Stocks fell again today after FedEx (NYSE: FDX) delivered an economic “truth bomb” last evening and again this morning. The Dow, S&P, and Nasdaq Composite all tumbled, driven lower by a huge earnings “miss” from the transport giant, revealed last night. Futures dipped in response.
Then, this morning, FedEx CEO Raj Subramaniam made things worse in an interview with CNBC’s Jim Cramer. Cramer asked Subramaniam if FedEx’s bad quarter suggests that a global recession is on its way.
“I think so. But you know, these numbers, they don’t portend very well,” he said.
“I’m very disappointed in the results that we just announced here, and you know, the headline really is the macro situation that we’re facing.”
Subramaniam also noted that shipping volumes decreased despite pent-up demand.
“Week over week over week, that came down,” Subramaniam explained.
“We’re seeing that volume decline in every segment around the world, and so you know, we’ve just started our second quarter,” he said.
“The weekly numbers are not looking so good, so we just assume at this point that the economic conditions are not really good.”
Subramaniam concluded:
“We are a reflection of everybody else’s business, especially the high-value economy in the world.”
Bulls did not like that, especially with a rate hike approaching next week. A recession plus inflation-fighting rate hikes? That’s the kind of thing long-term bear markets are made of.
And, today, the S&P finally broke support at 3,900, suggesting a date with the June lows is imminent. The stochastic indicator is showing that the index is oversold, but that doesn’t mean it will rally any time soon.
The same could be said for Roblox Corporation (NYSE: RBLX), which fell today after setting a lower high earlier in the week. The stock also closed below its minor bullish trend (yellow trendline) a few days ago.
This afternoon, RBLX closed below the 10, 20, and 50-day moving averages as well. The stochastic indicator suggests the stock has room to fall, too.
For those reasons, it might make sense to take RBLX short with a trade trigger of $38.42, below today’s low, as the general market scrambles to avoid a bigger drop to the June lows.
