Morning Note: Market news and an update from American Express

Market News

A jittery week on Wall Street ended on a positive note for stocks – S&P 500 (+0.5%); Nasdaq (+0.5%) – as President Trump’s remarks soothed anxiety around trade tensions. He said the US will “be fine” with China, as the two sides prepare to resume talks this week before a trade truce expires on 10 November. Furthermore, a batch of solid results from various regional lenders lifted the industry after a rout triggered by concern over credit quality in the economy. The futures market is currently indicating a further rise in stocks this at the open this afternoon.

After Friday’s heavy decline, precious metals have steadied somewhat this morning: gold $4,255 an ounce; silver $51.80 an ounce. 10-year Treasury yields are currently just above 4%. French bond futures slipped after S&P downgraded the nations credit rating in an unscheduled move. Brent Crude dropped to $61 a barrel hovering near six-month lows, as concerns over a global supply glut continued to weigh on prices.

In Asia this morning, the Nikkei 225 rose by 3.4% after the ruling party clinched a coalition deal. Other Asian also moved high: Hang Seng (+2.5%); Shanghai Composite (+0.6%). China’s GDP expanded 4.8%, easing for a second quarter. The slowing momentum comes as the Communist Party convenes a key annual four-day meeting to review priorities for the 15th Five-Year Plan.

The FTSE 100 is currently 0.5% higher at 9,401, while Sterling trades at $1.3425 and €1.1515. Recent economic data paints a mixed picture, with unemployment rising to 4.8% while wage growth remained elevated at 5.0%. Retail sales cooled significantly amid budget uncertainty, leading markets to price in additional interest rate cuts.

This week is a busy one for corporate earnings, with releases from Unilever, Heineken, Newmont Mining, P&G, IHG Group, Relx, Reckitt Benckiser, Atlas Copco, and Assa Abloy.

Source: Bloomberg

Company News

At the end of last week, American Express released strong Q3 results that were better than market expectations and nudged up its guidance for the full year. In response the shares rose by 7%.

AmEx is a globally integrated payments company whose platform includes card-issuing, merchant-acquiring, and card network businesses. American Express cards issued by American Express as well as by third-party banks and other institutions on the American Express network are accepted at c. 160m merchants around the world – a near 5-fold increase since 2017. The group has c. 85m proprietary cards in force generating around $1.55tn of annual billed business worldwide. With its premium customer base, the group has an aspiration to grow revenue by more than 10% p.a. and EPS in the mid-teens.

The company is benefiting from the ongoing shift from cash and cheques to electronic means of payment, and the growth of online retail, contactless, and mobile payment systems. We believe the industry is at an inflection point in terms of sales growth driven by the global proliferation of smart devices which provide a way to pay and to be paid. The group will also benefit from growth in connected devices and commercial payments. In emerging markets, a lack of physical communication infrastructure traditionally provided a barrier to payments growth, but that has been removed by the emergence of mobile phone technology and a government focus on digitalising cash to reduce the black economy.

In the three months to 30 September 2025, total revenue net of interest expense was up 11% at constant currency to a record $18.4bn. This was above the $18.1bn market expectation and primarily driven by increased card member spending, higher net interest income supported by growth in revolving loan balances and continued strong card fee growth.

The initial customer demand and engagement of the group’s updated US Consumer and Business Platinum Cards exceeded management expectations, with new US Platinum account acquisitions doubling compared to pre-refresh levels.

Card Member spend growth accelerated to 8% and the group’s credit metrics remained best-in-class. Performance across key areas, including card member spending, customer retention, demand for premium products, and credit performance, continued to be strong across the customer base. Processed volumes rose by 9%, with consumer customers outpacing SME . Transaction growth was 10%.

Revenue is made up of discount revenue (51% of the total, growing by 7%); net card fees (+17%); service fees and other revenue (+17%); and net interest income (+12%). The group saw continued high levels of customer engagement, acquisitions, and loyalty across its premium card member base.

Consolidated provisions for credit losses fell from $1.4bn to $1.3bn, reflecting a lower reserve build compared to prior year, partially offset by higher net write-offs. The Q3 net write-off rate was 1.9%, flat year-over-year.

Consolidated expenses were up 10% to $13.3bn, primarily reflecting higher variable customer engagement costs driven by higher card member spending. In addition, operating expenses increased 5%, while marketing expenses were up 9%. Net income per share was up 19% to $4.14, well above the market forecast of $4.00.

Based on the robust spending and credit trends the company has seen to date and the current economic outlook, AmEx has lifted its full-year guidance to the upper half of its previous target range: revenue growth of 9%-10% (vs. 8%-10% previously) and EPS of $15.20- $15.50 (vs. 15.00-$15.50 previously).

Source: Bloomberg