Adding to This Holding as Consumer Spending Momentum Jumps
Consumer spending accelerated in July, but we’re still waiting for this next known catalyst.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
AXP | Buy | 45 | $302.75 | 640 | 3.6% |
After you receive this alert, we will buy 45 shares of American Express AXP at or near $302.75. Following the trade, the Portfolio will own 640 AXP shares, roughly 3.6% of the Portfolio.
We are picking up some additional shares of American Express, given indications that consumer spending performed better than expected in July. Ahead of Friday’s Retail Sales Report, Visa’s V U.S. Spending Momentum Index (SMI) jumped 4.4 points month-over-month to 100.1 (seasonally adjusted) in July, marking the first time the index has reached expansion territory since March 2022.
Per Visa, spending momentum increased across all categories other than restaurant, with both the discretionary and non-discretionary entering expansion territory as well. That follows comments from United Airlines UAL and other airlines for booked revenue improvements as well as from Expedia EXPE, which sees its gross bookings accelerating in the current quarter compared to the June quarter.
As we make this addition, let’s remember the catalyst we are waiting for with AXP shares is Amex’s pending update for the Platinum card. The company’s membership mix shift toward premium cards across its expanding membership has been the fuel that drives 70% of the company’s pre-tax income.
This move not only expands our position in AXP shares ahead of the consumer spending focused year-end holidays, it also adds a wee bit more to the Portfolio’s dividend stream, given Amex’s $0.82 per share quarterly dividend.
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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the “+” next to the position’s ticker to sort Purchase and Date data.)
At the time of publication, TheStreet Pro Portfolio was long AXP.
