Are People Living Off Their Credit Cards?

Close to its 52-Week High, AXP (NYSE), it is the opinion of this author that people cannot afford day-to-day expenses and are falling back on their credit cards, the leader being American Express.

The Fed has declared that it will raise interest rates in 2017 which augurs poorly for AMEX and the other credit card companies which will have to write-off bad loans for those who cannot even make their minimum statement payments, which will go up as interest rates rise.

It is the opinion of this author that AXP will have to reduce or eliminate its 1.67% dividend yield and the stock will fall before or when that happens.

Chief Executive Officer Ken Chenault has said quarterly results will be uneven and expenses will rise as the company spends more to recover from the loss of its largest co-brand card partner, Costco Wholesale Corp.

For leverage more than a straight short, the $65 1/19/18 Puts traded 179 contracts with the last price being $3.15.

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