American Express Tightens Credit Risk Appetite, Daily Volume Ranks 137th Amid Mixed Market Reactions

On August 19, 2025, American (AXP) closed with a 0.31% decline, trading with a volume of $0.68 billion, ranking 137th in the market's daily trading activity. The stock's performance was influenced by strategic shifts in consumer credit underwriting policies, which analysts suggest could impact long-term earnings visibility. Regulatory scrutiny over recent data privacy practices also contributed to short-term volatility, though no enforcement actions have been formally announced.

Recent developments indicate the company is recalibrating its risk appetite in the credit card sector. Executives confirmed adjustments to approval algorithms for high-limit accounts, a move expected to reduce default rates but potentially slow revenue growth. Market participants noted mixed reactions to the strategy, with some viewing it as prudent risk management while others expressed concerns about near-term margin compression.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to now delivered moderate returns. The 1-day return was 1.98%, with a total return of 7.61% over 365 days. The strategy's Sharpe ratio was 0.94, indicating good risk-adjusted returns. However, the maximum drawdown of -29.16% highlights its vulnerability during market downturns.