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SINGAPORE Q4 WAS ONE TO FORGET

Singapore contracts in Q4. Here is the growth and market share breakdown. 

 

 

Market trends

  • Singapore gross gaming revenues declined 12% YoY in Q4 2013 to S$1.7 BN.  Adjusting for hold (based on average since inception of 2.80%) for both periods, GGR still slumped 9% YoY.
  • Market VIP rolling chip volume shrank 7% YoY in 4Q, snapping 4 quarters of high double digit gains  
  • Mass revenue fell again in Q4, -6% YoY, the 2nd consecutive quarterly decline
  • Net non-gaming revenue fell 8% YoY in Q4, the 1st decline since 3Q 2012

Market shares

  • MBS GGR share is in-line with the 3 year average but below recent trends 
  • Volume share was consistent in Q4 relative to Q3 with MBS holding 47% of VIP rolling chip share and 57% of mass table volume share
  • MBS's mass table revenue share rose 2% points sequentially to 59% due to higher mass hold and volumes
  • MBS's slot revenue share was unchanged sequentially in Q4

* Blue trend lines in the charts below are from MBS's perspective

 

SINGAPORE Q4 WAS ONE TO FORGET - 1

 

SINGAPORE Q4 WAS ONE TO FORGET - 2

 

SINGAPORE Q4 WAS ONE TO FORGET - 33

 

SINGAPORE Q4 WAS ONE TO FORGET - 4

 

SINGAPORE Q4 WAS ONE TO FORGET - 5

 

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SINGAPORE Q4 WAS ONE TO FORGET - 7



Your House

“We live in a house, and therefore we consume the house.”

-John Allison

 

Yep, I am Canadian.

 

I lived in a Canadian house until I was 24 years old and have the flag tattooed on my back. Consequently, I will be consumed by my confirmation bias today as Canada’s men try to beat America’s like our women did yesterday.

 

Your House - boom

 

Don’t worry, I’m not competitive or anything. When my all-American wife (Laura in Lacrosse) wasn’t looking one day, I hung a massive Canadian flag over my son Jack’s bed. As he was sleeping, I subliminally got him in the mind!

 

Admittedly, I have started to teach all 3 of my children that the USA is the best in the world, at creating asset bubbles. Just like John Allison does in the aforementioned quote about real-world economics, I have to call it like it is.

 

Back to the Global Macro Grind

 

“In economic terms, spending on housing is consumption, not investment… houses are not used to produce other goods… thus the misinvestment in housing in housing shifted resources from production to consumption.” –John Allison (pg 8)

 

No, “misinvestment” isn’t a word that spell-checks inasmuch as “misinformation” did for a Canadian hockey player (me) in the mid-1990s when it was introduced to me by one of the great leaders in my life (former US Olympic Hockey Coach, Tim Taylor).

 

“Mucker, you don’t really have any moves… so you need to start waggling the blade of your stick when you are carrying the puck up ice to give the defense some misinformation.” –Tim Taylor

 

Try it – it works!

 

Longer-term, an un-elected central planning bureau (The Fed) forcing investors to chase short-term price inflations (and “yields”) to all-time bubble highs won’t work. Anyone who didn’t sleep through the deflation of asset prices in 2008 will get that.

 

I had a lot of feedback on John Allison’s “fundamental themes” yesterday (mainly because I left 3 of his top 6 out). They are:

 

1.       “Individual financial Institutions (#OldWall) made very serious mistakes that contributed to the crisis
2.       “The deeper causes of our financial challenges are philosophical, not economic”
3.       “If we don’t change direction soon, the United States will be in very serious financial trouble in 20-25 years”

 

In other words, the government (and The Federal Reserve) created policies based on academic ideologies (weak currency “boosts exports”, cheap money “boosts housing”, etc) that are A) very short term in nature and B) misaligned with making long-term investments in productive, job generating, assets.

 

Newsflash: Gold is the least productive major “asset class” in the world – so it loves #InflationAccelerating-slow-growth government policies to fix prices (rates and wages) and devalue the purchasing power of The People in exchange for debt.

 

The Canada vs. USA score won’t lie today. Neither will the misinvestment, misinformation, or misalignment of the US stock market’s YTD score vs. economic reality (after torching their currencies, Venezuela was +460% last yr and Argentina is +10% YTD).

 

If you peel back the -0.5% and +9.5% YTD returns of the SP500 and Gold, respectively, and look at the S&P’s Sector Returns:

  1. Slow-growth-yield chasing Utilities (XLU) lead the charge at +6.7% YTD
  2. Consumer Sectors (XLY and XLP) lead losers at -2.6% and -3.0% YTD, respectively
  3. Interest Rate Sensitive Financials (XLF) are underperforming the SP500 at -1.9% YTD

#InflationAccelerating A) slows consumption growth (hurts consumer stocks) and B) encourages investors to chase “yield.” That’s why the Financials (XLF) suck relative to Utilities (XLU) this year inasmuch as they did at the start of 2011.

 

Put another way, as the Financials, Rates, and the US Dollar go, so will real-economic growth in America. The only modern periods of sustainable US economic growth (i.e. greater than 4% GDP) came in the 1 (Reagan) and 1 (Clinton) years. You saw a sneak preview of interest rates and the US Dollar breaking out to the upside in Q3 of 2013 too (US GDP ramped to +4.12%).

 

That wasn’t my house versus your house. That wasn’t Canada vs. the USA either. That’s how real-world economics works. The only misinformation about it in the US, Japan, Venezuela, etc. today is in how governments and their central-planning-access starved media group-thinkers sell it to you. From a free market capitalist perspective, it’s so very un-American.

 

Our immediate-term Macro Risk Ranges are now:

 

SPX 1811-1848

Nikkei 14124-14966

VIX 13.31-15.98

USD 79.91-80.55

Pound 1.65-1.67

Gold 1

 

Best of luck to both Team Canada and Team USA today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Your House - Chart of the Day

 

Your House - Virtual Portfolio


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February 21, 2014

February 21, 2014 - 1 

BULLISH TRENDS

February 21, 2014 - Slide2

February 21, 2014 - Slide3

February 21, 2014 - Slide4

February 21, 2014 - Slide5

February 21, 2014 - Slide6

February 21, 2014 - Slide7

February 21, 2014 - Slide8

February 21, 2014 - Slide9 

BEARISH TRENDS

February 21, 2014 - Slide10

February 21, 2014 - Slide11
February 21, 2014 - Slide12


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 21, 2014


As we look at today's setup for the S&P 500, the range is 37 points or 1.56% downside to 1811 and 0.45% upside to 1848.                                         

                                                                                      

SECTOR PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

EQUITY SENTIMENT:

 

THE HEDGEYE DAILY OUTLOOK - 10                                                                                                                                                                  

 

CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 2.44 from 2.43
  • VIX closed at 14.79 1 day percent change of -4.58%

MACRO DATA POINTS (Bloomberg Estimates):

  • 10am: Existing Home Sales benchmark revisions
  • 10am: Existing Home Sales, Jan., est. 4.68m (prior 4.87m)
  • 10am: Existing Home Sales m/m, Jan., est. -3.9% (prior 1%)
  • 1pm: Baker Hughes rig count
  • 1:10pm: Fed’s Bullard speaks on economy in St. Louis, Mo.
  • 1:45pm: Fed’s Fisher speaks in Austin, Texas

GOVERNMENT:

    • 8am: Govs. Peter Shumlin, D-Vt.; Bill Haslam, R-Tenn., Jay Nixon, D-Mo.; Sam Brownback, R-Kan.; speak at Microsoft, Politico State Solutions Conference
    • 8:45am SEC Chair Mary Jo White  keynote at Practicing Law Institute conf.

WHAT TO WATCH:

  • G-20 to push growth as stimulus withdrawal backed, draft shows
  • Verizon sale cuts Vodafone’s value by half to $100b
  • NYSE joins funds seeking to end “maker-taker” trading rebates
  • High-speed traders lose direct access to Buffett’s Bus. Wire
  • Ukraine to sign accord to end crisis after deadliest protests
  • Ukraine default likely as political crisis deepens: S&P
  • WhatsApp free texting seen siphoning $33b from carriers
  • Proposed FY15 Medicare Adv rates may be released today: BI
  • RBS to shrink investment banking with 30,000 job cuts: FT
  • DuPont seed deliveries slowed as Ukraine violence increases
  • Dimon won’t face another investor vote on his 2 JPMorgan roles
  • Bitcoin offer prices slump on Mt.Gox as withdrawals suspended
  • Energy Future may split up, seeks two $4b loans for units: WSJ
  • Ford aims to sell more than 1m vehicles in China: WSJ
  • Valeo 2H earns rise on car demand in China, North America
  • Gucci posts slowest sales growth in 4 years amid tourism lull
  • Teva, Takeda, Merck may receive EMA opinions today
  • U.S. Treasuries remain good investment choice for China: Daily
  • U.S. GDP, G-20, Italy’s New Leader: Week Ahead Feb. 22-March 1

EARNINGS:

    • Ameren (AEE) 7:50am, $0.13
    • Barnes Group (B)  6:30am, $0.52
    • Boise Cascade (BCC)  8:45am, $0.19
    • Charter Communications (CHTR)  8am, $0.13
    • Dish Network (DISH)  6am, $0.41 - Preview
    • Donaldson (DCI)  7am, $0.45
    • EchoStar (SATS)  6am, ($0.08)
    • Ecolab (ECL) 8:20am, $1.05
    • Eldorado Gold (ELD CN)  7am, $0.36
    • Enerplus (ERF CN)  6am, $0.10 - Preview
    • First Capital Realty (FCR CN)  7am, C$0.05
    • Pinnacle West Capital (PNW)  8:30am, $0.19
    • Starz (STRZA) 7:30am, $0.45

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • WTI Set for Weekly Gain on U.S. Cold; Brent Poised for Advance
  • Gold Holds Below 15-Week High as Fed Cuts Weighed Against Data
  • Soybeans Steady Near Five-Month High After USDA Planting Outlook
  • Natural Gas Nears Biggest Weekly Gain Since 2010 as Cold Returns
  • China LNG Imports Rise to Record for Second Month on New Plants
  • Brazil Coffee Growers Seen Making ‘Big’ Sales as Futures Rally
  • China’s Corn Imports Drop as Inspectors Reject GMO-Tainted Grain
  • Coffee, Sugar Rebound as Funds Buying on Brazil Dryness Concerns
  • Gold Traders Split as Fed Stimulus Weighed Against Weaker Data
  • Rusal Sees Aluminum Deficit Driving Delivery Premium to 50%
  • Vicious Cycle Seen as Ore Pile Evokes Steel Bust: China Credit
  • Noble’s 15-Year, $500 Million Gas Deal Affirms Export Market
  • Iron Ore Sentiment Is Again Bearish as China Decline on Horizon
  • U.S. Soybean Inventories Seen Rising in 2015 on Record Crop

THE HEDGEYE DAILY OUTLOOK - 5

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - 6

 

GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 3

 

THE HEDGEYE DAILY OUTLOOK - 4

 

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 7

 

ASIAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 8

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - 9

 

 

The Hedgeye Macro Team

 

 

 

 

 

 

 

 

 

 

 

 

 


Beast Mode

This note was originally published at 8am on February 07, 2014 for Hedgeye subscribers.

“I’m just about that action, boss.”

-Marshawn Lynch

 

Admittedly, being from Canada, I didn’t grow up a huge football fan.  But like most of the world, I am drawn to the Super Bowl.  This year was set up to be a dandy with the best offense facing the best defense.  As we now know, the game was not even close with Seattle beating Denver like a rented mule.

 

Despite the lopsided game, there were a number of characters off the field that garnered a fair amount of attention.  In my view, the most interesting character to emerge was Seattle running back Marshawn Lynch, who is better known as Beast Mode.

 

Beast Mode - marshawn

 

Lynch is notorious for avoiding the media, so much so that the NFL fined him $50,000 earlier in the season for not going to press conferences (which Seattle fans subsequently repaid for him!).  At the Super Bowl he spent about seven minutes in a media scrum and also did a brief interview with Deion Sanders.  During these brief appearances, it became clear that Lynch wasn’t media shy per se, but wanted his actions to speak for him.  As he told Sanders:

 

Deion Sanders: What is your thing?

 

Marshawn Lynch: Laying back, kick back. (Yeah) Mind my business, stay in my own lane.

 

Deion Sanders: Yeah. So you’re just going to sit in the cut and just chill. That’s what you do.

 

Marshawn Lynch: Just kick back. Game time, though I’ll be there.”

 

True to his limited words, at game time Lynch was there and was all about the action, rather than the words beforehand.  In theory, this is probably good advice for a lot of us, even those of us who don’t play in the NFL.

 

Back to the global macro grind . . .

 

Speaking of action, many of the key global markets we monitor every day are increasingly about that price action.  Currently, the SP500, Dax and Nikkei are all broken on the TREND duration (three months or more) in our quantitative model.  Conversely, equity market volatility via the VIX and U.S. Treasury bonds are breaking out to the upside.

 

Clearly, the market is signaling that growth is poised to continue to disappoint.  In the year-to-date, the score on that front is really crystal clear.   In the Chart of the Day, we show a summary of the 34 U.S. economic indicators that we focus on.  As the table shows, 23 of those indicators slowed from December to January.  Not even the best portfolio defense is going to stop an equity market that is going down because of that kind of economic deceleration.

 

In my mind, the most disturbing recent data point was the ISM Manufacturing New Orders reading for January.  On a month-over-month basis, new orders were down -13.2, which is the largest single month decline since December 1980, or more than 30 years ago.  The economy slowed from December to January and if forward looking orders are any indicator, it is not out of the woods yet.

 

Yesterday, the weekly initial jobless claims data was released and they were largely a non-event, though even there we are seeing incremental slowing.  We key off the year-over-year rate of change in rolling NSA (non-seasonally adjusted) initial jobless claims. This week the data was better by 5.5% vs the same period last year. However, if you compare that with the preceding three weeks of data, it reflects a modest deceleration. The last four prints have been: -8.5%, -7.9%, -7.2% and -5.5%. So, yes, the strength of the labor market has cooled off modestly.

 

On the labor and employment front, the January Employment Report at 8:30am will be the main event this morning.  Currently, consensus estimates are for 180,000 jobs to be added in January.  It is also widely expected that last month’s big miss will be revised significantly higher due to weather.  So, the expectations table has been set but, as always, expectations are likely to be the root of all heartache.

 

Since the r-squared between the ADP number and non-farm payrolls on a rolling 3-month basis is 0.71, it does seem likely that we get a print of close to 180,000. This disappointment may come on the expectation of a meaningful revision upwards from December.  In fact, we did a study last month on the trend in revisions and in general over the last four years, the magnitude (and direction) of revisions hasn’t correlated particularly well with deviations from trend.  Historically, according to Bloomberg data, months in which big weather was a factor have been revised higher only ~60% of the time.

 

So, perhaps today’s employment report is highly positive and gets the market back into bullish beast mode, though the probability seems higher that today is a non-event with the potential for a mild disappointment.  But, as always, by 8:31 a.m. it is definitely going to be all about that action.

 

Speaking of action, we finally got some validation on our short thesis on Twitter yesterday as the company reported its first quarterly results as a public company.  Admittedly, revenue did beat our number (although that was obviously priced in), but Twitter showed a real deceleration in user growth and user engagement.  On that last point, user engagement, as measured by time line views, was down -3% year-over-year . . . not good for a growth company.

 

After winning the Super Bowl, Marshawn Lynch answered when asked about his touchdown run that he had:

 

“Kicked it all off, boss.”

 

Given the dramatic price decline and acceleration in volume, it will be interesting to see what Twitter kicked off yesterday. $TWTR remains on our Best Ideas list as a short.  Email us at sales@hedgeye.com if you want to review our 50+ page short report on the company.

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 2.59-2.80% (bearish)

SPX 1737-1798 (bearish)

Nikkei 13762-15159 (bearish)

VIX 14.91-20.41 (bullish)

Gold 1240-1268 (neutral)

 

Keep your head up and stick on the ice,

 

Daryl G. Jones

Director of Research

 

Beast Mode - Beast Mode 020614

 

Beast Mode - rta1


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