Stay Calm After Failed FedEx Quarter, Prepare For Economic Trouble

CNBC’s Jim Cramer advised investors not to panic after FedEx’s worse-than-expected first quarter.

The Mad Money host’s warning came after FedEx reported first-quarter earnings and earnings that fell short of Wall Street’s expectations, citing declining global shipments and announcing aggressive cost-cutting measures.

The company’s shares fell 16% in extended trading.

Cramer outlined three reasons why investors shouldn’t be too intimidated by a company’s bad quarter:

1. This was the first quarter that CEO Raj Subramaniam was in charge of the company. While the problems appear to be macroeconomic, there may be some performance issues with the company that are not yet apparent, meaning the economy may not be in as dire a spot as the company had imagined.
2. All the problems described by Subramaniam are man-made. Both the Covid lockdown in China and Russia’s invasion of Ukraine are problems that world leaders are causing, meaning there is potential for a solution.
3. It is possible that wage inflation will fall. “Maybe the bears who are pushing for the Fed to raise, raise, raise, raise [interest rates] I don’t know what they’re talking about,” Kramer said.

However, that doesn’t mean investors shouldn’t brace for more trouble, he said. “Most of us didn’t know until tonight that we have so many problems and that they’re all getting so much worse, not better.”