Consumer spending makes up over 70% of the US economy. Companies like Visa Inc. (NYSE:V) and MasterCard Inc. (NYSE:MA) rely heavily on the American consumer to spend, thereby generating transaction fees and also charging obscene interest rates if you carry a balance. It would seem from the charts that more and more people are now maxed out, and possibly falling behind on their minimum payments. While the stock market closes at new all time highs, Visa Inc. (NYSE:V) has been struggling to climb back to its highs made on January 21, 2014. This tells us there could be trouble on the horizon for the US economy.
If the US consumer cuts back on spending you can see how this would negatively affect both MasterCard Inc. (NYSE:MA) and Visa Inc. (NYSE:V), and cause a major slowdown in the economy. With the weekly chart on Visa Inc. (NYSE:V) setting up in a Bearish manner, we will be looking closely at a short entry in the coming days.
Evan Poechman
Elite Round Table
InTheMoneyStocks.com