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Why American Express Stock Fell 15% in December

By Demitri Kalogeropoulos - Updated Apr 15, 2019 at 4:15PM

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Investors got nervous about a global growth slowdown last month, but the real test for the stock is just up ahead.

What happened

American Express (AXP 1.45%) trailed the market last month by losing 15% compared to a 9% slump in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline detracted from an otherwise solid year for the credit card giant's shareholders, as the stock ended up modestly outperforming the market in 2018 with just a 4% loss.

A stack of credit cards.

Image source: Getty Images.

So what

December's swoon wasn't due to any company-specific data. Instead, the company joined most of its finance-focused peers in slumping last month as investor fears spiked over a potential global growth slowdown in the works. Such a drop would impact American Express' business because revenue is highly dependent on consumer spending patterns.

Now what

American Express stock jumped along with that of its rivals in early January, which shows just how much its short-term stock movements will be driven by shifting investor attitudes about the broader global growth picture. However, the company has a chance to take back control of its narrative when it reports fiscal fourth-quarter earnings results on Jan. 17. Its last outing showed healthy growth in loans and overall revenue while expenses stayed modest. Another positive report like that could send shares higher this month and erase much of December's downturn.

Check out the latest American Express earnings call transcript.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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