People who maxed out their cc once their home equity withdrawal was maxed/cut off will raid their 401k to pay their card off preserve their credit rating = stock sales.
Take a look at the chart and tell me do you expect anything better? Few people have confidence in that company. AXP is not the whole credit market.
More pain to credit card companies or is this a dip buy? Will be interesting to track MA and see if they come out with any company specific bad news in the near future.
American Express is considered to be the gold standard of credit card companies. They have the pickiest policies as far as who they issue credit cards... they only accept high credit scores with few or no deliquencies. They are widely acknowledged in the credit card industry of having the highest quality card holders. So basically if they turn out to have a lot of deliquencies, then look out below. Companies that issue subprime credit cards to a lot of deadbeats like capital one will get obliterated.
It may not be the whole credit market but its very serious. Credit Card delinquencies are going to skyrocket over the next 12-18 months. AXP could easily be trading down in the low 30's by year end. Only thing that will fix these problems is time. Lowering rates and adding liquidity to pump the markets higher wont do a thing.
Maybe the thought of the day. CC debt is largely unsecured and taking the place of Home Equity loans. It will be a mess if things continue on the current course.