Unlike other credit card companies that have reported earnings thus far in the fourth quarter (namely Capital One (COF) and American Express (AXP)) MasterCard (MA) easily surpassed the Street’s expectations as a result higher gross dollar volume and transactions, and was supported by strong international sales (see conference call transcript). This is the sixth consecutive quarter MA has topped estimates. Behind Visa, MasterCard is the second leading credit card processor. The distinction of processor is important since MasterCard, and Visa alike, earns profits from charging customers transaction related fees. MasterCard has not suffered the same fate as banks and financial institutions because it is not so exposed to rising defaults among customers, nor is it accruing millions in loan loss reserves. We would still be buyers of the stock despite the large move today as the U.S. economy, despite being slower, is expected to avoid a recession, and coupled with strong international gross dollar volume growth, the future looks strong for MA.

The first level of resistance for shares of MA is at $210.00; if the stock can break through there, it has room to move to $220.00 and then set a new all-time high above $227. On the downside, if $210.00 can not be broken, it has room to fall back to $200.00 and then $170.00.

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 16 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories.