We’ve got the numbers for the first half or so of the month and they’re not pretty.  Despite the favorable calendar shift of Chinese New Year (CNY) into February this year, Macau gross gaming revenues (GGR), could actually fall YoY.  With 17 days in the bag, we’re now projecting February GGR of $23.0-24.5 billion which would represent growth of -2% to +4%.  These soft results have to be a disappointment to the Macau bulls who had been calling the market as essentially impervious to the smoking ban and the junket crackdown by the Chinese government.


So why are the numbers so weak?  Last February was actually quite a strong month with volumes higher than January despite CNY falling in January.  We believe the smoking ban may have been more impactful on table productivity during the busy CNY period.  We’ve also heard that VIP hold may have been a little low although there is no hard evidence of that.  Finally and most importantly, we think there is a government crackdown on corruption in China which is impacting the junkets.  Some specific junkets may be targeted.  We found this article interesting and relevant:




In terms of market share, Wynn is making a surprising breakout although most of it is likely hold related and comes at the expense of MPEL.  Sands China is having a strong month and we expect that trend to continue absent any hold fluctuations.  Galaxy’s market share is back up after a few disappointing months while MGM and SJM are posting shares below trend. 


Following the disappointing last half of January and February’s results so far, we believe Q1 estimates could be at risk.  However, while we fully expected the junket crackdown to have a material impact on Macau’s VIP numbers, we maintain our belief that the impact will be short lived, 2-3 months.  Our best guess is that the crackdown, while real, is window dressing to show the populace that the new government is serious about combating corruption.



Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more