StockTwits Market Preview 6/17/09

• kileyay
• June 17th, 2009

FedEx & Futures

If FedEx ($FDX) is a bellwether of the broader economy, rocky times lie ahead. The shipping giant reported worse-than-expected Q4 losses of $876 million. Revenue dwindled to $7.85 billion, a 20% year over year decline.

The pre-market release was a bomb. Dow futures dropped nearly 20 points on impact. S&P futures are faring better, down less than 3 points. FedEx shares are selling at over a dollar discount – for around $50 in pre-market trading.

FedEx’s outlook was grim. The company can’t contend with costs amid an “extremely difficult” business slowdown.

Crude & CPI

Should it continue to correct lower, the price of crude oil will be one less concern for FedEx and the consumer. WTI crude is trading below $70, a key level. Check out weekly energy inventory data, due out today from the EIA.

Cheaper food offset pricier gasoline, and the Consumer Price Index (CPI) inched up very slightly. The consumer saw a seasonally adjusted price increase of 0.1% in May, the Labor Department reported.

Washington & WPI

Mergers and restructurings abound in all sectors.

The White House will detail its financial regulation reform plan, which would abolish the Office of Thrift Supervision and make the Federal Reserve a consolidated supervisor of large institutions. [Proposal here.]

Watson Pharmaceuticals ($WPI) said it’s going to buy privately held Arrow Group for $1.75 billion in cash and stock. $WPI looks set to gap down at the open.

E*Trade ($ETFC) said it would sell $400 million in stock and look to exchange more than $1 billion of existing notes and raise capital. The stock is down big early.

Overseas

Asian markets were mixed. South Korea’s Kospi lost 0.6% and Hong Kong’s Hang Seng closed 0.5% lower. But China’s Shanghai Composite tacked on 1.2%, and the Nikkei edged up 0.9% — its first gain this week.

European markets are tracking lower for the fourth straight session. London’s FTSE 100 gave up 4300, a key level. It’s down 0.9%.  Germany’s DAX and Paris’ CAC 40 are each off about a point.

Technicals

The volatility index ($VIX) says there’s fear in the air. The VIX broke out of its long downtrend this week. It popped above 30 — a level of support and resistance — with ease and continued higher.

The VIX sliced above its 20 day exponential moving average (green line) and is poised to break its 50 DMA (red line).

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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