Core Viewpoint - The financial report of FedEx (FDX.US) may provide insights into the sustainability of the current stock market rally, as indicated by the Dow Theory, which emphasizes the need for confirmation between industrial and transportation indices [1][4]. Group 1: Market Trends - The divergence between the Dow Jones Industrial Average, which has been reaching record highs, and the transportation index, which remains sluggish, signals potential market concerns [1][4]. - Since 2005, the current gap between these indices has only been observed during significant downturns, such as the 2008-2009 financial crisis and the 2020 pandemic [1]. Group 2: FedEx's Performance - FedEx's stock has declined by 20% since 2025, making it one of the worst performers in the S&P 500, while its competitor UPS has seen a 33% drop, reaching near lows not seen since 2013 [5]. - In contrast, the S&P 500 has risen by 12% this year, and the Dow Jones by 8%, while the transportation index has decreased by 2.5% [5]. Group 3: Financial Expectations - Analysts expect FedEx to report slight revenue and adjusted earnings growth in its Q1 FY2025 report, with market reactions likely hinging on the outlook for the holiday season [7][9]. - FedEx has only provided guidance for the current quarter, while UPS has abandoned its full-year earnings forecast [7]. Group 4: Policy Impact - Investors are particularly focused on how FedEx will address the impact of the cancellation of the "de minimis exemption," which previously allowed packages valued at $800 or less to enter the U.S. tax-free [9]. - The cancellation of this policy has intensified pressure on FedEx and UPS, especially after it was fully implemented globally in August [9]. Group 5: Theoretical Perspectives - The Dow Theory suggests that the current market conditions may indicate a "huge bull trap," as the divergence between the indices raises concerns about economic health [12]. - Some strategists argue that the Dow Theory may be less relevant in the digital age, as it does not account for the logistics data from major retailers like Amazon and Walmart, which have their own logistics systems [10].

Core Viewpoint - FedEx's stock price declined in pre-market trading after Evercore ISI downgraded its rating from "Outperform" to "In Line" due to ongoing demand headwinds that may pose greater risks to short-term earnings per share (EPS) expectations [1] Group 1: Rating Downgrade - Evercore ISI has lowered FedEx's target price from $249 to $243 [1] - The downgrade reflects concerns over persistent demand challenges facing FedEx [1] Group 2: Factors Affecting Performance - Two main factors are expected to exert additional pressure on FedEx: the global phase-out of de minimis exemptions and unresolved volume issues in FedEx Freight [1] - Analyst Jonathan Chappell indicated that while FedEx could mitigate some revenue impacts through network restructuring related to the "2.0 network," the cost-saving benefits are likely to materialize in the second half of the year [1] Group 3: Stock Performance - As of the report, FedEx's stock price fell by 0.5% in pre-market trading, with a 52-week price range of $194.30 to $308.53 [1] - FedEx is scheduled to release its earnings report after the market closes on September 18 [1]