That is the whole dynamic in one simple sentence.<\/p>\n
2019 SP 500 earnings expectations have been expecting slower growth for some time<\/a>\u00a0but now that expected earnings growth for next year has been reduced to 8%.<\/p>\n Transports look ugly, made more so by the action in XPO, the trucking firm. FedEx and UPS are through their 200-week moving averages, which is typically a good place to buy a beaten-down sector. (Just started building a position in FDX this week.)<\/p>\n During the 2015 – 2016 correction there were more than a few similarities to today’s correction:<\/p>\n 1.) China weakness and a devalued yuan and strong dollar were seem through the summer, fall of 2015.<\/p>\n 2.) Crude oil was still in the process of correction from its 2014 peak near $90, ultimately ending up bottoming at $28 in Feb 16.<\/p>\n 3.) Banks and Transports were ugly then, as they are now. Transports saw no benefit from the drop in crude then or now.<\/p>\n 4.) The big difference between the two corrections is that Tech stayed relatively strong and didn’t correct until January ’16 and then came apart in the 5-week period just prior to the Feb ’16 market bottom.<\/p>\n FedEx reports next week, and here is what worries me a little (or a lot). Hopefully Seeking Alpha doesn’t mind but I wrote this FedEx earnings preview<\/a> last weekend and just since publication of this article on Monday, December 10th, here is how FDX’s EPS estimates have changed:<\/p>\n It doesn’t look like much but the numbers are coming down in front of the release, for a company that is a pretty effective “tell” for the US economy. Still as the article details, the stock is probably undervalued coming into earnings and unless estimates fall off a cliff, the price discounts a lot of issues with the sector.<\/p>\n\n