Why American Express Stock Is Charging Higher Today
American Express (NYSE: AXP) has been posting solid results of late, but investors are worried about how long that can last if the economy slows ahead. On Thursday, management indicated it sees no signs of a slowdown, and shares traded up about 3% at 2:45 p.m. ET today as a result.
AmEx, a financial services company historically known primarily for catering to the rich, has done a good job in recent years expanding its reach to a broader slice of the market and growing profits in the process.
But the current economic climate offers some challenges to lenders. The Federal Reserve's aggressive moves to push interest rates higher threatens to slow economic growth and make it harder for consumers to pay their bills. When that happens, credit card companies typically have to set aside more money to cover potential losses, which can affect profitability.
Source Fool.com
