What Happened?
A number of stocks fell in the afternoon session after markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Specialized Technology company PAR Technology (NYSE: PAR) fell 2.8%. Is now the time to buy PAR Technology? Access our full analysis report here, it’s free.
- Data & Business Process Services company TransUnion (NYSE: TRU) fell 3.4%. Is now the time to buy TransUnion? Access our full analysis report here, it’s free.
Zooming In On TransUnion (TRU)
TransUnion’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.9% on the news that the company announced a strategic partnership with Truework to expand its income and employment verification solutions. This collaboration with the leading verification provider follows a strategic minority investment TransUnion made in Truework earlier this year. Together, the two companies plan to provide comprehensive income verification coverage by combining Truework's platform with TransUnion's robust credit data. They also intend to jointly develop the next generation of verification of income and employment (VOIE) solutions. The partnership is expected to accelerate the distribution of these services to TransUnion's customers, improving the verification process for lenders and the experience for consumers.
TransUnion is down 2.4% since the beginning of the year, and at $89.68 per share, it is trading 17.5% below its 52-week high of $108.67 from October 2024. Investors who bought $1,000 worth of TransUnion’s shares 5 years ago would now be looking at an investment worth $1,057.
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