Core Viewpoint - The financial sector, particularly credit card issuers, is currently experiencing stock price declines despite potential long-term profitability due to proposed regulatory changes on interest rates [2][8]. Group 1: Impact of Proposed Interest Rate Cap - President Trump proposed a one-year, 10% cap on credit card interest rates, effective January 20, which has led to significant declines in stock prices of major credit card issuers [2][3]. - Major credit card issuers such as Bank of America, JPMorgan Chase, American Express, Capital One Financial, and Citigroup saw stock declines ranging from 4.5% to 9.9% following the announcement [9]. - Payment networks Visa and Mastercard also experienced stock drops of 8% and 6.9%, respectively, indicating a broader impact on the financial sector [4]. Group 2: Historical Context and Legislative Challenges - Previous attempts to cap credit card interest rates have failed, with a similar proposal by Senator Bernie Sanders stalling in Congress last year [5][6]. - The financial industry is expected to strongly oppose the current proposal, suggesting that it is unlikely to be enacted [6][7]. - Analysts predict that the banking industry will effectively counter this proposal before it gains traction [7].

Core Insights - Investors are encouraged by recent earnings reports from Verizon and American Express, with Verizon raising earnings guidance for the latter half of 2025 and American Express achieving record second-quarter revenue [1][2] Group 1: Verizon - Verizon has raised its dividend payout for 18 consecutive years, currently offering a 6.3% dividend yield, although the quarterly payment has only increased by 19.9% over the past decade [4][6] - The wireless service revenue grew by 2.2% year-over-year, while broadband connections increased by 12.2% to 12.9 million [5] - Free cash flow is projected to reach $4.74 per share in 2025, sufficient to cover the current annual dividend obligation of $2.71 [6] Group 2: American Express - American Express has a lower dividend yield of 1.1% but has increased its payout by 17% earlier this year, with a total increase of 183% over the past decade [7][8] - The company has reduced its share count by 29.4% over the last ten years, facilitating easier management of future payout increases [8] - American Express is positioned to benefit from steady growth as one of four global credit card networks, with recent initiatives like the Coinbase One Card enhancing its competitive stance [10][11] Group 3: Investment Considerations - The choice between Verizon and American Express depends on the investor's time horizon; American Express offers strong historical growth but a low current yield, while Verizon provides a higher yield with slower growth [12][13] - Projecting future yields, American Express could yield around 3.6% by 2045, while Verizon could yield 9.1% by the same year, making Verizon potentially more attractive for income-seeking investors [12][14]