exercise in reverse in the past. Regardless, the actions and results merit being mindful of them.

Read more: http://www.businessinsider.com/wanna-see-how-fast-market-sentiment-has-reversed-dig-deeper-into-fedex-2010-7#ixzz0usPZWyvj

[wuushew]

13. I am waiting

show me the numbers.