What I find most interesting about today’s market environment is that the vast majority of economists, investors, and commentators are still debating the timing of a possible recession. The consensus appears to be that one could occur sometime in 2023. In fact, this week Goldman Sachs placed the probability of recession at 35%. The interesting aspect of this market debate is that a recession is in fact in progress for many key sectors of the economy, including economic bellwethers.
FedEx and the Economy
If there is one sector in the economy that serves as an economic bellwether it is transportation. The reasoning is straightforward, no physical good transaction occurs without it first being transported. By extension, transportation firms are an ideal real-time indicator of the current state of the economy.
As one of the leading transportation firms, FedEx (NYSE:FDX) serves as a high-quality, high-confidence canary in the economic coal mine. What FedEx is experiencing is highly likely to be representative of broad economic activity.
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