Ken Chenault,CEO of American Express,saw improvement in his cardholders' credit metrics for the first time in 18 months,but,while his rates were better than expected,they still remain high by historical standards.The external challenges are not going to go away anytime soon,Mr.Chenault told investors.Bankruptcies will rise in Q3-4,and,as the yield on 10-year Treasuries rise because of increased issuance to pay for federal programs,mortgage and other rates will go up as well.
The largest decline in spending,Ken Chenault observed,is by the wealthiest clients.The economy,not housing,is driving the decline in spending.Still,the easing of credit card write-offs is allowing AmEx to resume investing in important areas such as marketing,promotions and customer acquisition programs.Mr.Chenault believes that Q3 Gross Domestic Product will rise 1%.
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