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Good morning, logistics leaders. This is your Stock Market Rundown for March 29th, 2024. Thank you so much for reading. Let’s get started:

TODAY’S TOP STORY: PACKAGE PIONEER

When future billionaire Fred Smith submitted a term paper for his economics class at Yale in 1965, enthusing on the potential for automation in the package delivery industry, his professor probably didn’t find it scintillating reading.

But Smith really believed in his novel idea that building a hub-and-spoke network could be massively more efficient than a point-to-point delivery system.

A few years later, Smith turned his term paper into reality. He bought a fleet of aircraft and started shipping packages to US cities from a centrally-located hub in Memphis, Tennessee. He dubbed his business Federal Express—later renamed FedEx.

The startup struggled, and at one point had only $5,000 in its bank account. Ever a risk-taker, Smith withdrew the money, flew to Las Vegas, and used it to win $27,000 playing blackjack, which served to tide them over until they could raise capital.

The company survived, and by 1978, was listed on the New York Stock Exchange. Today, FedEx has a market capitalization of $71 billion, and delivers packages in planes, trucks, vans, and even drones.

FedEx is viewed as a bellwether of the logistics industry—the “canary in the coal mine” for global trade. These days, the canary isn’t just surviving, it’s singing operas.

In its most recent quarterly report, FedEx beat estimates and said it’ll use its ample spare cash to buy back $5 billion of its own shares, which sent the stock up double digits.

And how did Fred Smith’s professor mark his term paper that birthed the idea? Smith told an interviewer: "I don't know what grade, probably made my usual C." Given that Smith is now worth $6.5 billion, it appears the global economy awarded him an A+.

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SO WHAT ELSE IS GOING ON?
  • The office market is suffering from remote work, with one-quarter of existing supply sitting empty. Face it, nobody wants to return to in-person work five days a week except that one IT guy who hates his family.

  • The former CEO of Papa John’s has just been appointed chief exec of Shake Shack. Does this guy ever eat a vegetable?

  • Meta, owner of Facebook, will soon be getting advanced AI chips that are 30 times faster. Maybe they can build chatbots to argue with your Uncle Carl when he posts MAGA memes.

  • We just got a little bit closer to hiring C3PO as your coworker: AI chipmaker Nvidia announced a platform for building humanoid robots.

  • According to industry data, forty new hedge funds are launching this year. Want to outperform them? Invest in the S&P 500—it trounced the average hedge fund from 2011 to 2020.

That’s it for the week, amigos. Have yourselves a fabulous weekend, and let’s reconvene first thing Monday morning. Yours in capitalism, The Axe

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