Credit Cards, Partial Havens After J.P. Morgan Credit Comments (JPM, AXP, COF, V, MA, PAY)

J.P. Morgan Chase & Co. (NYSE: JPM) is trading lower after its earnings report, but there were some bright spots inside an otherwise confusing earnings report.  The most noticeable area was credit cards.  This sector is very important as it helps Americans be the consumers that they love to be. 

While high unemployment and lower confidence due to Europe and Asia have weighed on what investors expect out of credit cards, J.P. Morgan’s credit card metrics seem to be a boost for other credit card outfits.  The highest credit quality bank showed that the loss rates in the credit card area was under 4.4%, down more than 3 and a half points from a year earlier and down almost a full point from the second quarter’s 5.3%.  The delinquencies of 30 days or more fell to 2.64% versus 2.73% in the second quarter and from 4.1% a year earlier.  The bank also noted higher spending of 10% from a year earlier and 2% from the second quarter.

American Express Co. (NYSE: AXP) is still down 1.3% at $46.40, but that is far better than the near-6% drop in J.P. Morgan shares today.  Capital One Financial Corporation (NYSE: COF) is down almost 4% today at $41.73, something that is a bit of a surprise considering how deep it is into credit cards.

Visa Inc. (NYSE: V) and Mastercard Inc. (NYSE: MA) are both up on the day as the spending and credit metrics trends are looking solid.  Visa shares are up 1.2% at $92.20 and Mastercard shares are up over 3% at $338.50.  These two stocks are even higher after a price-fixing case was brought against them by an ATM trade group.

We would have assumed that payment solutions provider VeriFone Systems, Inc. (NYSE: PAY) would have been higher as well, but its shares are down just over 3% at $38.28.

JON C. OGG