Cramer says investors should remain calm after FedEx’s bad quarter but brace for more economic pain

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

The “Mad Money” host’s warning comes after FedEx reported first-quarter earnings and revenue that fell short of Wall Street expectations, citing a decline in global shipment volumes, while announcing aggressive cost-cutting measures.

Shares of the company tumbled 16% in extended trading.

Cramer outlined three reasons why investors shouldn’t let the company’s bad quarter scare them too much:

1. This was CEO Raj Subramaniam’s first quarter leading the company. While the issues appear to be macroeconomic, there could be some issues with the company’s execution that are not apparent yet, which means the economy might not be in as dire a situation as the company suggested.
2. The issues Subramaniam described are all manmade. Both the Covid lockdowns in China and Russia’s invasion of Ukraine are issues that global leaders are causing, which means that there’s potential for resolution.
3. It’s entirely possible for wage inflation to come down. “Maybe the bears who insist that the Fed raise and raise and raise and raise [interest rates] don’t know what they’re talking about,” Cramer said.

However, this doesn’t mean that investors shouldn’t brace themselves for more pain ahead, he said. “Most of us didn’t know until tonight we had this many problems and that they are all getting much worse, not better.”