Visa earnings preview: Moving further beyond credit cards

Visa Inc.’s Thursday afternoon earnings report will cap off a fiscal year in which the payments giant branched further beyond traditional credit and debit cards.

Among Visa’s big areas of focus in fiscal 2019 were Visa Direct, a function that lets users get paid using the card infrastructure, and B2B Connect, a cross-border commercial platform. The company expects both of these to be growth drivers in future, as Visa Direct benefits from trends such as the rise of gig-economy businesses that are looking to pay workers more quickly than every two weeks. B2B Connect allows Visa to tap into a lucrative new market for the company where credit cards don’t get much play.

The company turned to acquisitions as well as it broadened its capabilities. In the June quarter alone, the company made four deals, which Chief Financial Officer Vasant Prabhu said were meant to help Visa extend its reach.

“A lot of what goes on in our industry is you partner with [companies offering new capabilities] because that’s how you extend your network and add more services and all that,” Prabhu told MarketWatch in a mid-September interview. But in the case of its Earthport deal, Visa saw an opportunity to double the amount of bank accounts it could reach, to 99% of those in major countries, by buying the company outright. With its deal for processing company Payworks, Visa pulled the trigger only after first partnering with the German company.

PayPal earnings: Expect ‘more catalyst potential than usual’

Cantor Fitzgerald analyst Joseph Foresi wrote in a recent note to clients that “the card network’s ability to expand its addressable market is a key opportunity and area of focus.”

Expect more talk of activity beyond traditional card swipes, dips, and taps when Visa begins discussion of fiscal 2020 on its

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Travelers, McDonald's stocks exact 150–point toll on Dow as broader stock market ends lower amid political clouds

U.S. stock indexes skidded lower into Tuesday’s close, amid negative headlines on Brexit and reports related to President Donald Trump’s impeachment inquiry. The Dow Jones Industrial Average DJIA, -0.15% closed nearly 40 points, or 0.2%, lower at 26,788, with a post-earnings skid for shares of Travelers Cos. Inc. TRV, -8.29%, off $11.76, or 8.3%, and McDonald’s Corp. MCD, -5.04%, down $10.58, or 5%, combining to deliver a 151-put headwind to the blue-chip index. Meanwhile, the S&P 500 index SPX, -0.36% closed down 0.4% at 2,996, slipping below a psychologically significant level at 3,000, while the Nasdaq Composite Index COMP, -0.72% finished 0.7% lower at 8,104. All closing levels are on a preliminary basis. The Wall Street Journal and others reported that U.S. diplomat Kurt Volker told the Ukrainian president he needed to convince Trump he was willing to investigate corruption and alleged Ukrainian 2016 election interference against former Vice President Joe Biden and his son, said the paper, citing people familiar with the former envoy’s recent testimony to Congress. The disclosures may intensify the Congressional investigation into allegations that Trump withheld federal funds in exchange for a probe into a political rival. Separately, investors focused on on Brexit after U.K. lawmakers endorsed Prime Minister Boris Johnson’s plan to leave the EU but voted against a fast-track plan that would have seen the country leave the trade bloc by Oct. 31, increasing some uncertainty around Brexit.

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Dow flat despite losses for Travelers, McDonald's stocks

Shares of Travelers and McDonald’s are posting losses Tuesday afternoon, though the Dow Jones Industrial Average is trading essentially flat. The Dow DJIA, -0.15% was most recently trading 2 points, or 0.0%, lower, as shares of Travelers TRV, -8.29% and McDonald’s MCD, -5.04% account for -53% of the blue-chip gauge’s intraday losses. Travelers’s shares have fallen $11.65 (8.2%) while those of McDonald’s have fallen $9.40 (4.5%), combining for a roughly 143-point drag on the Dow. Also contributing significantly to the decline are Merck MRK, -3.81%, Visa V, -3.16%, and Microsoft MSFT, -1.49%. A $1 move in any of the benchmark’s 30 components results in a 6.78-point swing.

Editor’s Note: This story was auto-generated by Automated Insights using data from Dow Jones and FactSet. See our market data terms of use.

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Here’s why the stock market is so sensitive to tweets and political headlines right now

If it feels like the stock market and other financial assets are jumping and falling in reaction presidential tweets and news headlines to an unusual degree, it isn’t your imagination, argues one investor.

“Today’s markets are whipsawed by political slings and arrows, often in the form of tweets or breaking news reports. And ‘investors’ increasingly are reacting impulsively to a reality that’s shifting minute-by-minute,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company, in a Monday note. “Put differently, broad swaths of equities can flip from winners to losers in an incredibly short time period — perhaps in the wake of a single tweet.”

‘We believe politics inordinately captures the market’s attention because it’s the only reason that a recession could ensue in the coming months.’

Brent Schutte, Northwestern Mutual

Read: The more Trump tweets, the worse it is for stocks, research finds

Schutte acknowledged that to say that investors don’t like uncertainty is to repeat a cliché. After all, when is life predictable?

But now that social scientists have devised methods to attempt to measure uncertainty, market watchers feel more comfortable quantifying uncertainty — and right now, by one such measure, that uncertainty is running at near historical levels after rising to just below an all-time high in August (see chart below).

Northwestern Mutual Wealth Management Company

Schutte highlighted the U.S. Economic Policy Uncertainty Index, devised by economists Scott Baker of Northwestern University, Nick Bloom of Stanford University and Steven Davis of the University of Chicago, which draws on search results from 10 large U.S. newspapers, reports by the Congressional Budget Office that compile tax code provisions due to expire over the next 10 years, and the Philadelphia Fed’s survey of professional forecasters.

Need to Know: New S&P 500 highs are riding on

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