Why American Express Is Trading Higher Today

Core Viewpoint - American Express shares rebounded approximately 4% as the broader market attempted to recover from previous losses, despite no specific news about the company on that day [1] Economic Context - American Express operates in the lending and credit card sector, making it a cyclical stock sensitive to economic trends [2] - Recent economic data suggested a potential rapid deterioration of the economy, raising concerns about a soft-landing scenario [2] - The U.S. economy added fewer jobs than expected in August, maintaining steady unemployment but raising fears of a weaker labor market, which could impact American Express's credit underwriting [3] Market Sentiment - The market may have been oversold last week, leading to a 5.6% decline in American Express's stock, making it more likely to participate in the recovery [3] - Citigroup's CFO expressed a positive outlook on a soft-landing scenario at an industry conference, which is beneficial for the credit card sector [4] Investment Perspective - American Express has a strong historical performance and is a significant holding in Berkshire Hathaway's portfolio, with Warren Buffett describing the brand as "special" [5] - The company primarily serves higher-income customers, who are generally more resilient during economic downturns, and has a diverse revenue stream from its payments business [5] - The stock currently trades at 19 times forward earnings, indicating potential for cheaper entry points in the future, but remains a strong long-term buy-and-hold option [6]