Aurelia Butler

FedEx said it would close offices, freeze hiring and park aircraft in response to a decline in package shipping volumes that prompted the company to issue a profit warning and scrap its guidance for fiscal 2023.The update, from a company considered a bellwether of global economic growth because of the wide range of items it ships, was issued after Wall Street’s closing bell on Thursday and knocked shares down more than 15 per cent to their lowest level in more than two years.FedEx released preliminary results for the three months to August 31 that were weaker than analysts expected, blaming “global volume softness” that “accelerated” in the final weeks of the quarter.The company, which was officially due to report on September 22, said it expected business conditions to further weaken in the second quarter, prompting it to cut its forecast for capital expenditure and withdraw guidance for the remainder of its fiscal year.“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the US,” said chief executive Raj Subramaniam, who took the reins at the company in June from founder Fred Smith. “We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first-quarter results are below our expectations.”Subramaniam described the performance as “disappointing” and said the company was “aggressively accelerating” efforts to cut costs and enhance productivity.In an effort to mitigate the effects of reduced demand, FedEx announced it would close more than 90 FedEx Office locations, defer staff hiring, cancel certain projects, reduce flights and temporarily park aircraft, among other actions. In its preliminary results, FedEx reported a profit of $3.33 a share in its first quarter, down 19 per cent from a year ago and well below the $5.14 a share Wall Street expected. Revenue increased 5 per cent from a year ago to $23.2bn but was slightly below analysts’ forecast for $23.6bn.The company said it expects business conditions to further weaken in the current quarter and forecast revenue to be in the range of $23.5bn to $24bn, with earnings of $2.65 “or greater” a share. Wall Street expected revenue of $24.9bn and earnings of $5.39 a share.FedEx also cut its forecast for capital spending in the fiscal year to $6.3bn from $6.8bn.Shares were down 15.2 per cent in after-hours trading to their lowest level since early August 2020. More

(Reuters) – U.S. buy-now-pay-later (BNPL) customers’ outstanding debt is estimated to hit $15 billion by 2025, a report by management consultancy firm cg42 said on Thursday. The industry saw a huge boost during the COVID-19 pandemic as homebound consumers opted for online shopping, a trend that urged digital payments giants such as Block Inc and PayPal Holdings Inc (NASDAQ:PYPL) to expand further in the sector.However, the current uncertainty in macroeconomic outlook due to the geopolitical turmoil, rapidly rising interest rates and red-hot inflation has hit the once high-flying sector. Valuations of some of the biggest players in the space tumbled this year after a stellar 2021. Shares in Affirm Holdings Inc have plunged over 70%, while Swedish rival Klarna cut its valuation by over 80% to $6.7 billion from $46 billion last year. But U.S. BNPL customer base is expected to grow by 27% between 2022 and 2025, the study showed. About 84% of more than 2,000 people surveyed said the BNPL model allows them to purchase items they otherwise would not be able to, while 39% said they “regularly” pay late fees due to missed payments. “Users also put their BNPL payments on their credit cards, setting up a very scary double whammy effect in which individuals who are laid off will get hit with double the fees and have no path to paying off their debts,” said Hugh Tallents, senior partner and financial services practice lead at cg42.”BNPL operates outside of the traditional credit system right now. People don’t think of it as debt and they can’t track how much they hold in aggregate.” The BNPL industry remains popular among younger consumers, many of who are struggling to save and meet their financial goals, and largely unregulated in the United States, one of its biggest markets. More

BUENOS AIRES (Reuters) – Argentina’s central bank hiked the country’s benchmark interest rate 550 basis points to 75% on Thursday, a day after inflation overshot forecasts to near 80% on an annual basis.The hike followed a 950 basis points-raise in August of the 28-day Leliq benchmark rate, as the government tries to bring down spiraling prices that are hurting Argentines’ savings and salaries and denting the popularity of the Peronist government.A positive real interest rate is also one of the points agreed between Argentina and the International Monetary Fund (IMF) in a new $44 billion loan deal that the country needs to meet its upcoming debt repayment obligations.Reuters reported at the start of September, citing a source with knowledge of the discussions, that Argentina’s central bank was planning to hike the rate to 75% this month due to the high levels of inflation. More

Good morning. Russian president Vladimir Putin has acknowledged Chinese “concerns” about the war in Ukraine in the first public admission of differences between Beijing and Moscow over the conflict. Putin’s comments came in a meeting with China’s president Xi Jinping in Uzbekistan on Thursday, the first time the two had met in person since the Kremlin launched its all-out invasion of Ukraine in February. “We highly value the balanced position of our Chinese friends when it comes to the Ukraine crisis,” Putin told Xi, according to a Kremlin transcript. “We understand your questions and concerns about this. During today’s meeting, we will of course explain our position, though we have also spoken about this before.” Putin arrived in Uzbekistan as Russian forces in the north-east of Ukraine have been forced into retreat by a Kyiv counter-offensive that has recaptured important territory, boosted Ukrainian morale and raised questions about whether Moscow can sustain its offensive.Russia has frequently rebuffed claims that it is becoming globally isolated by pointing to increasingly close economic and political ties with China and other non-western nations.Related read: The US and EU are stepping up pressure on Turkey to crack down on Russian sanctions evasion amid concerns that the country’s banking sector is a potential backdoor for illicit finance.Where do you think Russia-China relations will go from here? Tell me what you think at [email protected]. Thanks for reading FirstFT Asia and have a great weekend. — EmilyFive more stories in the news1. White House sounds alert on inbound Chinese investment President Joe Biden has issued an executive order aimed at boosting scrutiny of deals involving foreign companies in high-tech industries such as semiconductors, as part of a continuing effort to address security threats from China. 2. South Korea considers plan to stabilise the won South Korea said it was reviewing “contingency plans” to tackle foreign exchange volatility, with the Korean won hovering at a 13-year low against the US dollar as currencies across Asia come under pressure from an increasingly hawkish Federal Reserve.3. China’s state banks cut deposit rates for first time since 2015 State lenders including Industrial and Commercial Bank of China, Bank of China, Bank of Communications and Agricultural Bank of China cut interest rates for three-year deposits by 0.15 percentage points yesterday, as Beijing seeks to boost flagging growth in the world’s second-largest economy without risking runaway depreciation of the renminbi.4. Key moment for crypto market Ethereum, the world’s second-biggest blockchain, has completed a long-awaited upgrade to its system in a move expected to slash its energy costs and intended to prepare the ground for more use of crypto technology in mainstream finance. Vitalik Buterin, Ethereum co-founder, said the upgrade, known in the industry as “The Merge”, had been completed earlier today.5. US Senate panel approves $6.5bn bill to fund weapons for Taiwan The Taiwan Policy Act was passed by a margin of 17-5 by the US Senate foreign relations committee. The bill, which still requires approval by the full Senate and the House, marks the first time the US would directly finance the provision of weapons to Taiwan.How well did you keep up with the news this week? Take our quiz.The day aheadChina retail sales and industrial production figures When August data is released today, economists expect retail sales to continue their downbeat trend following July’s underwhelming report. (Focus Economics, FT) Top Chinese lawmaker meets South Korean president China’s National People’s Congress Standing Committee Chair Li Zhanshu is expected to meet South Korean president Yoon Suk-yeol today. Malaysia Day Financial markets will be closed today to mark the establishment of the Malaysian federation. Skandal! premiere The Netflix documentary charting the incredible story of how the Financial Times’ Dan McCrum took down Germany’s huge and fraudulent payment processor Wirecard, will be released globally today.

Dan McCrum, right, spent seven years investigating the fraudulent payment processor Wirecard, a tale that is still playing out as executives await trial © Courtesy of Netflix

Join board members and C-suite executives in person or online for the Cyber Resilience Summit on September 21-23 to hear remarks from speakers including Bill Clinton. Register for your pass today. What else we’re reading Xi plan for economic independence Under Xi Jinping — who appears all but certain to secure another term in power next month — China is seeking to become a state-led and self-sufficient techno-superpower that will no longer rely so much on the west. But how realistic is goal in a connected world?Citi opens Málaga hub for junior bankers Málaga is better known for its sunshine and food than banking. But yesterday 27 young recruits started at Citi’s new hub for junior investment bankers. Rivals have dismissed it as a gimmick but the US bank claims it is a way of offering a “better work-life balance” for its new starters. Will it work?Defiance in the rabbit warren of Kyiv’s presidential palace Last week, Gillian Tett took a trip down the darkened corridors of the Ukrainian presidential palace, where despite fighting off a brutal Russian invasion for seven months, President Volodymyr Zelenskyy and his team are intent on delivering the message of business as usual.More on the war: Ukraine’s president was involved in a car accident yesterday after returning to Kyiv from the eastern Kharkiv region. He sustained no serious injuries.How to reboot men for the age of gender equality At the top and the bottom of society, new definitions of masculinity can help all to thrive, writes Simon Kuper. These three recent books trace the outlines of a new masculinism.Scenes from the end of an Elizabethan ageThe state funeral for the Queen on Monday will be a solemn ceremony but in the meantime the public waits to see the body lying in state and pay their respects at Buckingham Palace. Imogen West-Knights joined mourners, lost-looking tour groups and history rubberneckers outside the royal residence.

Hundreds of thousands of people are travelling to London to mourn the Queen © Benjamin McMahon

Travel Cafés packed closely along a picturesque single-line train track in Hanoi have reopened after a long Covid shutdown, feeding hopes that the area will again lure visitors to what was once a tourist hotspot. More