FedEx sees global slowdown, cuts profit outlook
FedEx Corp. says consumers are putting off purchases of electronics and other gadgets from China, another example of the global economic slowdown that's prompting fears of another recession.
The slowdown prompted the world's second-largest package delivery company to lower its earnings expectations for the fiscal year that ends in May. But while anxiety over the economy created a rout in the stock markets, and its own shares, FedEx isn't yet ready to predict another recession in the U.S.FedEx and UPS are closely watched indicators of broader economic health because they ship so many packages between consumers and businesses every day. When consumers and businesses are concerned about the strength of the economy, they tend to choose slower shipping options â¿¿ like switching from overnight express service to slower ground shipping â¿¿ to save money. It's the same move many made during the recession. ___ Mixed impact on consumers from Fed's 'Twist' Operation Twist doesn't give consumers much to shout about. The Federal Reserve's latest effort to boost the economy by driving down long-term interest rates won't have a big impact on home and car buyers, savers or credit card users. Any noticeable changes from the central bank shuffling $400 billion of its portfolio are likely to be mixed. Although borrowers may benefit from lower rates on mortgages and other fixed-rate loans, savers holding long-term bonds are likely to see their interest income dip. The stock market's skeptical reaction reflected the limited outlook for the program's impact. If the Fed's move spurs the economy, investors could see their portfolios climb. But the initial response of investors was a sell-off Wednesday and Thursday, partly because of the Fed's suggestion that the economic slump could last for years. ___ Berkshire Hathaway stock dips below $100,000