What happened
The share price of Nu Holdings (NU 0.40%) was moving higher Thursday morning, up as much as 7% at about 10:19 a.m. ET. By approximately 12:20 p.m. ET it was only up about 0.7% to $5.46 per share.
Meanwhile, all of the major indexes were down, with the Dow Jones Industrial Average down 0.5%, the S&P 500 down 1%, and the Nasdaq 1.3% lower as of 12:20 p.m. ET.
What drove the Brazil-based digital bank higher on Thursday?
So what
Nu Holdings, the holding company for Nubank, is a digital bank that serves Brazil, Mexico, and Colombia. It was rising along with other bank stocks in the morning session, as JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachs, and SoFi, to name a few, were all trading higher.
While there did not appear to be one specific catalyst, there was some decent economic news that investors hope signals things aren't as bad as many expect. Namely, jobless claims fell for the fifth straight week, retail sales were up 0.3% in August, beating expectations, and the benchmark 10-year Treasury yield moved up to 3.45%, which is seen as a sign of investor confidence.
NYSE: NU
Key Data Points
Also, there was a report by Bloomberg Thursday that major U.S. banks, including Citigroup and Goldman Sachs, are investing in Latin American start-ups to help them expand. The article stated that Nu Holdings took out a $650 million line of credit in April from several large U.S. banks to expand into Mexico and Colombia.
Now what
Banks may have also been buoyed by comments made by Morgan Stanley analyst Andrew Slimmon Thursday that he believes inflation peaked in July and the S&P 500 will finish the year with some positive momentum and be close to where it started 2022.
Nu Holdings, which is a stock that Berkshire Hathaway invests in, has continued to grow, hitting record revenue in the second quarter, and becoming profitable in its major market, Brazil. The company made some new hires and executive appointments over the summer designed to expand its operations in Latin America, including naming its co-founder, Cristina Helena Zingaretti Junqueira, as chief growth officer. It is a huge addressable market for Nu Holdings, and this is a stock to watch as we emerge from this economic and market malaise.
