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NEWS
A True Turnaround Tuesday

Turnaround Tuesday lived up to its name, with today’s market action essentially being the reverse of yesterday’s. We saw big tech bounce while the rest of the market (and assets like commodities) sold off. Let’s see what you missed. 👀

Today's issue covers FedEx flagging improving revenues, the cruise boom continuing, and a beaten-down EV maker receiving a lifeline. 📰

Here's today's heat map:

3 of 11 sectors closed green. Technology (+1.83%) led, & real estate (-1.41%) lagged. 💚

Lisa Cook was the latest Fed Member to reiterate that rate cuts will be appropriate “at some point” but that the timing remains uncertain given inflation’s slow(er) downward progress. Meanwhile, Michelle Bowman said rate cuts are inappropriate given inflation risk and that she’s willing to raise rates if inflation’s progress stalls. ⏯️

U.S. consumer confidence fell in May, with expectations for business conditions and incomes falling amid weariness around inflation. Still, activity measures remain mixed, with the Chicago Fed’s data indicating growth through a marginal uptick in the index to 0.18. 🔻

The S&P CoreLogic Case-Shiller Index indicated that housing prices rose to a new all-time high in April, up 0.4% MoM and 7.2% YoY. While that annual increase is less than the previous month’s 7.5% reading, it shows that the lack of supply continues to place upward pressure on prices. 📈

Boeing’s $35 per share bid for troubled supplier Spirit Aero hit a snag today, with the aerospace and defense giant switching from a cash to a stock offer after months of negotiations. ✈️

Aerospace manufacturer Airbus fell 11% in European trading after cutting its 2024 financial targets due to supply chain issues. ✂️

Wholesale pool supplies distributor Pool Corp. fell 8% after revising its full-year earnings guidance. And Industrial supplies company Enerpac Tool Group fell as much as 9% after reducing its guidance due to recent sales declines. 📉

Advanced silicon battery company Enovix jumped 35% on the news it will deliver silicon batteries and packs for a mixed-reality headset. It’ll receive a one-time payment for production tooling, with more payments later. 🔋

Other active symbols: $CHWY (+11.28%), $SNAP (+6.64%), $IEP (+5.17%), $GME (+5.41%), $MLGO (-2.07%), and $VKTX (-8.29%). 🔥

Here are the closing prices: 

EARNINGS
FedEx Flags Improving Revenue Picture

The transportation giant is hitting three-year highs on news that revenues may finally be picking up again (or at least enough to beat expectations). 🙂

FedEx, UPS, and others in the space have been battling falling volumes for the better part of two years and have recently been unable to raise prices enough to offset the weak demand. As a result, they’ve been focused primarily on cost-cutting to preserve earnings until things pick back up.

And so far it seems to be working, with adjusted earnings per share of $5.41 beating the $5.35 expected. Meanwhile, revenues rose about 1% YoY to $22.10 billion, stemming previous declines. 🔺

Looking ahead, management expects low- to mid-single-digit revenue growth, driven primarily by e-commerce and low-inventory levels.

Meanwhile, it’ll continue executing its DRIVE initiative, consolidating its delivery companies, Express, Ground, and Services, into one unified FedEx brand. Its Freight segment will remain separate, but it expects the combined delivery business to handle all packages as of June 2024. 📦

To help keep investors on board with the turnaround story, the company raised its quarterly dividend by 10% earlier this month. It’ll also need to figure out how to compensate for losing its U.S. Postal Service contract to UPS earlier this year.

Still, shares are popping nearly 15% on the news, and sentiment has pushed into bullish territory. Time will tell if these revenue improvements can continue, but for now, things are looking like the company can deliver. 👍

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