Plastic staying home alone this holiday shopping season

Shoppers are leaving home without it this year.

An estimated 28.3% of consumers will use credit cards to pay for holiday gifts this year, according to a survey by the National Retail Federation and BIGresearch. That would be a drop from the 31.5% of consumers who paid with credit cards during the 2008 holiday season. Read more

Credit card defaults move up again in August

Credit card portfolios at the country’s major banks showed a rising tide of defaults in August. That pretty much wiped out the hope the July’s numbers, which showed a glimmer of improvement marked any bottom in bad loans for the sector.

Consumers. whose spending accounts for about 2/3 of U.S. economic activity, are clearly still in deep trouble.

Among the big three of credit cards, Bank of America (BAC)  reported the highest level of write-offs at 14.54%. That’s up from 13.81% in July. Citigroup’s (C) bad credit card loans rose to 12.14% in August, up from 10.3% in July, and JPMorgan (JPM) saw write-0ffs climb to 8.73% in August from 7.92% in July. Read more

Leave home without it: JPMorgan Chase targets American Express

If you’ve wondered what JPMorgan Chase (JPM), one of the winners in the banking crisis, is going to do to savage more damaged competitors, wonder a little less. On September 14, the bank announced it is going after American Express (AXP) and its highly profitable high end card customers.

 The effort is called Chase Blueprint and it’s targeted right at those credit card customers who have the income to decide how much of their monthly bill they’ll pay off interest free and how much they’ll turn into a monthly balance.

 The key to the effort is a software billing program that will allow the holders of the company’s 152 million cards to decide which monthly purchases to pay off interest free–the traditional American Express card model–and which to finance. Read more

What to look for today July 24: The traditional Friday selling after a rally

Thank God it’s Friday.

After moving up so strongly–aother 4% gain on the Standard & Poor’s 500 stock index from Monday to Thursday–the stock market is almost certain to retreat tomorrow.

But because it’s a Friday–and the market almost always sells off on a Friday is stocks have been rallying in the first part of the week–and because Microsoft (MSFT) , Amazon.com (AMZN), and American Express (AXP) delivered bad earnings news after the closing bell, the market can sell off tomorrow and nobody will think much of it.

A sell off tomorrow won’t change investor sentiment or stock market momentum and we’re likely to be off to the races again on Monday.

Friday selling works like this. Investors–well, traders really–who have made good money over in the week tend to sell on Fridays. It’s part human nature and part risk management. Who wants leave gains exposed to the unpredictable nature of the news flow over a weekend when you can’t even trade if something goes against your positions. (The opposite tends to happen on Fridays after a losing week. Traders who have made money betting against the market during the week buy on Friday to bring their portfolios nearer to neutral.)

After a Thursday when the Dow Jones Industrial Average broke 9,000 again–a level not seen since December–and when the S&P 500 index took out its June 12 high–I’d certainly expect selling on that Friday.

Any normal Friday selling that we might have seen anyway will be strengthened of Friday July 24 by the disappointing earnings news announced by Microsoft, Amazon.com, and American Express late Thursday.

Microsoft managed to meet Wall Street earnings projections but revenue fell by 17.3% and wound up almost $1.3 billion short of Wall Street estimates.

Amazon.com disappointed by reporting exactly what Wall Street expected on earnings and revenue and then not saying anything about business improving in the September quarter

American Express beat estimates on earnings by a penny, but came ujp $400 million short on revenue. Revenue fell by more than 18% from the same quarter of 2008.

If stocks go down this Friday, no one will think much of it–it’s just a Friday correction. If they go up, against pattern, investors will read this as a sign that the rally has further to go.

All in all, TGIF.

and Especially since the earnings reports after the close