Speaker 1: Broadcasting live to New York Bloomberg Elimon Frio to Washington,
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Speaker 1: nineteen and around the globe the Bloomberg Radio Plus app
Speaker 1: and Bloomberg dot Com. This is Bloomberg Markets, isn't Bloomer
Speaker 1: Marcus Corey Johnson here out over the San Francisco Bay
Speaker 1: and r AM nine sixties studios. Carol Master back on
Speaker 1: the world headquarters in Midtown Manhattan. Yep. Yes, indeed, and
Speaker 1: we're gonna talk a little about FedEx because they did
Speaker 1: come out with their results just moments ago. We do
Speaker 1: see the stock moving in the after hours. In fact,
Speaker 1: it's up about one and a half percent. So we'll
Speaker 1: break down the quarter, uh and see what it tells
Speaker 1: us about fed X and potentially about the economy as
Speaker 1: FedEx moves so much stuff around. First up, though, back
Speaker 1: to your top as his stores and other news out
Speaker 1: after the closing bell here is Hill. All right, I
Speaker 1: thank you very much, Carol Master. I do want to
Speaker 1: begin with FedEx, and I know you'll have a little
Speaker 1: bit more on this story. A lot more coming up
Speaker 1: right here on Bloomberg Radio. But FedEx is forecasting full
Speaker 1: year profit in line with analyst estimates. It says earnings
Speaker 1: will be thirteen twenty to fourteen dollars a share for
Speaker 1: the fiscal year through next May. Analysts hand predicted thirteen
Speaker 1: sixty one. Also out after the closing bell, Adobe Systems
Speaker 1: racking up another quarterly report that beat analysts estimates for
Speaker 1: sales and profit, proving again that a bet on switching
Speaker 1: to a cloud based subscription model for its digital media
Speaker 1: and marketing software is paying off. Stocks lower today, falling
Speaker 1: the most in a month, retreating from records as crude
Speaker 1: oil slid into a bear market on concern the global
Speaker 1: supply glut will persist. Also today we had West Texas
Speaker 1: Intermediate down two point two percent to three dollars twenty
Speaker 1: three cents, down ninety seven cents. The dollar rose as
Speaker 1: fedeficials continued to reiterate a moderately hawkish stance on monetary policy.
Speaker 1: Drew Mattis is chief market strategist at MetLife. Continuing to
Speaker 1: high rates. I think if you look at most of
Speaker 1: people on the ft, they've been around the block. They've
Speaker 1: seen inflation pick up when no one expected it too,
Speaker 1: and they're responding in the way that their life experience dictates,
Speaker 1: Whereas I think a lot of the people perhaps trading
Speaker 1: tips and a nominals maybe haven't seen high levels of
Speaker 1: inflation in their lifetime. Five Index down sixteen, four thirty
Speaker 1: seven down seven tenths of one percent. Now as stack
Speaker 1: down fifty one down eight tenths of one percent down,
Speaker 1: Industrials down sixty one down three tenths of one percent.
Speaker 1: The ten you up nine thirty seconds, zeal there two
Speaker 1: point one five percent. I'm Charlie Pellaton. That's a Bloomberg
Speaker 1: business slash. Thank you very much, Charlie Pelly. You listen
Speaker 1: to Bloomberg Markets on Bloomberg Radio oh X one. They're
Speaker 1: want to bring everything to everyone, um, and we got
Speaker 1: to check on how they're doing at that mission. The
Speaker 1: company out with its latest quarterly results. Stock is up
Speaker 1: one and three quarters percent in the after hours. Let's
Speaker 1: talk a little about the quarter. Athtic Lee class Cow
Speaker 1: is with us. He is senior Transport Logistics and Shipping
Speaker 1: Analyice at Bloomberg Intelligence are in house group of Alice
Speaker 1: and Lee joins us from Bloomberg headquarters in Princeton, New Jersey. Lee,
Speaker 1: nice to have you here. Hi, tell us a little
Speaker 1: about the quarter because investors seem to like what they
Speaker 1: got based on the after hours tree. But what pops
Speaker 1: out for you? Yeah, I guess there was no huge
Speaker 1: surprise here. There's a lot of volatility and uncertainty surrounded
Speaker 1: the mark to market pension accounting adjustment. So when you
Speaker 1: exclude that and some one time cost related to their
Speaker 1: T and T acquisition earnings, who were above expectations um
Speaker 1: for the quarter. They came out about four and a
Speaker 1: quarter versus uh three uh and three three dollars eight
Speaker 1: eight cents um, and that was kind of on better
Speaker 1: better than expected top line growth by about a hundred
Speaker 1: and sixty million dollars, So that's the good news. And
Speaker 1: also they guided for the full year, excluding a bunch
Speaker 1: of one time I them mostly in line where consensus is,
Speaker 1: so uh, no big surprises, and I think the market
Speaker 1: that happens to like no big surprises, And I guess
Speaker 1: the you know. And some of the good news in
Speaker 1: terms of the quarter are yields growth and their express
Speaker 1: and ground businesses seem to be accelerating the growth Express
Speaker 1: increased yields by five percent and ground by seven percent.
Speaker 1: And also they're less in trucklet business, which is under
Speaker 1: their freight heading. Yields increased seven percent year of year. Uh.
Speaker 1: And that that is that's the good showing. That means
Speaker 1: they're they're getting thing that they need. Well, what's that about?
Speaker 1: Is that is that about fuel costs coming down? Is
Speaker 1: that about um just being a more aggressive pricing? Yeah?
Speaker 1: I think, you know, so much of what we saw
Speaker 1: with GPS the other day with their rate increases in
Speaker 1: search charges. You know. Uh, the integrated logistics providers that
Speaker 1: provide parcel deliveries, are you know, want to get paid
Speaker 1: for expanding their networks, improving their networks to be more
Speaker 1: accommodating for e commerce and and and there. Um kind
Speaker 1: of I guess toeing the line in terms of being
Speaker 1: very rational with their pricing. You know what's interesting is
Speaker 1: I've always thought that the pure Internet play is something
Speaker 1: like a FedEx or a UPS because someone's got to
Speaker 1: deliver all this stuff. Uh. And we see, you know,
Speaker 1: we're getting used to getting everything and anything delivered to us.
Speaker 1: Um is that going to be the case? Are you know, Amazon,
Speaker 1: we see buying planes. I mean, does FedEx and ups
Speaker 1: have to be worried. Um. I don't know if they
Speaker 1: have necessarily be worried, but they definitely have to be
Speaker 1: less reliant on some large players like an Amazon. Um
Speaker 1: ups is more exposed than than FedEx. Um ups uh
Speaker 1: gets around two to three times more revenue from Amazon
Speaker 1: than a fed X does. But you know what, what
Speaker 1: Amazon is doing what a lot of people like to
Speaker 1: talk about is, you know, with whether they're acquiring whole
Speaker 1: foods or buying planes, or become like a freight forward,
Speaker 1: or they're just controlling more of their supply chains. Is
Speaker 1: very similar to what Walmart has done over the years.
Speaker 1: Walmart has one of the largest trucking fleets in the US,
Speaker 1: but they still buy a lot of purchase transportation. UM.
Speaker 1: So you know, Amazon is trying to control as much
Speaker 1: as they possibly can. Um So. You know, but with
Speaker 1: the growth of e commerce, that's going to benefit everybody,
Speaker 1: is going to benefit fed X, GPS, truckload providers and
Speaker 1: less than truckload providers as well. Do you think that
Speaker 1: the impact when you look at the shippers of of
Speaker 1: this whole foodsteal with Amazon? I mean, are you you
Speaker 1: surely are trying to imagine what their business is going
Speaker 1: to look like. Amazon's business is gonna look like after
Speaker 1: the deal. Yeah, you know, from a supply chain standpoint,
Speaker 1: I mean, you know, they're getting closer to affluent customers. So, um,
Speaker 1: you know, whether they're going to use their Whole Foods
Speaker 1: current distribution network or whether they're going to use parts
Speaker 1: of their retail stores um as a as an area
Speaker 1: where people can come pick up their stuff to lower
Speaker 1: their costs for transportation and offer maybe discounts if you do,
Speaker 1: and sort of pick up like like a Walmart is
Speaker 1: doing right now. UM. So that that is just a
Speaker 1: way in which they can leverage you know, Whole Foods
Speaker 1: um um network of stores and distribution centers. So what's
Speaker 1: what's the one concern when you look at the FedEx story. Well,
Speaker 1: you know, the one I guess concern is that e
Speaker 1: commerce and global trade stops. Um. You know, I don't
Speaker 1: think e commerce growth is going to stop. If you know,
Speaker 1: you look at most expectations, it's going to be you know,
Speaker 1: something like four trillion dollars globally in a couple of years, um.
Speaker 1: And and that's going to benefit the FedEx is and
Speaker 1: the U b s is of the world. You know,
Speaker 1: if you see increased protectionists uh in terms of government
Speaker 1: stances with with global trade, that is obviously a bad
Speaker 1: thing for the FedEx is and ups as the worlds.
Speaker 1: Not only are they delivering stuff locally to us, but
Speaker 1: they're also connecting countries, um, you know, in continence, and
Speaker 1: that's extremely important to their growth strategy, especially you know
Speaker 1: when you know FedEx t NT, which hopes to build
Speaker 1: out the the European platform and be stronger not only
Speaker 1: intra Europe, but you know North America to Europe, Europe
Speaker 1: to Asia. Uh, and with protectionism that would not bode
Speaker 1: well for freight flows and trade in general. Um. Interesting stuff,
Speaker 1: interesting quarter from FedEx, Eily, thank you. Watch Glasgow is
Speaker 1: a Bloomber Intelligence senior transportation analysts helping us out with
Speaker 1: FedEx and just want to mention the MSc I will
Speaker 1: include China A shares in its Emerging Markets index. This
Speaker 1: is Bloomberg Radio. Let's get some world of national news
Speaker 1: headlines with Adrian Mitchell. She's in our ninety n one
Speaker 1: studios in Washington. D C. Corey and Carol Belgian soldiers
Speaker 1: have neutralized as suspect following a small explosion inside the
Speaker 1: Central train station in Brussels. The prosecutor's office there says
Speaker 1: it is too early to say whether this was a
Speaker 1: terrorist incident. There is no word of other deaths or injuries.
Speaker 1: Media reports from Brussels say a man inside the station
Speaker 1: was wearing an explosives belt. Republicans are trying to get
Speaker 1: a healthcare measure ready for a vote, as Democrats, led
Speaker 1: by Senator Chunk Schumer, slam GOP leaders for keeping their
Speaker 1: colleagues in the dark. It boggles the mind that the
Speaker 1: Republican leader is moving forward this way without letting anyone
Speaker 1: but members of the Republican Senate Caucus see the bill,
Speaker 1: and even many of them have said they haven't seen it.
Speaker 1: Senate Majority leader Mitch McConnell says Republicans are responding to
Speaker 1: their constituents. We've heard so many distress stories from constituents
Speaker 1: have been hurt. Thankfully, the Senate will soon have a
Speaker 1: chance to turn the page on this failed law. McConnell
Speaker 1: says a vote to repeal Obamacare could come as early
Speaker 1: as next week. Ford says it will save a billion
Speaker 1: dollars by moving production of its Focus models from Mexico
Speaker 1: to China. There had always been a debate within for
Speaker 1: whether they should be spending more money on new production
Speaker 1: for a car that doesn't really make much money, if
Speaker 1: if anything at all, And when the new CEO came in,
Speaker 1: he said, no, we're not going to do that. We're
Speaker 1: just going to make them at an existing factory in China,
Speaker 1: and we can import them from China. Bloomberg News Detroit
Speaker 1: bureau chief David Welch spoke with Corey and Carol Global
Speaker 1: News twenty four hours a day, powered by more than
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Speaker 1: hundred twenty countries. I'm Adrian Mitchell.