Thursday, March 15, 2012

Best Wall St. Stocks Today: V,MA,DFS,AXP

Americans are still shrinking their credit according to the latest data from the Federal Reserve.� July marked a sixth consecutive drop and the seasonally adjusted rate of credit contraction came to down 1.8%.� Overall, this came to $3.6 billion less to $2.42 trillion in July.� We had two figures seen ahead of this number: -$3.5 billion from Bloomberg and -$5 billion from Dow Jones.

Revolving credit fell by more than 6% or by $4.4 billion to $827.8 billion.� While all act differently, today’s news has at least some continuing implications for Visa, Inc.� (NYSE: V), MasterCard Incorporated (NYSE: MA), Discover Financial Services (NYSE: DFS) and American Express Company (NYSE: AXP).

There was a slight gain to non-revolving credit that showed a 0.6% rise for those categories like cars, school loans, vacations, and one-time purchases.

The report here is a bit muted because this trend in revolving credit is lower almost monthly.� Another muting figure is that the June report showed that the drop was roughly $1 billion rather than $1.3 billion previously reported.

This trend is coinciding with a drop in delinquencies and in charge-offs by credit card companies.� With no real job growth and with many of the current and forecasts expected to remain subdued, looking for any real credit increase might not be in the cards.

Visa, Inc.� (NYSE: V) and MasterCard Incorporated (NYSE: MA) both took a hit today, although the damage on them was done earlier than the 3PM report from the Federal Reserve.� Bank of America Merrill Lynch cut its� “Neutral” rating on Visa down to an even worse “Underperform” rating.� That just matched its prior call on MasterCard.� Visa was down 4.1% at $68.55 and MasterCard was down 3% at $194.40 on the day.� BofA’s downgrade was tied not so much to credit balances but over doubts of pricing power and credit card processing fee regulatory concerns.

Card issuers Discover Financial Services (NYSE: DFS) and American Express! Company (NYSE: AXP) did not share the same fate for the most part.� AmEx was slightly lower by only $0.02 at $40.07 after an already large debt offering group was made even larger to $2 billion of all the debt sold Wednesday and Discover was actually up 2% to $15.62 on the day.

This is a fair question to ask… Have you de-leveraged your financial life yet?

JON C. OGG

No comments:

Post a Comment