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Payments Giant MasterCard (NYSE:MY) has just announced its results for the second quarter of 2022. The implications, however, could extend beyond the company’s finances. While shareholders are no doubt happy MA shares turned positive this morning, Mastercard’s data may actually indicate that the US economy is on solid footing.
Suffice it to say, Mastercard faces many challenges in 2022. Of course, high inflation is a problem as it dampens spending activity. On top of that, some US senators are preparing a bill targeting certain credit card charges. If the bill becomes law, it could negatively impact Mastercard’s results.
For now, however, it looks like Mastercard’s bottom line is intact. For the second quarter of 2022, it reported diluted earnings per share, or EPS, of $2.34. That showed an improvement from the $2.08 per share in the prior year quarter.
Additionally, Mastercard reported revenue of $5.5 billion in the second quarter of 2022, showing progress from $4.5 billion in the prior quarter. The result also beat Wall Street’s forecast of $5.3 billion.
What this means for MA Stock and the economy
The real highlight of the earnings report, however, was Mastercard’s cross-border transaction volume growth of 58%. Mastercard CEO Michael Miebach pointed to this stat, and who could blame him? This suggests that people are traveling and spending, and despite high inflation, the economy may be stronger than it looks.
Let’s not jump to conclusions here. Mastercard’s impressive results don’t necessarily mean the US isn’t in a recession. At the very least, however, they are a testament to Mastercard’s resilience despite tough market conditions.
So, it shouldn’t come as too much of a surprise that MA stock rose in early trading today. It was up 1% or less, but any gain is no doubt welcome among Mastercard investors these days.
The stock is still down year-to-date, after all. Additionally, Mastercard may have to contend with the aforementioned bill in Congress. Really, it’s too early to tell how Mastercard and the broader economy will fare in the second half of 2022. At least today, though, investors are seeing some positive signs.
As of the date of publication, David Moadel had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.