Signals

Signals: Public fintechs are becoming affirmatively profitable

The TWIF Index is a price-weighted index of 15 publicly-traded fintech companies: Visa, Mastercard, American Express, Block, PayPal, Fiserv, FIS, Global Payments, Adyen, Shopify, Nubank, Coinbase, Robinhood, FICO and Experian.

Hello, Fintech Friends!

Central bankers from all over the world met at the Jackson Hole Economic Policy Symposium, and jointly concluded that the fight against the inflation is going according to the plan, so it is time to cut rates. "The time has come for policy to adjust", said Jerome Powell, after the symposium.

"The timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks," added the Chairman. As of this writing, the market assigns a 70% probability of a 25bps rate cut and a 30% probability of a 50bps rate cut the Federal Reserve's September meeting.

Fintech companies, in the meantime, continued to report their Q2 2024 results. We saw many strong reports with a common theme: fintech companies continue to grow, and they continue to grow profitably. The TWIF index is up +25.1% YTD and continues to outperform Nasdaq Composite (+11.2% YTD) and S&P 500 (+13.4% YTD).

The fintech industry didn't die in this rate hiking cycle. Many of them came out of this cycle stronger. Let's see what the future holds when the rates start coming down.

Jevgenijs
p.s. Have feedback? Just ping me on X/Twitter.
Happy to hear what we can improve in this column!

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