Credit card giant American Express saw its stock plummet 7.5% today, which is a rarity for such a large and established company. The downturn in AMEX stock is predicated largely on a post from a user on X called “Citrini” who laid out a plausible scenario where a recession can happen in mid-2028 due to artificial intelligence taking a large amount of white collar labor. Citrini claims that the potential recession could see unemployment of up to 10%. In addition to the claims on X, Fed Governor Chris Waller stated that a potential positive February job report could be used as potential rationale behind the Fed keeping interest rates steady.
The combination of the two aforementioned pieces of information led to a sizable downturn in AMEX stock due to investors wanting to “de-risk” their portfolios and avoid being hit with a bigger loss down the line, especially with how hot stocks have been running. It’s certainly interesting to see how impactful mere reports can be, especially from a user on X having the ability to have large influence on the behavior of investors.
https://finance.yahoo.com/news/why-american-express-plunged-today-190948259.html
I like how you explain how quickly market can shift based on news and even social media speculation. It’s interesting to see how a single post, combined with comments from a Fed official, can influence investor behavior and lead to a significant drop in a major stock like American Express. It really highlights how sensitive the market is to recession fears and uncertainty about the future.
ReplyDeleteThe fact that social media can make a company drop 7.5% is astonishing. AMEX could simply fix this looming problem and have this all happened for no reason. I like how you point out the fact the investors are "de-risking" their portfolio. Taking risk away is smart but getting your information from X is simply absurd.
ReplyDeleteIt's crazy how a single social media post can cause a well established company to drop 7.5%. However, this is a great example of how "jumpy" investors are at the moment. It's also a great example of how prominent social media is in modern day.
ReplyDeleteI feel like it is really concerning how much of an effect that social media has on people. This is a great example of how negative social media can be for the economy. I think it will be interesting to see the effect that social media will have on the economy as more people are using it as there main or only source of news. It is very surprising how hard of a hit a big company like American Express can take just because of one negative post like this on X.
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