The stock market increased on Tuesday as investors shook off a notable dip in US consumer sentiment. The consumer confidence reading dropped to 98.7 in September – its biggest one-month decline in more than three years. The latest figure was below the 105.6 recorded in August and the 104 estimate.
Overall, S&P 500 rose 0.3% to 5,733, while NASDAQ increased 0.6% to 18,075.
Tweet of the Day
I need to add to our $META position. https://t.co/fnKdR7jHKs
— David Sharek (@GrowthStockGuy) September 18, 2024
Chart of the Day
Here is the one-year chart of S&P Global (SPGI) as of August 19, 2024, when the stock was at $496.
S&P Global has been crushing profit estimates for three straight quarters, as Ratings division drove the success. Last quarter, the company delivered 29% profit growth on 14% revenue growth, both of which were at least twice the expected figures. The Ratings Division led the way, accounting for 33% of revenue growth and 32% of total revenue. Transaction revenue for this division soared by 63% due to increased bank loan and bond issuance.
S&P Global rated more than $1 trillion in new issues last quarter, a massive 54% jump from the previous year. This was supported by low credit spreads and strong economic conditions, especially in North America. The company also saw a lot of refinancing activity as many investment-grade issuers accelerated their 2024 refinancing plans. However, the second half of the year is expected to be weaker in terms of billed issuance and transaction revenue. With no clear timeline for potential rate cuts in the US, a slight decline in issuance for the fourth quarter is predicted.
SPGI is part of our Conservative Growth Portfolio. With a P/E of 34, David Sharek thinks that the stock is around where it should be.
