Financials can continue to report profits during a rate hiking cycle as the increase in interest rates means they can charge higher rates. So, this is why the strong seasonal pattern in American Express is worth looking at. The Fed is expected to hike rates by at least 50 bps in May and the concern is that the Fed will be hiking just as US growth is slowing. In the worst-case scenario that could mean US consumers reduce their spending. Therefore, if a US recession is feared then the reduction in consumption could harm the short to medium-term profitability of American Express.

Between April 08 and May 02, American Express has risen a total of 12 times over the last 14 years. The largest fall was -6.19% in 2020. The largest gain was a huge 73.54% in 2009 as the stocks bounced back from the Global Financial Crisis. More gains to come this year in April?

Major Trade Risks: If the Fed’s aggressive rate-hiking stance prompts fears of a US recession that can impact Amercian Express’ share price.