Have profits peaked at American businesses?

Fedex nearly failed to get its wheels off the ground. Months after it first began delivering packages overnight in 1973, the first oil shock buffeted the global economy and the young logistics firm looked destined to fail. As the Organisation of the Petroleum Exporting Countries once again sent shock waves through the already wobbly world economy with an announcement on October 5th of a sharp cut in output, fuel prices are just one of the firm’s worries. Weak package volumes and persistently high costs caused FedEx to withdraw next year’s profit guidance in September, knocking more than a fifth, or $11bn, off its market value.

FedEx has long been regarded as a bellwether for the broader economy. In a sign that this reputation is well-earned, corporate titans everywhere are now warning of profit hits as Wall Street gears up for America’s earnings season, which begins this week. No industry has been spared. On October 6th Shell, a British oil supermajor, said it expected…

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This article was written by and originally published on www.economist.com