Duopolies

Coke and Pepsi, McDonald’s and Burger King, Boeing and Airbus—this is an economy full of duopolies. One of those pairs, UPS and FedEx, is proving to be a fascinating Rorschach test about the state of the economy.

UPS and FedEx both make excellent bellwethers for the stock market as well as the economy at large. They have their fingers on the pulse of trade and services. When the economy is humming, these firms process ever-larger quantities of parcels, envelopes, and boxes. FedEx and UPS are also heavily exposed to price changes in key inputs—particularly transportation and fuel. So, their results can tell us quite a lot about how rising costs affect corporate profits, and thus stock prices.

Same but different:

FedEx gets most of its revenues from express delivery and has a small retail copying unit (Kinko’s); UPS has a larger presence in the global freight market. (via)

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