We're Cutting Our Exposure to This Holding on Strength
Here’s our plan for the balance of the four-rated position as we lock in more gains.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
MA | Sell | 90 | 547.45 | 85 | 1.0 |
After you receive this Alert, we will sell 90 shares of Four-rated Mastercard MA at or near $547.45. Following the trade, MA shares will account forroughly 1.0% of the portfolio's assets.
After rebounding 5% off their recent March low, Mastercard shares are battling their 50-day moving average near $548.50. With yet another round of data that points to consumers tightening their belts, we are opting to scale back the TheStreet Pro Portfolio’s exposure to the shares. Ahead of the February Personal Income & Spending as well as PCE Price Index data on Friday and growing indication President Trump’s tariffs may not be as punishing as previously feared, we are leaving some MA shares in play to capture any additional upside.
Our plan remains to use any such upside to further unwind the position, and lock in the large double-digit gain on the portfolio’s books. Should we see MA retreat from the 50-day moving average, because of growing concerns about the consumer we would look to jettison the remaining shares.
Today’s trade locks in a gain of roughly 53% on this slug of MA shares.
Intuit Credit Karma Survey Finds Discretionary Spending Falling
In recent days, we’ve seen more indications consumer spending is softening, but comparing new data from Intuit Credit Karma, Moody’s and Morning Consult show where spending is really under pressure.
According to a fresh Intuit Credit Karma survey data, 72% of middle-income households, which earn $50,000-$99,000, have been cutting back on nonessential spending. Households earning less than $50,000 annually, the group hit hardest by inflation over the last four years, said they are also cutting back on nonessential purchases (62%), looking for cheaper alternatives like store brands and secondhand products (59%) and delaying major purchases (36%).
Households making more than $100,000 (26%) were more likely than low-income households (13%) and middle-income households (15%) to have made purchases ahead of tariffs taking effect.
Meanwhile, data from Morning Consult and Moody’s show far greater spending resiliency for folks earning more than $250,000 per year with that cohort accounting for most of the spending this year.
Sizing up those findings, indicates Mastercard shares are likely more vulnerable to slowing consumer spending, while American Express AXP, which derives a meaningful piece of its pre-tax profit from membership fees, is far more insulated given its customer base. In the coming months, Amex is expected to refresh multiple card products and that means delivering more benefits to its members as it adjusts the corresponding membership fee. We suspect management will be mindful given the current environment not to gouge members and risk upping its churn rate.
(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 chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long MA and AXP.
