US GDP growth for Q1 revised higher to 1.4% as expected

The U.S. real gross domestic product (GDP) growth in the first quarter of 2024 was revised up by 0.1 ppts to an annual rate of 1.4 percent in its final estimate, the Commerce Department reported on Thursday. Personal consumption expenditure, which accounts for about 70% of the US economy, increased by 2.0%, down by 0.5 ppt from the previous estimate. The growth rate of non-residential fixed investment, which reflects the business investment situation, has been revised up by 0.4 ppt to 3.3%. Inventories has taken out 0.45 percentage points out of GDP growth, and net exports of goods and services dragged growth down another 0.89 percentage points.

In May, the US personal consumption expenditure price index (PCE) remained unchanged from the previous month, compared to the previous value of 0.3%, the lowest since November 2023. The PCE price index increased by 2.6% YoY, lower than the previous value of 2.7%. The U.S. core PCE index, which excludes food and energy prices, rose 0.1% MoM in May, the lowest since December 2023. The core PCE index increased by 2.6% YoY, down from 2.8% in the previous month, the lowest since March 2021. In terms of the US stock market, the S&P 500 index maintains a stable upward trend, and we expect the S&P 500 index to fluctuate between 5,300-5,600 points.

In terms of industry, the digital payment industry is improving gradually as consumption recovers and travel is back on the agenda. Investors can pay attention to relevant leading companies.

Mastercard(MA.US)Net revenue increased by 10% YoY,powered by healthy consumer spending and strong cross-border volume growth of 18% YoY. In terms of business segment, payment network net revenue increased 7%. Value-added services and solutions net revenue increased 16%, driven primarily by strong growth in continued demand for the consulting and marketing services, loyalty solutions and fraud and security capabilities.

Worldwide gross dollar volume (GDV) increased by 10% YoY. In the U.S., GDV increased by 6%, while outside of the U.S., volume increased 13%. Overall, cross-border volume increased 18% globally for the quarter, reflecting continued strong growth in travel spending. Switch transactions grew 13% YoY in Q1. As of March 31, 2024, the Company had issued 3.4 billion Mastercard and Maestro branded cards, up 8% YoY. With healthy consumer spending and higher value-added services and solutions growth, the Mgt remained positive about the FY24 outlook and expected net revenue to grow at a low double-digit range. It is recommended to buy at US$424.00, target at US$494.00, and stop loss at US$407.00.

Visa(V.US) delivered strong results in 2Q24, with both net revenue and net income up 10%. In terms of business segment, Service revenue grew 7% YoY versus the 8% growth in Q1. Data processing revenue grew 12%. International transaction revenue was up 9%, while other revenue grew 37%, primarily driven by strong consulting and marketing services.

Overall payments volume grew 8% YoY, consistent with Q1 growth. As consumer spending across all segments from low to high spend have remained relatively stable, US payment volume grew 6% YoY. International payments volume grew 11%. Payments volume growth rates were strong for the quarter in most major regions, with Latin America, CEMEA, and Europe ex-UK, each growing more than 19% YoY. Cross-border volume excluding intra-Europe rose 16% YoY, generally in line with expectations. Processed transactions grew 11%.
It is recommended to buy at US$255.00, target at US$297.00, and stop loss at US$245.00.