*YIKES* Earnings *JUST OUT* COLLAPSE in Economic WARNING.

holy smokes I can't believe what was

just said both about the Federal Reserve

but then also a huge warning from a

company major American company that's

giving us a red flag and it's often

considered a red flag for the economy

and even though this stock has been

doing extremely well lately it ain't

doing well today let's talk about that

in just a moment and we're going to get

into why One bank is actually calling

what the FED did and orwellian move yeah

interesting okay first though before we

get into the orwellian move and all that

good stuff we really got to talk about

what just happened and what just

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not okay first though after this FedEx

folks this is not good take a look at

this this is the chief executive officer

over at FedEx in the earnings call that

just came out minutes ago for the June

July and August a quarter this it's kind

of sort of an interesting earnings

calendar because it really encapsulated

that week or summer that June July but

their forecast comes in weaker as well

suggesting that the issues that they're

facing here are actually continuing not

only are they forecasting weaker demand

but their margin got hosed by about 24%

on adjusted operating margin in the

quarter and that's because demand Trends

are weaker than expected as people are

downgrading to cheaper shipping options

folks This is FedEx and if you look at

FedEx stock right now in after hours

it's down about

11% and here's what was said on the call

the CEO says well thanks for the

question I will just start by saying yes

this point that we've talked about

before the soft industrial economy is

clearly Weighing on businessto business

volumes and it was definitely much

weaker than we expected and we have to

make adjustments accordingly as you know

shipments linked to industrial

production are the highest yielding and

most profitable at the same time

e-commerce is resetting I'm not exactly

sure what that means and starting to

grow again oh well there's your

definition so in other words hey we're

coming off a low on Ecom maybe we're

finally starting to see a little bit of

growth again out of etsy and Amazon and

some of these others when it comes to

the consumer but that industrial

production is so low FedEx is basically

saying we are hanging our hats on some

inventory rebuilding please in Q3 Q4

calendar which would be their Q2 their

Q2 would be September October November

but they ain't seeing it yet here on

September 19th e-commerce Trends re

resetting we're also seeing some modest

Improvement in global trade so the

Dynamics of the profile of traffic have

changed okay in other words hey like we

were not expecting such a massive

slowdown in the most profitable portion

of our business but hey at least cheaper

things have a greater volumes but let's

actually get into some of the other

details here look at this I'll just show

you the best parts of this and then I

want to get to what was just said about

the FED our results reflect a

challenging q1 demand environment which

was weaker than expected particularly in

the US domestic Market this is not like

it's just China don't get me wrong there

are a lot of surprises and problems in

China I mean you look at Mercedes citing

a rapid deterioration in the Chinese

economy reducing forecasts and expect

and they expect earnings to be

significantly below their prior years

Sketchers is warning about worst

conditions in China on the back half of

the year that this year is going to be

more disappointing than thought uh and

you've got now Nick T from The Wall

Street Journal warning that the wait for

data is probably going to leave us with

more bumpiness for the rest of the year

as the Federal Reserve tries to actually

truly calibrate where the hell we are

right now which is interesting and sort

of all adds to the volatility what we

might expect especially as we start

getting earnings from companies telling

us a little bit about what's going on in

the economy right now and companies like

FedEx they're not happy and they're

usually a big tell for what's going on

with the economy and they can be seen as

a leading indicator because they're

giving you guidance that is weaker than

expected listen in

our results reflect a challenging q1

demand environment which was which was

weaker than expected weakness in

industrial economy pressured our

business-to business volumes

particularly in the US and even though

we had increased demand for our lower

profit Services some of this demand

increase was driven by a shift in

preference so it's not like people were

actually shipping more it's that instead

of shipping things with a priority

service they were using deferred

services in other words people are

Expediting their shipments at lower

rates than they' used to something that

is typically associated with a harder

environment for the consumer or a time

when the consumer is feeling more strain

you'll see more of this from them

volumes were pressured led by weakness

in the US market not great let's go to

the next page here uh o actually we had

one more note here uh at the midpoint of

our Outlook range we expect the demand

environment to moderately improve as we

move throughout the year driven by a

slight recovery in the industrial

economy e-commerce growth and low

inventory levels we anticipate some

improvement in the pricing environment

skewed towards the second half of the

year which means they're not going to be

able to make any Improvement for Q2 in

terms of pricing because right now

they're just trying to get volumes back

and while they're hopeful that things

might get get better so far they have

not been getting better increased demand

for in the international economy helped

offset some of the pain so actually wild

here the outside of US market was

actually doing better for FedEx and when

they give guidance they suggest yes

maybe at the high end we can actually

expect uh some increases in industrial

production but at the low end of their

guidance they suggest that the demand

environment could continue to remain

being very competitive and that the

industrial economy remains challenged

it's not great going into Q2 especially

as they face a contract termination

headwind with the US Postal Service on

top of that uh so not great uh if we

keep going to another note here look at

this pretty dramatic changes when you

talk about the mix shift that we uh

experienced and volumes were there

volumes were pretty strong but again

that same volume that you know what they

call strong it's just basically the

moving of volume from one service to

another to the cheaper service was

surprising to them and something that

they didn't expect and something again

that they generally don't see with the

exception of times when the consumer is

really really pressured so not great not

a good report here at all uh from FedEx

now on top of this I find it very

interesting Robble Banks piece on the

FED as well as Scotia bang on the FED

take a look at some of these comments

here after the fomc cut to 50 basis

points as only in the past crises Jerome

Powell didn't tell us what was behind

the

recalibrating and so they are asking

themselves at Robo Bank wait a minute

what a 50 basis point cut as a message

that the economy is strong so does that

mean if they cut by 75 basis points the

economy is booming this sounds like

something out of George Orwell's

1984 war is peace freedom is slavery and

ignorance

is strength so when you start putting

together some of these pieces such as

the Bloomberg piece here via Yahoo

finance FedEx slums on quarterly profit

Miss and you have this quote here the

sense of urgency isn't there to pay for

extra or pay extra for Ultra fast

shipping said Bloomberg intelligence

that usually happens when things are

kind of tough when people are trying to

save money when they're strained when

you have this combined with a lot of

folks sort of raising their eyebrows at

the FED going wait a minute why did you

go and not tell us why at the same time

as you have other factors in the economy

we've already talked about weakening

whether it's the labor market or

otherwise and you have this right here

the restaurant performance index so

heavily negative that you generally

don't see this level of negative

performance outside of a recession you

kind of start scratching your head what

did the Federal Reserve see that freaked

them out and why aren't they giving us

more clarity this is something else that

right here Scotia Bank says as well the

fomc is signaling more worry about the

economy but didn't say why in doing so

they buried increased pessimism towards

Outlook in the remainder of their

projections and offered no explanation

of why now this is a a sign of a Federal

Reserve that would rather not tell us

what weakness they're seeing other than

a brief mention of the anecdotal

evidence in the beige book which you

know they tend to become a little bit

more anecdotally focused at turning

points in the economy which is bad

that's why they're going 50 uh but it's

also you know it'd be nice to have a

little bit more clarity because that's

not coming through apparently to markets

which are going to all-time highs right

now which is which is fine but it's

remarkable because the underlying

elements of the economy are not fine and

Jerome Powell essentially lied to us now

to some extent you can't blame him

because frankly if he comes out and says

yeah things are bad then the markets are

actually going to crash and then you're

going to he will literally create a

recession in one sentence the problem is

this is how the FED loses credibility

again it's not by creating a second wave

of inflation it's about lying to us

about the state of the economy and then

things get so bad that now nobody

believes the FED again until they

actually turn the money printers back on

and people are showered with money you

know what that does for inflation I

guess is anybody else's guess but anyway

look at this how can you cut 50 and

project easing through 2025 yet all of a

sudden we're delivering the same GDP

growth forecast through the entire

projection and a higher unemployment

rate than you previously predicted in

the textbooks that I studied long ago if

you ease more you probably get more

growth and lower employment all else

equal so yeah like obviously you're

concerned about GDP uh and labor here

but the fact that they didn't give us

clarity on this Outlook concern they

clearly have and nobody really asked

questions about this in fact they go as

far as saying Powell Got Away got got

away scotf free from having to explain

what was happening on the economy it's

to them a sign that the Federal Reserve

has now entered a new era where the FED

has clearly ended its approach of

handholding into perfect meeting setups

and as a as a result you might expect

even more Market volatility around the

FED because now they're kind of being a

little secretive so let's see cuz we've

got a lot of fed speak coming up next

week uh you know one one fed speaker

tomorrow a bunch of them on Tuesday of

uh on Monday of next week and then a

bunch on Thursday of next week it's

crazy but anyway as you know coupon now

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you in the next one but in terms of the

economy not great right after the FED

meeting why not advertise these things

that you told us here I feel like nobody

else knows about this we'll we'll try a

little advertising in CR congratulations

man you have done so much people love

you people look up to you Kevin P there

financial analyst and YouTuber meet

Kevin always great to get your

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