Economist David Rosenberg Says Recession Hiding In UPS Earnings: 'Tough To Buy Into That Q4 Government-Massaged GDP Data'
Portfolio Pulse from Shanthi Rexaline
Economist David Rosenberg cites UPS's Q4 earnings as evidence of a looming recession, challenging the credibility of recent robust GDP data. UPS reported a 7.8% revenue decline and a 31.8% drop in adjusted EPS. CEO Carol Tomé announced a workforce reduction of 12,000 to save costs and explore strategic alternatives for Coyote. The iShares Transportation Average ETF (IYT) fell 1.57% after the Fed's rate decision.
February 01, 2024 | 7:18 am
News sentiment analysis
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NEGATIVE IMPACT
The iShares Transportation Average ETF (IYT) dropped 1.57% following the Fed's decision to maintain interest rates, reflecting investor concerns over the transportation sector and broader economy.
The decline in IYT's value may be attributed to the negative sentiment surrounding the transportation sector, as indicated by UPS's earnings and the Fed's rate decision, suggesting a cautious short-term outlook.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
UPS reported a 7.8% decline in Q4 revenue and a 31.8% decrease in adjusted EPS, indicating potential economic slowdown. The company plans to cut 12,000 jobs and explore strategic alternatives for Coyote.
The reported decline in revenue and earnings, along with job cuts and strategic reassessment, suggest a negative outlook for UPS in the short term, potentially reflecting broader economic challenges.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100