What FedEx Is Telling Us

The good news is that the S&P remains in positive territory for the month of December (so far), and volatility is dropping. So we are seeing technical improvement: higher highs and lower lows.

The bad news is that the news flow remains poor--the question is, how much poorer than expectations will the December economic numbers be?

Look at FedEx . Everyone knows shipping is weak. The issue is this:

1) FedEx is a classic early cycle stock;

2) if you believe the economy will start turning up in the second half of 2009, you will be considering buying FedEx NOW;

3) if you believe the economic recovery is pushed into 2010, there is no urgency to buy FedEx yet.

FedEx's commentary are making a lot of the people in camp 2) move into camp 3), because they are implying that global demand is softer than expected a month ago, and getting worse, implying a longer period of bumping along the bottom than some anticipated.

- The Dow 30 at a Glance

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