{"id":3828,"date":"2023-10-20T21:56:41","date_gmt":"2023-10-20T21:56:41","guid":{"rendered":"https:\/\/infundpros.com\/markets\/american-express-boasts-record-profits-credits-strong-spending-despite-economys-red-flashes\/"},"modified":"2023-10-20T21:56:42","modified_gmt":"2023-10-20T21:56:42","slug":"american-express-boasts-record-profits-credits-strong-spending-despite-economys-red-flashes","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=3828","title":{"rendered":"American Express Boasts Record Profits\u2014Credits \u2019Strong\u2019 Spending Despite Economy\u2019s Red Flashes"},"content":{"rendered":"
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Topline<\/h2>\n

American Express reported record quarterly profits in its earnings report Friday as the high-end credit card company fights off negative consumer effects from the interest rate-induced weaker economic environment\u2014and even profits off of it.<\/p>\n

Key Facts<\/h2>\n
\n
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The credit card giant\u2019s $15.4 billion and $3.30 earnings per share both came in well above consensus analyst estimates, breaking bottom line records hit last quarter and setting a new sales record for Q3.<\/p>\n<\/p><\/div>\n

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American Express cardholders spent $420.2 billion during the third quarter, 7% year-over-year growth, evidence of \u201cstrong\u201d spending as demand for American Express\u2019 high-fee credit cards stayed \u201chigh,\u201d CEO Stephen Squeri said in a statement accompanying the earnings release.<\/p>\n<\/p><\/div>\n

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That confidence in consumers comes amid a rash of warnings about what the highest interest rates in nearly two decades will mean for discretionary spending as borrowing costs soar.<\/p>\n<\/p><\/div>\n

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And it\u2019s not just that higher rates have failed to dampen spending among cardholders, but the company actually has the Federal Reserve\u2019s hiking campaign to thank for the elevated profits.<\/p>\n

<\/fbs-ad>\n <\/div>\n

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Its $3.4 billion in net interest income was a 34% year-over-year increase and a whopping 73% jump from the third quarter of 2021.<\/p>\n<\/p><\/div>\n<\/div>\n

Key Background<\/h2>\n

Since last March, the Federal Reserve has raised the target federal funds rate from roughly 0% to 5.25% to 5.5%, the fastest rate of increases seen in decades as the central bank moved aggressively to cool inflation. The financial services industry has felt a sharp impact from these rapid rate changes, most notably evidenced by three of the four largest bank failures in American history coming during the first half of this year. Though the U.S. briefly entered a technical recession last year, the economy has so far proved resilient mostly on the back of strong consumer spending as retail sales continue to grow, albeit at a slower pace. However, there have been recent signs of the American consumer weakening. The Conference Board\u2019s consumer confidence index slipped last month to a near 12-month low and destruction in the bond market approached historic levels, as 10-year U.S. Treasury note yields surged past 5% for the first time in 16 years.<\/p>\n

What To Watch For<\/h2>\n

American Express rivals Visa and Mastercard will both report quarterly results next week. Most of the credit card giants\u2019 big bank peers reported mostly strong earnings over the last two weeks.<\/p>\n

<\/h2>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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