Account
New to ADSS? Open an
account now to get started.
Already have an account?
Add funds to your ADSS account
Account
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
What’s happening: Shares of American Express Company fell on Friday, after the company released its second-quarter results.
What happened: The payments giant reported record sales and better-than-expected earnings for its second quarter on Friday.
Amex announced plans to raise its marketing spend, following a slowdown in its credit card billings growth.
How were the results: American Express reported single digit growth in sales for the three months ended June 30.
Why it matters: Despite weakness in the US economy resulting in tepid loan demand, American Express reported record revenues due to its large base of wealthy customers. Its profits surged 39% year-over-year to $3.02 billion, or $4.15 per share, in the second quarter.
However, data signalling a slowdown in wage growth raised concerns around an easing in spending growth versus the previous quarter.
Billed business, a measure of spending on the company’s cards, rose 6% year-over-year during the second quarter, a slowdown from the 7% growth recorded in the first quarter.
US Consumer Services revenues rose 12% year over year to $7.73 billion, while Commercial Services revenues gained 6% to $3.95 billion last quarter. International Card Services revenues grew by 9% to $2.82 billion, while Global Merchant and Network Services revenues rose 1% to $1.87 billion in the second quarter.
Provision for credit losses were $1.3 billion in the quarter, up from $1.2 billion in the year-ago period, signalling increased net write-offs.
“We continued to drive momentum across the business, including stable growth in billings at 6 percent, strong new card acquisitions of 3.3 million, double-digit growth in card fee revenues for the 24th consecutive quarter, and excellent credit performance, which remained best in class,” CEO Stephen Squeri said during the earnings call.
Management reiterated their revenue growth outlook for fiscal 2024 of 9% to 11% ($65.96 billion to $67.17 billion). They raised the earnings forecast to $13.30-$13.80 per share, from their earlier outlook of $12.65-$13.15 per share.
The company projected marketing expenses at approximately $6 billion for the year, up around 15% from 2023.
How shares responded: Amex’s shares fell 2.7% to close at $242.38 on Friday, following the release of quarterly results. The stock has jumped 31% over the past six months.
What to watch: Investors will watch the company’s spending on marketing, which is expected to significantly impact its overall results ahead. Higher borrowing costs will also remain one of the major concerns for investors.
Context: Gold prices settled lower on Friday to record their first weekly decline in a month.
Details: Gold prices have been on an uptrend over the past three weeks, with increased speculations of an interest rate cut by the US Federal Reserve in September.
Prices of the safe-haven metal had surged to an intraday record high of $2,488.40 during Wednesday’s session last week, after notching a record closing high of $2,467.80 on Tuesday.
However, gold prices retreated on Friday amid concerns over weak retail investment demand worldwide, mainly in China, which is the number one consumer of the metal.
Strength in the US dollar and higher benchmark 10-year Treasury yields also exerted pressure on gold prices. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose around 0.2% to 104.37 on Friday.
Gold for August delivery plunged $57.30, or 2.3%, to close at $2,399.10 an ounce on Comex on Friday. Prices for the yellow metal recorded their biggest daily percentage decline since June 7, falling 0.9% last week after gaining for three weeks in a row.
Silver for September delivery declined 92 cents to settle at $29.30 per ounce on Friday, while September copper declined 4 cents to $4.24 per pound.
What to watch: Investors will continue monitoring gold demand from China, which is expected to significantly impact gold prices ahead. The US dollar and the Fed’s moves will also remain in focus.
Other Markets: European indices closed lower on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.60%, 1%, 0.69% and 0.77%, respectively.
Following a massive drone and missile attack by Russia, Ukraine’s President Volodymyr Zelenskyy said long-range weapons are needed to protect their military troops on the frontline. The news sent the RUB/USD pair higher in forex trading this morning.
The People’s Bank of China slashed its key lending rates to new record lows at the recent fixing, which exerted pressure on the CNY/USD forex pair.
New Zealand recorded a trade surplus of $699 million in June, versus $204 million in May. Despite the latest reading coming in higher than market estimates of $294 million, the NZD/USD pair fell slightly in forex trading this morning.
Colombia’s trade deficit widened to $1.089 billion in May, from $0.921 billion in the year-ago month, exerting pressure on the COP/USD forex pair.
Canada’s industrial producer prices came in unchanged for June, compared to 0.2% growth in the prior month, sending the CAD/USD pair lower in forex trading this morning.
Mexico’s economic activity and retail sales, US Chicago Fed National Activity Index, China’s foreign direct investment, Spain’s consumer confidence indicator, Central Bank of Brazil’s focus market readout, as well as Turkey’s government debt.
ADSS
8th floor, CI Tower
Corniche Road
PO Box 93894
Abu Dhabi
United Arab Emirates
Trading Services
ts@adss.com
+971 2 657 2414
Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.
ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.
The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.
ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.
