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Investing.com -- Visa and Mastercard (NYSE:MA) have fallen about 5% each in the past month, even as the S&P 500 gained roughly 4%, and analysts at Morgan Stanley (NYSE:MS) say two forces are largely to blame for the stumble.
1. Money moving into bank stocks
Morgan Stanley’s trading analysis shows the card networks’ shares typically weaken when U.S. banks rally, because portfolio managers often fund higher‑beta financial bets by trimming Visa (NYSE:V) and Mastercard.
The pattern has resurfaced: the Dow Jones U.S. Banks Index is up about 8% over the same four‑week span, helped by improving capital‑market sentiment and clearer rules for lenders.
When bank momentum cools, the brokerage expects the payments giants to regain ground.
2. Stable‑coin excitement
Rising interest in blockchain‑based “stablecoins” particularly USD‑pegged tokens that could settle transactions without card networks has added headline pressure, the analysts wrote.
They argue the threat is overstated for now, but acknowledge that recent product launches and legislative moves have diverted some investor attention away from traditional rails.
Despite the near‑term drag, Morgan Stanley kept Overweight ratings on both stocks on resilient consumer spending, steady cross‑border travel and growing revenue from value‑added services.
The broker sees the current pullback as a chance to build positions ahead of what it forecasts as double‑digit earnings growth.
Visa is up 1.1% at $353.48 in midday trade.
The brokerage cautioned that narrative‑driven swings might persist in the short run, but said past cycles suggest Visa and Mastercard tend to bounce once the rotation into bank names fades or new payments fears prove overdone.