Signals

Signals: it's been a good year for public fintech companies

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!

September was a quiet month. It's one of those "off-season" months when companies have completed reporting their previous quarter and are focused on delivering great results for the upcoming earnings season. So the most notable event of the month was the Federal Reserve (finally) cutting the fed funds rate by 50 basis points. Investors now expect an additional 50 basis points cut by year-end.

There were winners from high interest rates. Think of Rohinhood earning interest on uninvested customer balances or Coinbase earnings interest on USDC reserves. There were also losers from high interest rates. Think of fintech lenders that faced frozen securitization markets and higher cost of funding. This earnings season, which was kicked off by JPMorgan last Friday, we will start hearing more about how all these fintech companies plan to grow when the rates normalize.

In the meantime, the TWIF Index is up 40% YTD, compared to roughly +22% for both, the S&P 500 and Nasdaq Composite. It's been a good year for fintech companies, and perhaps, the market, which is always forward-looking, tells us that their future looks bright too.

Jevgenijs
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