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Why Mastercard Jumped 14.1% in December

Why Mastercard Jumped 14.1% in December
Written by publishing team

What happened

Master Card Credit Card (NYSE: MSc) Shares were strong in December, up 14.1%, according to S&P Global Market Intelligence.

For the month, payment processor performance outperformed Standard & Poor’s 500 The index rose by 5.6% in December. For the year, though, Mastercard barely finished in the black, up 1.2%, while the S&P 500 rose 26.9%.

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so what

The past year has been difficult for MasterCard, particularly during November, when its stock price fell about 17% over the last two weeks of the month due to a combination of concerns about how inflation, supply chain issues and the Omicron virus variant might play out. Impact on the economy and holiday spending. The arrow might have been dragged down too AmazonThe decision to discontinue admission Visa Credit cards issued in the UK due to high transaction fees – although Mastercard has nothing to do with these cards.

But MasterCard did better in December, as fears of spending less vacation time proved unfounded. In fact, according to Mastercard’s SpendingPulse survey, spending is up 8.5% this holiday season compared to last year and 10.7% compared to 2019. Online sales are up 11% year over year and 61.4% compared to 2019. The higher spending has helped That’s a strong 2021 Mastercard finish.

What now

Mastercard stock had one of its toughest years in a decade in 2021, with shares up just 1.2% over the year. Only thanks to the December bounce was it able to avoid its first negative annual return since 2010.

The company faces increasing competition from payment companies, digital wallets, and buy-now-pay-later (BNPL) service providers, but it is adapting. Last year, it launched Mastercard Installments, a BNPL service, and formed a partnership with fintech breaded To provide cryptocurrency solutions on its extensive network. It also acquired Aiia to expand its open banking capabilities.

As we head into 2022, Mastercard should be in good shape. The US economy is expected to grow 3.5% as measured by GDP, although that growth may be hampered by COVID-19, inflation and other issues. Another factor to watch is travel spending, especially business travel, which has fallen a lot over the past two years but is expected to rebound by 37% in 2022.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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