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Two Ways To Play: Bad Grade For American Express?


Strengthen your portfolio in good times and bad.

Bloomberg reports American Express (AXP) may have its credit ratings cut by Moody's. Moody's said AXP is under review to have its A1 rating lowered by one level because of expected future losses from underperforming credit-card loans.

Analyst Blaine Frantz wrote in a note that AXP may suffer further loan losses "particularly within geographic markets in the United States that have experienced sharp home price declines."

The stock saw heavy selling after the news hit the tape. AXP finished the day down -4.19% to $36.40.

See Professor Andrew Jeffery's Investors Quietly Flee Credit Card Debt.

From the Bull Pen: SVB Financial Group (SIVB) seems to be the best financial play. Todd mentioned that even MasterCard (MA) and Visa (V) seems like they may be victims of the slowing global growth theme. Bulls can enter SIVB at the $55 mark with tight sell-stops below.

From the Bear Cave: Bears can press the downside in AXP on the belief that the stock could see accelerated selling should it break multiyear support at $35.
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No positions in stocks mentioned.

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