Trump Proposes 10% Credit Card Rate Cap, Bank Stocks Decline
Written by Emily J. Thompson, Senior Investment Analyst
Source: seekingalpha
- Rate Cap Proposal: President Trump proposed a cap on credit card interest rates at 10%, which drew immediate opposition from major banking groups, who argue that this policy could push consumers towards less regulated and more costly alternatives, potentially destabilizing the credit card market.
- Market Reaction: Following Trump's announcement, major credit card and issuer stocks fell in premarket trading on Monday, with Capital One Financial down 8.8% and American Express down 4.4%, indicating the market's sensitivity to potential policy changes.
- Industry Concerns: A joint statement from the American Bankers Association and other financial institutions warned that implementing this rate cap could negatively impact consumers and lead to decreased liquidity in the credit market, thereby affecting banks' profitability.
- Stock Volatility: The proposed policy led to declines in stock prices for several large banks, including JPMorgan Chase and Wells Fargo, reflecting investor concerns about future earnings prospects and potentially weakening market confidence.
Analyst Views on AXP
Wall Street analysts forecast AXP stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AXP is 351.42 USD with a low forecast of 280.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
7 Buy
12 Hold
2 Sell
Hold
Current: 382.980
Low
280.00
Averages
351.42
High
400.00
Current: 382.980
Low
280.00
Averages
351.42
High
400.00
About AXP
American Express Company is a globally integrated payments company with card-issuing, merchant-acquiring and card network businesses. It offers products and services to a range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its segments include U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). USCS offers travel and lifestyle services as well as banking and non-card financing products. CS offers payment and expense management, banking and non-card financing products. ICS provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business. GMNS operates a payments network that processes and settles card transactions, acquires merchants and provides multichannel marketing programs and capabilities, services and data analytics.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
