LBLV FedEx's profit nearly tripled on pandemic demand 2021/19/03

LBLV provides an overview of economic news.


The main economic news for Friday, March 19:

0:00 FedEx's profit nearly tripled on pandemic demand
1:05 BOJ keeps policy, expands yield fluctuations range
1:53 Global stocks drop as high yields undermine tech
2:55 Oil prices firm up slightly after a week of losses

1. FedEx's profit nearly tripled on pandemic demand
FedEx Corp, the largest U.S. delivery company, said Thursday that quarterly profits jumped more than expected amid higher prices and a surge in shipments caused by a pandemic of e-commerce during the holiday season. The Memphis-based company's third-quarter adjusted net income rose $939 million, or $3.47 per share, from $371 million a year earlier, beating analysts' expectations of $3.23 per share. The company expects demand for e-commerce and international shipping to "remain very strong for the foreseeable future." Shares of FedEx, considered a barometer of the U.S. economy, have more than doubled in value from a year ago, when a pandemic forced the company to close business and issue take-home orders. On Thursday, they rose more than 4% to $274 in extended trading after the reports were released.

2. BOJ keeps policy, expands yield fluctuations range
The Bank of Japan extended the range of allowed deviations of long-term interest rates from the 0% target at the end of its meeting on Friday and promised to buy risky assets only if necessary. The regulator said it will allow long-term interest rates to swing 0.25% either way from the target. Previously, a variation of 0.2% was allowed. The BOJ added that it would buy exchange-traded funds (ETFs) and real estate investment trusts (REITs) as needed, while keeping the purchase limits at 12 trillion yen and 180 billion yen, respectively. As expected, the central bank left its monetary policy unchanged, keeping the short-term interest rate at minus 0.1% and the benchmark 10-year government bond yield at about zero.

3. Global stocks drop as high yields undermine tech
Global stock markets fell on Friday after a jump in bond yields caused a sharp selloff of rich tech stocks on Wall Street, while investors were also worried about rising Covid-19 cases across the European region. Markets were also worried about the Bank of Japan's decision to slightly expand its target range for 10-year yields and adjust asset purchases. It knocked the Nikkei down 1.6%, while the broadest index of Asia-Pacific stocks outside Japan, the MSCI, fell 1.5%. NASDAQ futures remained flat after falling 3% overnight as Fed became concerned about the yields’ impact on tech stocks. European futures followed with EURO STOXX 50 down 0.8% and FTSE futures down 0.6%. U.S. 10-year bond yields rose to their highest level since early 2020 at 1.75%, a day after the Fed raised its growth and inflation forecasts but said it would maintain very flexible monetary policy through 2023.

4. Oil prices firm up slightly after a week of losses
Oil prices were stable on Friday, but ended the week with a sharp drop, as a new wave of coronavirus infections in the world in general and in Europe in particular led to new restrictions and weakened hopes for demand recovery in the near future. Brent crude futures fell 0.5% to $62.97 per barrel and WTI fell 0.5% to $59.69 per barrel. On Thursday, oil quotations fell 7% ending the fifth consecutive session in negative territory, and wiping out a four-week gain in one session amid fears that global demand would not meet high expectations. Meanwhile, European countries have reintroduced lockdowns due to a surge in COVID-19 cases, raising concerns about growth prospects and making the market increasingly tense.