US Fintech Weekly: Fiserv Bounces Post-Earnings, Crypto Brokers Suffer, And Federal Agencies Prepare Innovation Guidelines

• Fiserv (FISV) rallied more than 25% so far this week after a better-than-feared third-quarter earnings print and the resumption of its $500 million share buyback plan.
• Visa and Mastercard were on track to end their fifth consecutive week higher, extending previous week’s gains on robust earnings. 
• Robinhood Markets and Coinbase Global navigated short-term volume shifts as federal financial oversight agencies approached an impending mid-November deadline to enact new fintech innovation policies. 

Domestic card networks, merchant payment processors and financing firms experienced positive sentiment so far this week, extending the previous week’s gains following strong quarterly earnings prints, while a Democratic sweep has raised the debate around the Federal Reserve’s independence. 

Investors and economists are looking at the Democratic sweep as fortifying the Federal Reserve’s independence from presidential influence, as Senate oversight of central bank nominations creates a significant barrier.

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However, it is also seen as an overhang for Fed chairman Kevin Warsh, given that key oversight committees will be in Democratic hands. The Senate Banking Committee's new chair will likely be Democratic Senator Elizabeth Warren of Massachusetts, a harsh Warsh critic, replacing Trump ally and Warsh supporter Tim Scott of South Carolina, Reuters reported.

Infrastructure Shifts Across Mastercard, Visa And Fiserv

Mastercard (MA): The payment company’s shares were on course to end their fifth consecutive week higher, if gains hold until Friday. The stock extended previous week’s gains, as its Q3 financial results topped consensus earnings-per-share estimates, bolstered by resilient cross-border consumer transaction volume and expanding commercial payment rails.  

MA stock gained about 3% at the end of trading on Thursday this week. 

Visa (V): Visa stock too was on track for its fifth straight week higher, extending gains from last week’s earnings. Meanwhile, Cantor Fitzgerald raised the firm's price target to $500 from $445 this week and maintained an ‘overweight’ rating on the shares. 

Fiserv (FISV): Shares of Fiserv staged a sharp recovery, surging nearly 13% on Nov. 3 to trade above $62.00. Investors rallied around an encouraging bottom-line beat, a new $500 million fourth-quarter share buyback authorization, and Barclays raising its price target to $59.00. 

Robinhood, Coinbase Set For Weekly Declines Following Democratic Sweep

Robinhood Markets (HOOD) and Coinbase (COIN) both retreated during Thursday's session and were on track to end their sixth consecutive week lower as Bitcoin pulled back following a clean Democratic sweep in the mid-term elections. 

Democratic control across Capitol Hill creates new policy headwinds for sector-friendly reforms and is likely to intensify regulatory oversight of digital asset platforms. “Consolidation or a decline shortly before the elections was followed by steady growth for weeks once the situation became clearer,” Alex Kuptsikevich, chief market analyst at FxPro, told Bloomberg.

“The latest surge suggests that markets are not particularly afraid of the Democrats, only of uncertainty.” 

However, another set of analysts were of the opinion that while a Democratic government will behave as an overhang on cryptocurrencies, the effects will be limited. “Bitcoin is now far more embedded in the traditional financial system than in past cycles, with banks, asset managers, and the ETFs invested which makes a change in Washington less of a threat than it would have been a few years ago,” analysts at Glassnode wrote in a research note published by Bloomberg. 

Federal Rules And Legal Updates 

Nov. 15 Federal Agency Innovation Deadline Approaches: Six federal regulatory bodies—including the Consumer Financial Protection Bureau (CFPB), Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA)—are finalizing public implementation steps to reduce regulatory friction and encourage fintech innovation.

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