For Immediate Release
Chicago, IL – November 18, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: American Express Co. (AXP), Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Capital One Financial Corp. (COF).
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Here are highlights from Tuesday’s Analyst Blog:
Mixed News for Credit Card Issuers
U.S. credit card issuers have reported a drop in the default rate for October, though delinquencies are rising as a result of continuing stress on consumers. While a decrease in the default rate reflects a decline in late payments in the first half of the year, the increase in delinquencies is bad news for the sector as it implies that the companies could experience more charge-offs in the coming quarters.
Consumers remain under stress as a result of the weakness in the housing market, combined with job losses. Recently, Fitch has also expressed its concern about the credit card issuers in the U.S. Fitch expects U.S. credit card issuers’ earnings to remain challenged over the near term as a result of soaring unemployment, bankruptcies and losses.
The default rate (or charge-off rate) has improved in October from the prior month. For American Express Co. (AXP) it was down 60 basis points (bps) to 7.8%, while for Bank of America Corp. (BAC) the rate dropped 103 bps to 13.22% in October. The situation was the same for JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Capital One Financial Corp. (COF). JPMorgan’s default rate declined 10 bps to 8.02%, Citigroup’s defaults fell 136 bps to 8.79% and Capital One’s charge-off rate decreased 73 bps to 9.04%.
However, we are concerned about the rise in delinquencies which increased 34 basis points to 5.72% in October at Capital One, 26 bps to 4.95% at JPMorgan and 6 bps to 7.59% at Bank of America. However, delinquencies remain unchanged at American Express.
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