Was AMEX's Big Drop Predictable?
Saturday, January 12, 2008
So this morning the credit-card giant American Express (NYSE: AXP) came out and said that it is adopting a "cautious view" for 2008 because recently, in December, credit-card delinquencies rose to new highs. It didn't help the stock that it got a few analyst downgrades to boot.
Call me crazy, but I didn't I blog only a few weeks ago about an Associated Press article that said this is exactly what was going to happen? Granted, in that same post I warned to be careful playing the credit-card stocks because I was afraid this news might already be priced in. American Express dropped 10% today - its worst one day decline in over 5 years, and my only question is: why wasn't this priced in? Based on all the available evidence, it shouldn't have been any shock to find out that this was going to happen, and yet the market reacted as if they had little idea it was coming. I guess its funny how the stock market thinks sometimes.
Posted by Rob Pitingolo 12:38 AM
Labels: American Express Co.
