VISA REFRESHER

It seems that once a month someone spreads the rumor that Beijing is loosening the strings. We've said it before but Beijing is always tinkering but never fully opening or closing the spigot.

As can be seen in the following chart, it didn't take long for Beijing to stabilize the Mass Market.  Beijing began controlling the border in June of 2008 and by September Mass Market revenue growth was reduced to 5%.  From September to the present, growth was consistently in the range of +9% to -5%.  We don't have the data but our guess is the volume was even more stable.  I'd say the Beijing powers are quick learners.

VISA REFRESHER - macau mass market rev

It has been my belief that Beijing is interested in keeping Macau growth consistent with the growth in China GDP; that is, mid to high single digits.  The evidence certainly bears that out.  This is good and bad for the operators.  Certainly, over the long-term, this kind of stability warrants a high valuation in terms of cash flow multiples.  Unlike most gaming markets there is excess demand for Macau and Beijing is the stabilizer.  The downside is more near-term.  As Macau approaches a 6 month period of 25%+ Mass table supply growth beginning in December, same store revenue will plummet.  It is unlikely that Beijing is targeting mid to high single digit same store growth for Macau.

So don't believe the rumors that Beijing is somehow going to completely pull its big finger off the big hole in the dike to Macau.  Moderation is the likely goal here and to date, Beijing has succeeded.


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more