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Credit card stocks, Visa (V), MasterCard (MA) and American Express (AXP) rose 5.4%, 6.6% and 6.3% respectively on Wednesday, April 29. MasterCard Q1 earnings report beat analysts’ expectations.
Wednesday, April 29, 2020, was a good Wall Street day as most stocks skyrocketed, led by MasterCard Inc (NYSE: MA), Visa Inc (NYSE: V) and American Express Company (NYSE: AXP). The rise is being attributed to several factors that played put before the marker closed.
Visa (V), MasterCard (MA) and American Express (AXP) rose 5.4%, 6.6% and 6.3% respectively on Wednesday. But today they are in red. Visa stock is 0.87% down, at $180.21. MasterCard stock is at $278.25 (-1.92%). American Express stock is trading at $93.72 (-2.62%).
One, Gilead Sciences Inc (NASDAQ: GILD) revamped our hopes on returning to our normal lives after preliminary results showed promising and potential treatment for the coronavirus, which has infected over 3 million people globally and killed over 200K victims at the time of reporting.
The other possible result of the rise especially for MasterCard was due to the positive Q1 report which beat analyst expectations. With the coronavirus spreading due to human contact, most people have resulted in using credit cards and other e-money services like PayPal Inc (NASDAQ: PYPL), and some cryptocurrencies.
As more people used credit cards, some card issuers led by American Express waived interest and also late payment fees. Many other top issuers gave directives on their websites dedicated to assisting customers to relieve coronavirus financial pressures.
The rise in these stocks is expected to continue rising as long as the coronavirus remains an immediate threat to humanity. However, consumer spending, which is significantly reduced, will affect most of these stocks until people feel safe to go out and spend without fear.
The Motley Fool noted that transaction volume and cross-border payments volume increased during the week of April 21 in regards to the prior week. Most investors are gaining confidence that the worst part of the coronavirus is behind us, and the economic impact may be on its way to regaining in full.
MasterCard Q1 Earnings and Visa Performance
The company reported earnings per share of $1.83 on revenue of $4 billion. The gross dollar volume jumped by 8% on a local currency basis to $1.6 trillion. In addition, switched transactions increased by 13%, however, its cross-border volume dropped by 1% on a local currency basis.
The company also reported that for the week that ended on April 21, its cross-border volume sank 49%, as switched transactions and switched volume dropped 20% each. The MA shares closed yesterday at $283.69 after adding 19.09.
The result was in contrary to the set expectations, whereby Wall Street expected MasterCard earnings per share to drop by 2%, at $1.74. The expectations were not outrageous since the company had given revenue warnings for the first quarter.
Analysts are expecting Visa earnings for the first quarter, which will be released later today to rise 3% to $1.35. It was derived from the swelling revenue that rose by 5% to $5.77 billion.