September 16, 2022
Before the opening of trading this morning, the folks at Federal Express –FDX threw a stink bomb into all the Wall Street happy talk that the bull market would resume shortly, as inflation was “peaking” and the Federal Reserve would pull off a “soft landing” for the economy.
FDX’s chairman Raj Subramaniam told analysts that slowing business conditions has caused the company to sharply cut projections for the next quarter and withdraw its full year guidance. Shares fell 10% on this downbeat forecast.
Even more chilling to investors was his statement that we are headed into a world wide recession, with particular concerns about China and Europe.
After, a sharp down opening the market struggled back to only a 200 point loss by the end of the day, however, giving off some more technical sell signals.
Is it too late to move to the sidelines? I think that where there is smoke, there could be fire. And I think we are in the early stages of the Fed tightening cycle, so downside risks still remain elevated, in my opinion.
I also see strong negative economic signals from the Chinese property market where more and more Companies are unable to pay the interest on their bonds let alone repay their investors.
No one has a crystal ball, but caution seems wise as we head into an unpredictable final quarter for 2022.
Mortgage Rates have moved up to the 6% level which will be a signifcant damper for Real Estate transactions. The number of unsold houses has been slowly increasing and the number of delinquencies on mortgages and credit cards are slowly increasing.