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Tuesday's Market Minute: Holiday Shopping, Holiday Shipping

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Tuesday's Market Minute: Holiday Shopping, Holiday Shipping

FedEx Corp. (NYSE: FDX) reports earnings today after the closing bell, with Zacks reporting an EPS estimate of $2.80 and revenue of $17.57 billion. The stock is nearly flat year-to-date, despite e-commerce retail orders increasing across the board. Holiday shopping season is a busy time for shipping companies – the USPS expects to deliver 16 billion packages between Thanksgiving and New Year's – and thus, potentially a lucrative time for FedEx.

However, the Wall Street Journal reports Amazon.com, Inc. (NASDAQ: AMZN) is preventing its 3rd-party sellers, which make up around 50% of the platform, from using FedEx's ground delivery network for Prime shipping as it develops and implements its own delivery service. Another logistical headwind for FedEx is the traditional holiday shopping season, which is the time between Thanksgiving and Christmas, is six days shorter than last year's.

This could result in fewer online orders, or perhaps even more of them as last-minute shoppers scramble, relying on ever-quicker expectations of delivery. Setting aside whether FedEx can fulfill all the orders, can it profit enough on them as more consumers demand free, fast shipping, with a tight labor market driving up wages?

Information from TDA is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade.

Image by John R Perry from Pixabay

Posted-In: Earnings News Emerging Market ETFs Commodities Retail Sales Markets ETFs General Best of Benzinga

 

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