The stock market jumped on Friday after the April payroll report showed stronger-than-expected job growth. This exhibits how resilient the labor market is amidst the high inflation and high interest rates.
Overall, S&P 500 grew 1.9% to 4,136, while NASDAQ rose 2.3% to 12,235.
Tweet of the Day
The Fed will not raise rates again.
— Jeffrey Gundlach (@TruthGundlach) May 5, 2023
Chart of the Day
Here is the one-year chart of American Express (AXP) as of April 26, 2023, when the stock was at $156.
American Express is a globally integrated payments company in providing credit and charge cards to individuals and businesses with high credit scores. The company is both a a card issuer (like Chase and Citi) and a card network (like MasterCard and Visa).
The company grew revenue a whopping 22% as Card Member spending rose 16%. However, it missed profit estimates and delivered -12% profit growth as it increased provisions for future credit losses.
American Express has been getting new young customers, which is a big positive. Millennial and Gen Z customers accounted for greater than 60% of new customer accounts last qtr, as new cards increased 3.4 million overall. They contributed the strongest growth in the consumer billed business.
AXP was added to the Conservative Portfolio today. Strong travel trends and momentum from younger customers are positives. There is risk of a recession crimping profits. But AXP has more affluent clients that should be able to pay their bills.