Two of the biggest winners since the depths of the Great Recession may now be sending warning flags to investors.
Matt Maley, chief market strategist at Miller Tabak, says Mastercard and Visa — which have risen 1,648% and 1,147% since the March 6, 2009, low — may act as a crystal ball for Wall Street and the economy.
"These two stocks are very, very important to the consumer, and the consumer is 70% of our economy, and the problem is of course they've started to roll over a little bit," Maley said on CNBC's "Trading Nation" on Wednesday. "Look at the long-term charts on these names — Visa, it's slightly above its trend line going all the way back to the crisis lows, and Mastercard is slightly below its long-term trend line."
The question now, says Maley, is whether they can bounce off that trend line or break meaningfully below it.
"If it does [break below], that's going to be a problem signal for the consumer, which of course will not be good for the economy," said Maley. "On a short-term basis, you look at the charts and they have both broken down. You see Visa and Mastercard have broken down below their recent upward trending trend channel."
"If we see more weakness it's going to be definitely a warning signal not only for the consumer but for the market overall," Maley said.
The fundamentals on these stocks are too cloudy in the near term, says Michael Bapis, managing director at Vios Advisors at Rockefeller Capital Management. However, there could be hope on a longer time frame.
"Fundamentals near term are gone and they may even be reset forever — how we value stocks, how we value companies. But the consumer demand will drive these names and I don't think the consumer demand is over. I think it's more of the opposite, I think as soon as we are back on our feet, as soon as our society is functioning in a more normalized way, this demand will move in a straight up direction," Bapis said during the same segment.
Mastercard is due to report quarterly earnings Wednesday and Visa the next day. Mastercard is expected to report a 2% drop in profit; Visa a 3% increase.
"These are the best credit card companies out there. Along with maybe American Express and Discover, you really don't have anywhere else to go. And as soon as the consumer starts coming back, starts traveling, companies are purchasing inventory that they are needing for their demand — to meet the demand, I think you'll see these names lead the recovery," said Bapis.
Disclosure: Vios Advisors holds Mastercard and Visa.