Visitor spending per-capita decreased to MOP1,527, a 5% year-over-year change for the second quarter.  Mainland visitors spent the most, spending MOP3,564 per capita, while those from Taiwan, South East Asia, and Hong Kong, spent MOP1,705, MOP1,684, and MOP1,112 respectively per capita. 


Compared with the second quarter of 2008, per-capita spending of tourists dropped by 12% to MOP2,088, while that of same-day visitors rose by 2% to MOP471.

Another AIG Outrage or Bargain? New CEO Gets $7M Salary


MPEL's City of Dreams beaches a whale.



We're hearing that a jumbo jet belonging to the royal family of the United Arab Emirates was parked in the Macau airport this weekend.  We're pretty sure that a member(s) of the family was staying at MPEL's City of Dreams (CoD).  VIP volumes should look strong again at CoD in August and, hopefully, revenues will as well.

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August started out strong and keeps getting stronger. Visitors are pouring into Macau from HK, Venetian may have had its best weekend ever, and the junkets are playing lucky.



Another set of positive nuggets emerging from Macau:

  • Huge weekend in Macau
  • Hong Kong providing a lot of the visitation
  • August has been strong thus far but is getting even stronger
  • Venetian may have had its best weekend ever
  • Junkets holding very high so far in August


Our sources in Macau indicate that visitation this weekend was off the charts, on top of an already strong August.  The casino floors were packed all weekend.  The event calendar was strong - as usual recently - including Linkin Park performing at Venetian.  Venetian may have had its best weekend ever.  It seems that incremental visitation is coming from Hong Kong residents, who don't face visa restrictions, and mainland Chinese tour groups.  Anecdotally, August VIP volume was solid but more importantly, junket hold has been through the ceiling.  Volume may have been boosted by the visit royal family from United Arab Emirates as one of their jumbo jets was parked at the airport.  


Obviously, the recent surge in volume is a big positive for LVS, MPEL, and WYNN.  The August numbers look even better considering that August of 2008 was a very strong month (see chart below).  Comps ease considerably beginning in September which should make it easy for Macau to continue the positive momentum.




The annualized 3.7% Q2 GDP growth level may have lifted the world’s second largest economy out of recession according to technical definitions, but if the resulting 3% Nikkei selloff is any indication domestic investors don’t see any catalyst for growth on the horizon even if a bottom has been reached.  


A quick scan of the Cabinet office data shows that government spending has been a primary, if not the sole, driving factor in the rebound. In the chart below the 4Q moving average of estimated public demand is juxtaposed against the 4Q MA annualized GDP rate: While public spending has not yet reflated to the levels seen at the peak during the start of the decade, the trend is clear. With Public debt reaching nearly 200% of 2008 GDP, any additional spending (and keep in mind that a victory by the opposition Democratic Party at month end is expected to INCREASE government spending programs) adds crushing incremental principal to a balance that is only manageable due its zero rate/domestic creditor construct.




We have remained bearish on future prospects for the Japanese economy since opening our doors, and I have often compared it to a man treading water with a bowling ball in his hands. We are currently short the Japanese equity market via the EWJ ETF, but we reserve the right to opportunistically book profits as we head into the final phase of the election: even in a country with as many problems as Japan, optimistic euphoria can take hold when a new government takes office with a fresh mandate.  If we take history as our guide however, the euphoria won’t last if the new boss can't deliver.



Andrew Barber



Malcolm Knapp provides regional performance data on a monthly lag basis relative to the overall sales and traffic results.  This morning we got the July numbers for sales and traffic, which were just bad (-8.4% and -7.7% respectively).  On a regional basis, in June, Texas shifted into the group of regions that performed worse than the national average, which was -7.6%.  New England, on the other hand, performed better or equal to the national average.  I only point this out because Texas has performed better than the average while New England has underperformed for most of 2008 and year-to-date as tracked by Malcolm Knapp.  Both TAST and TXRH highlighted on their 2Q earnings calls this softening of trends in Texas in June.


Other regional shifts include both Florida and the South Atlantic which have been outperforming the national average in recent months after consistently underperforming in 2008 and early 2009.  Granted, all of the regions posted negative numbers and the spread between the best and worst performing regions of 4.7% has actually narrowed from 7.1% in May and 5.4% in April. 


The chart below shows casual dining restaurants’ exposure to the better and worse performing regions of the U.S. relative to the national average from a comparable sales growth perspective in June.  CHUX, RT and SNS have over 90% restaurant base exposure to the regions that performed better than or equal to the average in June.



Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.46%
  • SHORT SIGNALS 78.35%