With the economic downturn, rising unemployment, decline in house prices, and limited ability for consumers to continue using their homes as an ATM; credit card debt is poised to be the next disaster in the financial sector with bearish outlooks for credit lenders Capital One (COF), Discover (DFS), and American Express (AXP). Credit card processors such as Visa (V) and MasterCard (MA) have also declined with the overall market, but are leveraged to the volume of transactions with debit and credit cards rather than credit quality as the pure-play lenders. Capital One reports after the market close today and is currently trading down by about 7% and I think it will trade at new lows below the $30 level on disappointing results.
$22.92 (10/16/08)
