Government data pointing to cooling inflation helped buoy FinTech IPO names this past week.
Retail sales data Thursday (June 15) showed that consumer spending remains resilient, which helped give the rally some tailwind.
For the month of May, retail sales were up 0.3% compared to April. The latest reading bucks the consensus that held that spending would dip last month.
The confluence of a Federal Reserve interest rate hike pause and a muted level of price increases augurs well for some of the platforms that have sought to digitize and modernize lending and other verticals.
Through the past few days, Wall Street analysts have detailed the opportunities ahead for these platforms if macro trends remain favorable.
Upstart Holdings shares rallied more than 29%. CBS MarketWatch reported that BTIG analyst Lance Jessurun initiated on the name with a “buy” rating and $42 price target.
Elsewhere, SoFi shares gained 25% through the past five sessions. As reported by Bloomberg, BTIG initiated coverage on the name with a buy rating and cited a significant upside on the heels of a resumption in student loan payments.
Earlier this month, SoFi said it had debuted a tool that allows companies to help employees pay off student loan debt and still save for retirement.
The personal finance company’s SoFi at Work unit unveiled its student loan verification (SLV) service, launched in response to a recent change in retirement laws. The change, part of the Securing a Strong Retirement Act, lets companies match employees’ student loan payments with contributions toward retirement plans as part of a benefits program.
PYMNTS data showed that student loans are squeezing consumers, especially those who are part of Generation X. The average loan held by a Gen Xer stands at $43,438, with loan payments making up 8.8% of their disposable income.
Shares of Affirm were up 5.2%.
Amazon has added Affirm’s pay-over-time option to Amazon Pay. In terms of mechanics, United States merchants using Amazon Pay can allow their customers to choose the pay-over-time option at checkout.
The Amazon collaboration came a week after Affirm partnered with Worldpay to make Affirm’s Adaptive Checkout offering and its payment options available to eligible Worldpay merchants.
In an interview earlier this month with Yahoo Finance, Affirm CEO Max Levchin discussed U.S. consumers, the overall state of spending and the economy.
The U.S. consumer “is still well employed,” he said, per the report. “The U.S. economy is performing a lot better, a lot more resiliently than some of the naysayers had said six months ago, nine months ago. That said, I think nothing’s really off the table in terms of, is there going to be a recession, is there not going to be a recession, until we find out what happens with the student loan repayment restarts sometime in the fall.”
dLocal shares gained 20%. The company announced in a June 7 press release that Co-founder Sergio Fogel is assuming duties as co-president and chief strategy officer. The company also noted that “certain key shareholders” have since December of last year purchased in the aggregate amount of approximately $160 million of class A stock.
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