Written by Noel Randwich
(Reuters) – S&P 500 futures fell on Thursday, indicating that traders expect Wall Street to open its doors in its next session, after FedEx (NYSE:) withdrew its financial forecasts and raised concerns about a global economic slowdown.
After trading resumed after a daily maintenance period, it was down 0.6%. Nasdaq futures fell 0.7%.
FedEx fell 16% late in the day after the company said its first-quarter financial results were affected by weak global volume and withdrew its financial forecast, saying it expected a further deterioration in business conditions.
The warning has hit stocks of other delivery companies, as well as retailers. United Parcel Services (NYSE:) stock is down 5.7% in extended trading, while Amazon (NASDAQ::) is down 1.8 and targeting (NYSE:) is down nearly 2%.
Thursday’s late Thursday criticism of investor sentiment comes at a sensitive time for Wall Street. During the normal trading session, the decline fell 1.1% as a batch of economic data failed to alter the expected trajectory of violent tightening by the Federal Reserve amid growing alerts of a global recession.
Jeffrey Gundlach, CEO of DoubleLine Capital, said he expects a recession in 2023, and the Federal Reserve is likely to be very aggressive in its rate hike campaign aimed at controlling decades-old inflation.
“It looks like we’ve come to the front of the recession,” Gundlach said during a conference call with investors. “The odds of 2023 are high”.
The mixed economic data has many investors anticipating a 75 basis point interest rate hike from the Federal Reserve at the conclusion of its monetary policy meeting next week.
After dropping about 4% so far this week, the S&P 500 is still 6% above its closing low in June, a level that some investors have bet would be the lowest point in the stock market’s decline this year.