Why Nu Holdings shares rose on Thursday


What happened

The share price of Nu Holdings (NAKED 0.92%) was rising Thursday morning, up to 7% around 10:19 a.m. ET. By 12:20 p.m. ET, it had risen only about 0.7% to $5.46 per share.

Meanwhile, all major indexes were down, with the Dow Jones Industrial Average down 0.5%, the S&P500 down 1%, and the Nasdaq 1.3% lower at 12:20 p.m. ET.

What drove the Brazil-based digital bank higher on Thursday?

So what

Nu Holdings, the holding company of Nubank, is a digital bank serving Brazil, Mexico and Colombia. It rose along with other bank stocks during the morning session, as JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachsand SoFito name a few, were all trading higher.

While there doesn’t appear to have been a specific catalyst, there has been some decent economic news that investors hope indicates things aren’t as bad as many believe. Namely, unemployment insurance claims fell for the fifth straight week, retail sales rose 0.3% in August, beating expectations, and the benchmark 10-year Treasury yield rose to 3. .45%, which is seen as a sign of investor confidence.

Additionally, there was a report from Bloomberg on Thursday that major US banks, including Citigroup and Goldman Sachs, invest in Latin American start-ups to help them grow. The article reported that Nu Holdings in April secured a $650 million line of credit from several major US banks to expand into Mexico and Colombia.

Now what

The banks may also have been encouraged by comments from Morgan Stanley analyst Andrew Slimmon on Thursday that he thinks inflation peaked in July and the S&P 500 will end the year with positive momentum and be close to where it started in 2022.

Nu Holdings, which is a stock that Berkshire Hathaway invests, continued to grow, reaching record sales in the second quarter and becoming profitable in its main market, Brazil. The company made new hires and executive appointments over the summer to expand its business in Latin America, including appointing co-founder Cristina Helena Zingaretti Junqueira as chief growth officer. It’s a huge addressable market for Nu Holdings, and it’s a stock to watch as we emerge from this economic and market malaise.

Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Dave Kovaleski has no position in the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway (B shares) and Goldman Sachs. The Motley Fool recommends the following options: $200 long calls in January 2023 on Berkshire Hathaway (B shares), $200 short puts in January 2023 on Berkshire Hathaway (B shares) and short calls of $265 in January 2023 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.


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