A bellwether is a leading indicator of an economic trend. To investors, a bellwether is usually a company that is worth watching closely because its earnings logically suggest a larger economic trend. A company's stock may also be a bellwether if it is viewed as pointing towards an upward or downward trend in a sector.
FedEx is an example of a bellwether company. If FedEx announces a substantial increase in deliveries in a quarter, it follows that consumer spending is increasing.
More goods are being manufactured to fill more wholesale orders, more wholesale orders are being sent to retailers, and retailers are buying more to meet consumer demand.
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