FDX Fixes Itself in Rebound Rally, Mind Headwinds Into Earnings

Company Overview - FedEx is set to report earnings, with analysts expecting an adjusted EPS of $4.70 on revenue of $22.88 billion [1] - The stock has remained flat this year but has seen a 2% increase this month, trading around $286 [1] Economic Indicators - FedEx serves as a barometer for the global economy, particularly in relation to supply chains and consumer spending [2][3] - The company is expected to provide insights into the health of the consumer and small businesses [2] Earnings Expectations - Analysts are focused on FedEx's earnings and the effectiveness of its cost efficiency programs implemented over the past year [3] - The company is undergoing a restructuring, including a spin-off of its freight division, which may impact future earnings [4] Market Conditions - FedEx has faced challenges due to tariffs and geopolitical tensions, which have affected its visibility and guidance [5][6] - The stock experienced a significant drop earlier this year due to uncertainty surrounding tariff impacts but has since regained some confidence [6] Key Metrics - The options market is pricing in a potential 6% move in FedEx shares following the earnings report [8][11] - Key metrics to watch include margins, cost reduction efforts, and shipping volume, which will provide insights into the overall economic strength [8][9] Trading Strategy - A trading strategy involving a double calendar position has been suggested, allowing for exposure to both upside and downside movements [12][14] - The strategy involves buying a call and a put option at different strike prices, with a low input cost and a wide range for potential profitability [14][16]