UNITED STATES: Shares of FedEx fell 20% on Friday as concerns about declining demand as consumers battle rising costs worldwide were heightened by the delivery giant’s rejection of a recently announced estimate.
The stock would experience its biggest one-day percentage drop at current prices, topping a 16.4% decline on Black Monday in 1987, wiping out roughly $11 billion in market capitalization.
The American company signaled that consumers are saving for necessities like gas and food ahead of the holiday season as rising prices deter casual shopping. Other major global logistics competitors, including Hong Kong’s Cathay Pacific Airways (0293. HK) and France-based transporter CMA CGM also made similar statements.
While U.S. stock index futures were down around 1%, rival United Parcel Service lost 5.7%, XPO Logistics lost 4.5%, and e-commerce behemoth Amazon.com lost 2.6%.
Following the announcement, Deutsche Post in Germany plummeted 4.6%, Royal Mail in London sank 10.2%, and DSV in Copenhagen fell 5.7%.
Investors are concerned about the U.S. Federal Reserve’s rapid pace of interest rate increases to curb surging prices that could tip the economy into a recession as they react to FedEx’s disappointing quarterly results.
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