Author argues Trump's push to cap credit card rates lacks legal authority but any forced rate reduction would favor incumbents like AXP by reducing new-entrant competition, making an AXP pullback to the 200-day a buy.
AXP — LONG Author argues Trump has no authority to cap credit card rates, but if banks react to appease regulatory threats, any forced rate reduction favors incumbents because controlled pricing reduces new entrants' ability to take share. This dynamic would hurt PayPal's attempt to grow its credit card portfolio by making it harder to undercut the big players. Author says AXP likely won't pull back to the 200-day on this news, but if it does, it would be a buy.
I don't think, for example, that AXP will pullback to the 200 day on this news but if it does, it would be a buy.