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Global recession coming – FedEx CEO

Raj Subramaniam news

The shipping giant’s stock suffered a hit after its chief made a grim prediction.

The global economy is headed for a recession, FedEx CEO Raj Subramaniam told CNBC’s Jim Cramer on Thursday. The shipping behemoth’s executive predicted that the financial issues that forced his company to withdraw its full year guidance after missing earnings and revenue estimates for its first quarter will soon befall the rest of the world.

“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 told the Mad Money host, explaining that FedEx cut its projections for second-quarter earnings by nearly half after seeing weaker-than-expected demand “in every segment around the world.”

“We are a reflection of everybody else’s business, especially the high-value economy in the world,” he said.

Asked more directly if “we” were “going into a worldwide recession,” Subramaniam clarified his prediction of doom. “I think so. These numbers don’t portend very well.”

Subramaniam said FedEx has been seeing weekly declines in demand since June, despite anticipating an increase after Chinese factories that had shut down for the Covid-19 pandemic reopened. FedEx has announced major cost-cutting measures, including shutting 90 retail locations and five corporate office facilities, canceling some projects, reducing flights and postponing hires.

FedEx’s stock dropped a further 21.4% on Friday – its worst daily drop ever – after plummeting 15% on Thursday, vaporizing $11 billion in market capitalization.

Subramaniam’s predictions for the global economy come on the heels of a dismal week for Wall Street, in which the S&P 500 and Nasdaq had their worst performance in months. The latest US inflation report, released on Tuesday, signaled the Federal Reserve is likely to impose further rate hikes, compounding the economic pain already felt by consumers and businesses alike.

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Source:RT News

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4 COMMENTS

  1. Depends on how high the Fed inerest rate goes up, and how long it stays high. All booms and recessions are due to overplaying the fiat dollar with supply and demand at the moment. Most people are also fed up but many are forced into slavery to keep roof over head and food on the table. How much further people can take it? I dont know.

  2. We are heading for an environmental crises which means less environmental units per person, which in turn means less $ per person. It is as simple as that. We can no longer just print money as we once could, the $50+ billion our government just printed to deal with covid has generated increasing inflation which will keep going until this $50+ BN is written out off the books by ~devaluing~ our whole currency by that amount. Just printing money now has adverse effects on the general economy; this ~forecloses~ on more recent western ways to avoid recessions

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