Signals

Signals: "fintech is back" has become the consensus

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!

Many things happened since the previous Signals issue on publicly traded fintech companies. Donald Trump won the U.S. Presidential election and the Federal Reserve cut the federal fund rates by another 25 basis points. U.S. banks and fintech companies also reported their third-quarter results (for some reason many decided to report early).

There were two notable stock market moves when Trump was declared the winner: Coinbase and Discover. Coinbase's stock price surged by 31% in a single day, while Discover, which is currently in the process of merging with Capital One, saw a 21% increase. The moves signaled investor optimism for crypto and the expectations for large M&A deals to succeed under Trump’s presidency.

These moves also covered quite bleak third-quarter earnings results, with many companies missing analysts' estimates. The misses were mostly minor and likely reflect that Wall Street has finally set high expectations for fintech companies. The TWIF Index is up 58.8% YTD, and "fintech is back" has become the consensus. Where do we go from here?

Jevgenijs
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