Watch FedEx Stock Based on Election Outcomes

By Patricia Miller

Published:

In this article

Election results may impact FedEx's (FDX) stock through tariffs, fuel price changes, and government spending.

FedEx.
FDX

What You Need To Know

FedEx's (NYSE: FDX) stock performance may hinge significantly on the outcomes of the upcoming election. If Donald Trump wins, his proposed tariffs on Chinese imports could negatively impact FedEx due to its reliance on global trade and exposure to China, leading to diminished shipping demand and pressure on revenue growth for its international services. Conversely, a victory for Kamala Harris could bolster FedEx’s domestic shipping by promoting incentives for U.S. manufacturing.

Additionally, Trump's focus on increasing domestic energy production may influence fuel pricing, potentially compelling FedEx to adjust its pricing strategies, given its dependence on fuel costs. This may not necessarily be negative. While Trump's policies may exert downward pressure on fuel prices, the actual impact on FedEx's costs would depend on broader market dynamics.

Meanwhile, Elon Musk's suggestion to cut $2 trillion from the federal budget poses indirect challenges for FedEx under a Trump administration. Significant budget reductions could restrict government contracts and infrastructure investments, leading to reduced revenue opportunities and a broader economic slowdown that might decrease shipping volumes. While tax cuts under a Trump administration could enhance FedEx's profitability, the accompanying economic and regulatory uncertainties might present challenges.

Why This Is Important for Retail Investors

  1. Tariff Impact on FedEx's Revenue: If Trump reintroduces tariffs on Chinese imports, FedEx's revenue could be negatively impacted due to reduced demand for international shipping. Retail investors need to consider how these policy shifts may influence the company’s earnings and stock performance.

  2. Fuel Price Volatility: A Trump-led focus on domestic energy could cause fluctuations in fuel prices. Since FedEx heavily relies on fuel, this could affect its operating costs.

  3. Budget Cuts Impacting Government Contracts: Musk's proposed $2 trillion budget cut could lead to reduced federal spending, including on defense and infrastructure, which might decrease FedEx's government-related logistics business. Investors should assess the risk of reduced revenue from this sector.

  4. Broader Economic Slowdown: Large-scale federal spending cuts could slow down the economy, leading to lower consumer and business spending. This could decrease shipping volumes.

  5. Potential Corporate Tax Benefits: If corporate taxes are reduced under Trump and Musk’s fiscal reforms, FedEx could see an increase in profitability, offering a short-term positive for investors.

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IMPORTANT NOTICE AND DISCLAIMER

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Patricia Miller does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Patricia Miller has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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