Economists Have Nothing on These Two

Find economic data confusing? Make it easy on yourself by paying attention to what the multi-nationals are saying.

| More on:
The Motley Fool

Economic data provides much fodder for the media machine.  We are consistently inundated with a wide range of pundits bantering and arguing about what the latest data release means.  Is this necessary?  For media outlets looking to fill the void that is actual news, absolutely.  For investors?  Not at all.

As an individual investor, there is very little need to expend one ounce of energy compiling your own economic outlook.  You see, every three months or so, companies that have their pulse on the global economy do it for you!  These multi-national companies are not reliant on flashy headlines to sell newspapers and provide concise and reliable insights into the global economic landscape.

Pay attention to these two bellwethers

Caterpillar (NYSE:CAT) and Fed Ex (NYSE:FDX) recently summarized their economic outlook in their quarterly release.  Unfortunately, neither provided an overly rosy forecast.  Provided below are the statements made by each:


“The range of our 2013 outlook reflects the level of uncertainty we see in the world today.  We’re encouraged by recent improvements in economic indicators, but remain cautious.  While we expect some improvement in the U.S. economy, growth is expected to be relatively weak.  We believe China’s economy will continue to improve, but not to the growth rates of 2010 and 2011.  We also remain concerned about Europe and expect economies in that region will continue to struggle in 2013.” – Chairman and Chief Executive Officer Doug Oberhelman   

Fed Ex

“Our lower-than-expected results for the quarter and reduced full-year earnings outlook were driven by third quarter international revenues declining approximately $100 million versus our guidance primarily due to accelerating customer preference for lower-yielding international services, lower rate per pound and weight per shipment,” – Exec VP and CFO Alan B. Graf Jr.

“We expect these international revenue trends to continue.  We have other actions under way beyond those already included in our profit improvement program.  Some of these additional actions may involve temporarily or permanently grounding aircraft, which could result in asset impairment or other charges in future periods.” – Exec VP and CFO Alan B. Graf Jr.

Would’ve nailed it

When the global economy went into its 2008/09 funk, the S&P 500 peaked in October 2007.  Fed Ex and Caterpillar stocks served as leading indicators as they peaked in February and July of that year respectively.

In addition, Fed Ex cut guidance for 2008 in September 2007, just a month before the market peaked.  Investors that were astute enough to heed this warning and defensively position their portfolio saved themselves a pile of anguish.  Though less severe than the revision made back in Sept. 2007, Fed Ex did lower its guidance for the coming quarter in the recent release.

The Foolish Bottom Line

Investors face unprecedented volumes of information on a daily basis.  Filtering this information and being selective in what you believe is critical.  If you are trying to form an economic opinion but are bogged down in minutiae, turn to the multi-nationals for practical, easy to use insights.

One investment strategy that is proven to pad your investment account regardless of the economic climate is dividend investing.  We have created a special free report that outlines 13 high yielding stocks that you can buy today.  To receive this report, absolutely free of charge, simply click here.

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time.  David Gardner owns shares of FedEx.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing


3 Stocks to Buy and Hold for Total Returns

For investors seeking excellent total returns over the long haul, here are three Canadian stocks to buy before the market…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.

3 Defensive Stocks That Cautious Investors Can Feel Confident Buying

Consider buying Fortis (TSX:FTS) and other defensive dividend stocks in 2024.

Read more »

healthcare pharma
Stocks for Beginners

2 Healthcare Stocks You Can Buy and Hold for the Next Decade

These two healthcare stocks are showing strong signs of growth for the next decade and are already improving by leaps…

Read more »

analyze data
Tech Stocks

If You’d Invested $500 in Nuvei Stock in 2020, This Is How Much You Would Have Today

Nuvei (TSX:NVEI) stock has seen its shares climb to triple digits and fall below IPO prices. So, what now for…

Read more »

Is Nvidia stock a buy?
Tech Stocks

Is Nvidia Stock a Buy After Its Huge Post-Earnings Surge?

Nvidia (Nasdaq:NVDA) stock jumped after the company’s phenomenal fourth-quarter earnings report, and everyone’s talking about a booming future for AI.…

Read more »

Man data analyze
Dividend Stocks

1 Recession-Resistant Stock to Buy and Hold Forever

Brookfield Renewable is a recession-resistant high dividend stock trading at a cheap valuation in 2024.

Read more »

Bank Stocks

Is TD Bank Stock a Buy Now After Solid Earnings?

TD deserves to be on your radar today.

Read more »

potted green plant grows up in arrow shape
Dividend Stocks

3 Hypergrowth Stocks to Buy in 2024 and Beyond

There are stocks growing, and there are stocks hitting all-time highs. These are three that I would therefore consider on…

Read more »