Markets were heading slightly higher on Wednesday after U.S. consumer price index posted it’s biggest drop in nearly six years last month. The Labor Department reported that the Consumer Price Index, CPI, dropped 0.3% in November. This marked the largest drop since December 2008. Economists had been projecting the CPI to come in with a drop of 0.1%. The large decline was partially attributed to dropping in oil prices, which hit their lowest price in five and a half years this week. There was also a decline in the price of new cars, household furnishings and apparel. There were some increase in airline tickets, medical care and alcohol. The core CPI, which subtracts both food and energy cost from the equation, still dropped 0.1%. This news comes out ahead of the Federal Reserve’s two day meeting. They are expected to release an official statement later today. Jay Morelock, an economist at FTN Financial, said, “Beside a brief mention about keeping an eye on oil prices, do not expect this inflation report to materially impact today’s Fed decision.”
FedEx Corporation’s (FDX) shares were sinking down over 4.5% after the company announced results that missed expectations. The shipping giant said that net income came in at $616 million, or $2.14 per share for the second-quarter. This is up from this time last year when the company posted $500 million, or $1.57 per share. Analysts were expecting FedEx to come in with $2.22 per share. Revenue came in at $11.9 billion, which was also below the expected $11.99 billion. The company said that volumes were up 7% for the quarter, however there was a drop of 2% in revenue per package. They have not dropped their expectations for the year. FedEx still expects to earn $8.50 to $9.00 per share. Analysts are projecting $9.14.
Shares of General Mills, Inc. (GIS) were trading higher after the company’s quarterly results beat analysts’ expectations. The company partially attributed the positive numbers to a cost cutting program they have embarked on this year. They are aiming at saving $400 million in 2015. The steps include a cutting of 700 to 800 jobs, increasing efficiency at their supply chains and lessening their advertising budget. Net income came in at $346.1 million, or 56 cents per share. Earnings came in at 80 cents per share. Analysts were projecting 77 cents per share. Revenue came in at $4.71 billion; analysts were expecting $4.79 billion. Ken Powell, CEO of the company, said, “The operating environment remains challenging but, as we move into the second half of our fiscal year, we expect to renew sales and profit growth.”
That’s all for today,
Warren Gates, Normandy Research