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Technology Stocks : Semi Equipment Analysis
SOXX 403.73+1.9%Jan 31 3:59 PM EST

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To: Return to Sender who wrote (89049)9/27/2022 4:57:23 PM
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Market Snapshot

Dow 29148.57 -114.27 (-0.39%)
Nasdaq 10815.71 +12.93 (0.12%)
SP 500 3647.25 -7.86 (-0.22%)
10-yr Note -4/32 3.96

NYSE Adv 1508 Dec 1557 Vol 1.0 bln
Nasdaq Adv 2087 Dec 2273 Vol 4.3 bln

Industry Watch
Strong: Energy, Materials, Consumer Discretionary, Information Technology

Weak: Utilities, Consumer Staples, Real Estate, Financials, Industrials, Communication Services

Moving the Market
-- S&P 500 setting new intraday low for 2022

-- Reversal in price action for currency and Treasury market

-- Mixed Fed speak for participants to digest

-- 10-yr Treasury note yield failed to breach 4.00% level

Closing Summary
27-Sep-22 16:20 ET

Dow -125.82 at 29137.02, Nasdaq +26.58 at 10829.36, S&P -7.75 at 3647.36
[BRIEFING.COM] The stock market started the day in rally mode, bouncing from oversold conditions, with the Nasdaq up 2.2% and the S&P 500 up 1.7% at this morning's highs. A drop in Treasury yields, a weaker dollar, and strong mega caps were all support factors for the rebound. Each of these support factors weakened, however, and as they did, the major indices gave up their gains and spent most of the day in negative territory. The S&P 500 set a new intraday low for 2022 (3,623.29), having fallen below the June low (3,636.87) in afternoon trade.

Moves in the stock market were largely driven by moves in the Treasury market. The 10-yr note yield sat at 3.80% before today's open, but settled the day at 3.96%. The major indices were able to lift off session lows when the 10-yr note yield failed to breach 4.00%. Still, the sharp move towards that level undercut the early rebound efforts.

Another driving factor was the roller-coaster action in the currency market. The U.S. Dollar Index traded down to 113.33 this morning, as the euro and British pound rebounded; however, that rebound effort lost steam and the U.S. Dollar Index bounced back to 114.23, up 0.1%.

Separately, the mega cap stocks were unable to hold a stronger line as well. The Vanguard Mega Cap Growth ETF (MGK), up as much as 2.2% early on, finished the session flat. The movement in the mega cap stocks had a heavy influence on the movement of the major indices.

Most of the S&P 500 sectors closed in the red with consumer staples (-1.8%) and utilities (-1.7%) bringing up the rear. On the flip side, energy (+1.2%) and consumer discretionary (+0.3%) sat atop the leaderboard.

Energy outpaced the other sectors by a sizable margin as oil prices rose. WTI crude oil futures settled up 2.8% to $78.77/bbl. Natural gas futures fell 3.1% to $6.79/mmbtu.

The advance-decline line painted a mixed picture of the market. Advancers were roughly in-line with decliners by the close at both the NYSE and Nasdaq.

There was mixed Fed speak for market participants to digest today. Chicago Fed President Evans (not an FOMC voter) acknowledged to CNBC Europe that he is a little nervous that the Fed is moving too much, too quickly, but added that he remains "cautiously optimistic" that the U.S. can avoid a recession.

In contrast, Cleveland Fed President Mester (2022 FOMC voter) said policy rates need to be at a restrictive level for longer to bring inflation down and to make sure inflation expectations do not move up. St. Louis Fed President Bullard (2022 FOMC voter) said the U.S. has a serious inflation problem and that the credibility of inflation targeting is at risk, according to Bloomberg. Minneapolis Federal Reserve Bank President Kashkari (2023 FOMC voter) said the Fed is united and will move to bring down inflation at an "appropriately aggressive" pace, according to Reuters.

Looking ahead to Wednesday, market participants will receive the following economic data:

  • 7:00 ET: Weekly MBA Mortgage Index (prior 3.8%)
  • 8:30 ET: August advance international trade in goods (prior -$89.10 bln), advance Retail Inventories (prior 1.1%), and advance Wholesale Inventories (prior 0.8%)
  • 10:00 ET: August Pending Home Sales (prior -1.0%)
  • 10:30 ET: Weekly crude oil inventories (prior +1.14 mln)
Reviewing today's economic data:

  • August Durable Orders fell 0.2% ( consensus -0.1%) following the prior revised 0.1% decrease in July (from 0.0.%). Durable Orders, Excluding Transportation rose 0.2% ( consensus 0.3%) following the prior revised 0.2% increase (from 0.3%)
    • The key takeaway from the report is that business spending held up remarkably well. That point resonated in the 1.3% month-over-month increase for nondefense capital goods orders, excluding aircraft, that came on top of a 0.7% increase in July.
  • July FHFA Housing Price Index fell 0.6% after the prior 0.1% increase in June
  • July S&P Case-Shiller Home Price Index came in at 16.1% ( consensus 17%) after the prior 18.6% reading in June
  • September Consumer Confidence Index rose to 108.0 ( consensus 105.0) from prior revised reading of 103.6 (from 103.2)
    • The key takeaway from the report is that the increase in confidence was bolstered partly by consumers' view of jobs and wages. That could be a good portent for spending, yet it won't help assuage concerns about Fed tightening given the Fed's belief that there needs to be some softening in the labor market to help temper wage-based inflation pressures.
  • New home sales surged 28.8% month-over-month in August to a seasonally adjusted annual rate of 685,000 units ( consensus 500,000) from an upwardly revised 532,000 (from 511,000) in July. On a year-over-year basis, new home sales were down 0.1%
    • The key takeaway from the report is that new home sales were much stronger than expected, aided by a sense of urgency to sign contracts as mortgage rates came down. This strength, however, is apt to be an aberration given the surge in mortgage rates that has occurred in the ensuing period.
Dow Jones Industrial Average: -19.8% YTD
S&P Midcap 400: -22.4% YTD
S&P 500: -23.5% YTD
Russell 2000: -26.0% YTD
Nasdaq Composite: -30.8 YTD

Market sticks to narrow range ahead of close
27-Sep-22 15:30 ET

Dow -132.65 at 29130.19, Nasdaq +9.35 at 10812.13, S&P -8.81 at 3646.30
[BRIEFING.COM] The stock market stuck to a narrow trading range in the last half hour, remaining off session lows.

Energy complex futures settled in mixed fashion. WTI crude oil futures rose 2.8% to $78.77/bbl while natural gas futures fell 3.1% to $6.79/mmbtu.

Looking ahead to Wednesday, market participants will receive the following economic data:

  • 7:00 ET: Weekly MBA Mortgage Index (prior 3.8%)
  • 8:30 ET: August advance international trade in goods (prior -$89.10 bln), advance Retail Inventories (prior 1.1%), and advance Wholesale Inventories (prior 0.8%)
  • 10:00 ET: August Pending Home Sales (prior -1.0%)
  • 10:30 ET: Weekly crude oil inventories (prior +1.14 mln)

Market lifts off lows
27-Sep-22 15:05 ET

Dow -114.27 at 29148.57, Nasdaq +12.93 at 10815.71, S&P -7.86 at 3647.25
[BRIEFING.COM] The stock market lifted off its lows in the last half hour. The Nasdaq pushed into positive territory.

The mega cap stocks are leading the upside moves with the Vanguard Mega Cap Growth ETF (MGK) up 0.1% versus a 0.1% loss in the Invesco S&P 500 Equal Weight ETF (RSP). The S&P 500 flirts with the flat line.

Earlier, Minneapolis Federal Reserve Bank President Kashkari (2023 voter) said the Fed is united and will move to bring down inflation at an "appropriately aggressive" pace, according to Reuters.

Keurig Dr Pepper slips after Goldman downgrade
27-Sep-22 14:25 ET

Dow -234.74 at 29028.10, Nasdaq -41.64 at 10761.14, S&P -24.47 at 3630.64
[BRIEFING.COM] The benchmark S&P 500 (-0.67%) is still in second place to this point on Tuesday.

S&P 500 constituents Digital Realty Trust (DLR 97.95, -3.83, -3.76%), Estee Lauder (EL 224.04, -8.42, -3.62%), and Keurig Dr Pepper (KDP 36.04, -1.24, -3.33%) dot the bottom of the index. Real estate names, along with DLR, generally underperform on Tuesday, while KDP slides after being downgraded to Neutral at Goldman this morning.

Meanwhile, materials firm CF Industries (CF 96.48, +6.12, +6.77%) is today's best performer despite a dearth of corporate news.

Gold slightly higher on Tuesday after hitting two-year lows
27-Sep-22 14:00 ET

Dow -267.40 at 28995.44, Nasdaq -45.00 at 10757.78, S&P -29.02 at 3626.09
[BRIEFING.COM] With about two hours to go the tech-heavy Nasdaq Composite (-0.42%) is still the "best" performing index, albeit down about 45 points.

Gold futures settled $2.80 higher (+0.2%) to $1,636.20/oz, fueled partly by ongoing recession fears and geopolitical tensions with gains kept under wraps by a modestly higher dollar.

Meanwhile, the U.S. Dollar Index is up about +0.2% to $114.30.

Last Updated: 27-Sep-22 09:02 ET | Archive
Aiming to bounce from dismal down period
The futures for the major indices are all pointing higher and by a decent amount. That's because the cash indices have all been trading lower since mid-August and by a huge amount.

Entering today, the S&P 500 has declined 15.1% and the Nasdaq Composite has dropped 17.7% since mid-August. Over the same period, the yield on the 10-yr note has risen 106 basis points to 3.85% and the U.S. Dollar Index has increased 7.1%.

One shouldn't be fooled into thinking that the upside bias in the futures market this morning is anything more than a reflection of expectations that the cash indices are due for a bounce from oversold conditions.

Currently, the S&P 500 futures are up 53 points and are trading 1.5% above fair value, the Nasdaq 100 futures are up 200 points and are trading 1.8% above fair value, and the Dow Jones Industrial Average futures are up 329 points and are trading 1.2% above fair value.

Some other changes of note registering for investors this morning include a drop in Treasury yields and a decline in the U.S. Dollar Index (-0.4% to 113.60). The 2-yr note yield is down five basis points to 4.26% and the 10-yr note yield is down three basis points to 3.85%.

Chicago Fed President Evans is garnering some attention as a possible catalyst for these shifts after acknowledging in an interview with CNBC Europe that he is a little nervous that the Fed could be raising rates too much, too quickly. Nonetheless, in the absence of further external shocks, he remains "cautiously optimistic" that the U.S. can avoid a recession.

We would argue that his influence is being overstated as a market driver because he is not an FOMC voter and he is retiring early next year. Still, for a market that has been pancaked by the idea that rates have gone up quickly, and have further to go, it is a nice thought to process following a dismal down period.

In related news, Cleveland Fed President Mester, who is an FOMC voter this year, stated that the policy rate needs to be at a restrictive level for longer to bring inflation down and to make sure inflation expectations do not move up.

This is not necessarily a new view, however. It is new in terms of its timing, but not in terms of its context. This is the position many Fed officials have been stating for some time now, which is why the stock market has been reeling for some time now.

Accordingly, it does not have shock value on a morning when market participants are riding the shock absorbers of falling Treasury yields, a weaker dollar, and a rebound in the mega-cap stocks, all of which are up at least 1.4% in pre-market trading.

A short time ago, it was learned that durable goods order were down 0.2% month-over-month in August ( consensus -0.1%) following a downwardly revised 0.1% decline (from 0.0%) in July. Excluding transportation, durable goods orders increased 0.2% month-over-month ( consensus +0.3%) following a downwardly revised 0.2% increase (from 0.3%) in July.

The key takeaway from the report is that business spending held up remarkably well. That point resonated in the 1.3% month-over-month increase for nondefense capital goods orders, excluding aircraft, that came on top of a 0.7% increase in July.

The futures market did not react much to the report, but it did not have to. It had already been reacting nicely to short-term oversold conditions that drove the S&P 500 to a new closing low for the year yesterday.

There will be a bounce from that low at today's open, but whether that bounce holds up by today's close could have a lot to do with how the Treasury market and currency market trend into today's close.

-- Patrick J. O'Hare,

Jabil caps off FY22 on a high note and expects secular trends to power decent FY23 numbers (JBL)

Jabil (JBL +1%) capped off FY22 on a high note, posting sizeable beats on its top and bottom lines in Q4 (Aug), driven by broad-based strength. More specifically, the integrated circuit manufacturer topped earnings estimates by double-digits, while boasting its best quarterly sales growth over five years at 21.9% yr/yr to $9.03 bln.

Perhaps the biggest news from Q4 was JBL's upbeat tone when discussing the current state of its business and how secular trends will power its long-term growth and margin expansion.

  • JBL, which has steadily branched out into many more end markets through its Diversified Manufacturing Services (DMS) segment, commands exceptional product and end-market diversity, which it believes will be the differentiating factor during a possible economic downturn.
    • An example is the electric vehicle (EV) market, where some premium EVs contain up to $3,000 worth of JBL components. The company expects accelerated EV adoption to drive consistent growth regardless of near-term global growth concerns.
    • The same holds true for the healthcare industry, which JBL views as a recession-resistant end market with lengthy product life cycles and stable cash flows, making it a crucial component of the company's DMS business.
  • Meanwhile, JBL's Electronic Manufacturing Services (EMS) provides a cushion of steady growth. Even though the company anticipates a slowdown in some of its consumer-focused markets in FY23 (Aug), its other end markets are amid secular tailwinds, including a shift toward cleaner and smarter energy infrastructure, continual 5G rollouts, and a move toward utilizing cloud-based services.
However, despite these optimistic viewpoints, JBL took a conservative approach to its FY23 outlook, expecting just 20 bps in core margin expansion yr/yr, 11% adjusted free cash flow growth, and 7% core EPS growth. Each of these numbers was well below the results JBL experienced in FY22. JBL's mild FY23 forecast is primarily due to its expectations of a continual moderation in growth and persistent supply chain constraints. On the flip side, if a more severe recession plays out, JBL expects better cash flows due to the working capital nature of its business.

Still, with JBL authorizing $1 bln for share repurchases, bringing its total to $1.3 bln, or around 16% of its outstanding shares, management is expressing its confidence in delivering stable cash flows despite uneasiness in the global economy. JBL's Q1 (Nov) outlook of $2.00-2.40 in earnings and $9.0-9.6 bln in revs also signaled that momentum from Q4 will carry into the beginning of FY23. If this momentum is sustained, it sets the stage for JBL to exceed its initial FY23 targets.

Bottom line, we continue to like JBL due to its excellent diversification, stable cash flows, and aggressive share buybacks. Its valuation of 7x forward earnings and 0.6% dividend yield also add to its attractiveness.

Splunk sees another high level executive depart, but reaffirm of guidance brings some relief (SPLK)

Splunk (SPLK), a data analytics and cybersecurity company, is experiencing another shake up at the C-suite level as CFO Jason Child will depart the company to accept another position at a "leading pre-IPO semiconductor company." Shortly after SPLK issued its press release, it was revealed that Child accepted the CFO role at Arm Ltd., which is now planning to go public after NVIDIA's (NVDA) $40 bln bid to acquire the company fell apart. The exit comes less than one year after SPLK's former CEO, Doug Merritt, unexpectedly stepped down last November while the company was struggling to find its footing amid a major business model transition.

Specifically, SPLK has been migrating its on-premise products to a cloud-based platform, and Child has played a meaningful part in that conversion. His departure could create a distraction as the company looks to get back on track after cutting its FY23 total ARR and cloud ARR guidance last quarter. During that earnings conference call, Gary Steele, who was appointed CEO last March, explained that Q2 total ARR and cloud ARR missed internal expectations due to a slowing number of cloud migrations and expansions as customers tightened their spending.

Since that Q2 earnings report on August 24, SPLK has plunged by nearly 30%, with losses accelerating over the past week as rising interest rates hammered the market. Today, though, the stock is rebounding a bit, despite the turnover at the CFO position. The upswing can be tied to a couple of different factors.

  • SPLK reaffirmed its Q3 revenue guidance of $835-$855 mln, and all of its guidance for FY23. This includes revenue of $3.35-$3.40 bln, total ARR of approximately $3.65 bln, cloud ARR of approximately $1.8 bln, non-GAAP operating margin of roughly 8%, and free cash flow of at least $400 mln. Typically, a reaffirm of guidance wouldn't constitute a significant positive catalyst, but in this case, it's viewed as a relief and its easing investors' anxieties.
    • With macroeconomic growth concerns rising around the globe as central banks race to increase interest rates, it stands to reason that worries about a further deceleration in IT spending are also intensifying. The fact that SPLK reaffirmed its guidance in this increasingly challenging climate is encouraging.
    • Helping the company's cause is its relatively smaller international exposure, particularly to Europe, which is encountering fierce economic headwinds related to energy and currency pressures. In FY22 (ending Jan. 31), revenue in the U.S. accounted for nearly 70% of total revenue, and no country outside of the U.S. accounted for more than 10% of total revenue.
  • Two high level executive departures in the span of ten months are certainly not ideal. However, the overall leadership of SPLK is stable with Steele at the helm, who has effectively steered the company towards a cloud-based model. Prior to Steele's appointment as CEO, cloud ARR represented roughly 35% of total ARR. As of 2Q23, that figure stood at approximately 45% of the total ARR. While the CFO transition could create a short-term disturbance, it shouldn't impede SPLK's transformation progress in a substantial way.
Seeing a high-level executive leave a company for another opportunity is never a comforting sign. In this case, though, it doesn't appear that Child is leaving due to tough times at SPLK. Rather, he has the opportunity to help take one of the largest semiconductor companies in the world public, which would be difficult to pass up. By reaffirming its guidance, SPLK is signaling to the market that Child isn't jumping ship as the business deteriorates.

United Natural Foods is up after distributing a JulQ EPS beat and $200 mln for buybacks (UNFI)

By topping bottom-line estimates in Q4 (Jul) and authorizing $200 mln for share buybacks, United Natural Foods (UNFI +3%) is chomping away at higher territory today. However, enthusiasm is slightly muted as inflationary pressures dinged the food distributor and retail grocer's top-line growth in the quarter. Meanwhile, UNFI guided FY23 earnings and revs merely in line with consensus.

Outperformance in JulQ was also highly anticipated after many of UNFI's peers reported upbeat numbers recently, including Performance Food Group (PFGC) and SpartanNash (SPTN). Grocery sales have also flourished due to resilient eat-at-home trends, illuminated by excellent results recently from Kroger (KR) and Albertsons (ACI).

  • UNFI still posted solid headline results, growing adjusted EPS around 2% yr/yr to $1.27 and revs 8% to $7.27 bln. Although sales growth was lighter than analysts anticipated, it was still in line with UNFI's prior guidance.
    • Wholesale sales from UNFI's three primary channels grew by 8.2% yr/yr on a consolidated basis, while retail sales jumped just over 1%.
  • One of the slight blemishes in the quarter was volume loss of just under 1%. However, it should be noted that this outperformed the broader industry, which saw volumes decline nearly 3%, reflecting possible market share gains.
  • A significant positive development from the quarter was improving labor statistics. Distribution center vacancy improved from 7% in Q3 (Apr) to 4% by the end of Q4. Likewise, UNFI's driver vacancy rate declined to 8% from 9% in Q3.
  • Looking ahead, UNFI expects further gains on its top and bottom lines in FY23, albeit much smaller than the company experienced in FY22. UNFI guided to 4% earnings and revenue growth yr/yr in FY23 at the midpoint of its forecast of EPS of $4.85-5.15 and revs of $29.8-30.4 bln.
Overall, UNFI's JulQ numbers highlight the durability of the grocery industry during the current inflationary environment. However, shares of UNFI still trade around 20% lower on the year, far below many of its peers. We think this is due to a couple of risks UNFI carries that do not plague its better-performing peers. For one, UNFI does not provide investors with a dividend. Secondly, as the primary distributor to Whole Foods Market (AMZN), which comprised nearly 20% of its JulQ net sales, UNFI heavily depends on a single grocer.

Nonetheless, as the largest North American grocery wholesaler, UNFI commands a considerable presence, giving it a competitive advantage to capture market share and benefit from sustained eat-at-home trends. UNFI also authorized $200 mln for share buybacks, representing around 8% of its outstanding shares, signaling management's confidence in the company's long-term growth strategy.

TD Synnex disappoints with small beat and lackluster guidance, supply chain remains an issue (SNX)

TD Synnex (SNX +1.2%) is a name we like to keep an eye on to gauge enterprise spending levels for network equipment and PCs. SNX operates in many areas within IT, so that is a key reason we like to monitor it. And since the company reports early in the earnings reporting cycle, it gives us a sense of what to expect when the primary earnings season rolls in next month.

Also, what is interesting is that the newly created TD Synnex does not manufacture anything. It's more of a distributor of third party IT products, from software to servers and storage systems. Think of SNX as more of a wedding planner. When a business wants to spend on IT, SNX acts as the point person, putting everything together. It also has a lot of small and medium sized IT resellers as customers.

  • The Q3 (Aug) results were mildly disappointing. SNX posted a decent beat on the top line but the EPS beat was much narrower than recent quarters. Revenue did jump 195% yr/yr to $15.36 bln, but much of that was from the Tech Data acquisition, so do not read too much into that. The merger closed September 1, 2021, so this will be the last quarter to see a huge revenue jump.
  • SNX saw robust demand in endpoint, data center, and hyperscale infrastructure. It also continued to see solid commercial client device demand and ASP increases during the quarter. However, supply chain disruptions remain an issue.
  • Probably the more troubling part of the report was the guidance for Q4 (Nov). Both revenue and the mid-point of EPS guidance were below analyst expectations. SNX says demand in Q4 looks solid, but the weak guidance sounds like it is due to a combination of FX headwinds plus management sounded a bit cautious on the timing of supply chain improvements.
  • The big question of course is when supply chain issues may normalize. Unfortunately, SNX was not overly optimistic. Supply chain disruptions remain elevated for data center, infrastructure, and networking, although it has improved in areas like endpoint, including PCs. SNX expects to continue to see industry supply imbalances well into 2023 in some product categories. As a result, its backlog remains elevated compared to historical levels.
  • On the positive side, the merger integration with Tech Data is going better than expected. SNX has realized cost synergy benefits of $140 mln, which is ahead of initial expectations of $100 mln in the first year.
Despite the cautious comments about the supply chain and the mediocre guidance, the stock is holding up ok. We think that has more to do with the tech bounce we are seeing today in the overall market rather than SNX's results. Probably the main negative was the timetable for supply chain issues normalizing. Unfortunately, SNX's business cannot do much when it is hampered by its ability to get product from IT equipment vendors. It sounds like the situation is slowly improving and SNX just has to work around it the best it can. This report adds to our caution about the IT space heading into earnings season next month.

Wynn Resorts and other Macau casino operators hitting the jackpot as China reinstates e-visas (WYNN)

When scanning today's leaderboard, one group of stocks immediately jumps off the page. Casino stocks, especially those with significant exposure to Macau, such as Wynn Resorts (WYNN), Las Vegas Sands (LVS), and Melco Resorts & Entertainment (MLCO), are hitting the jackpot today. The catalyst stems from Reuters, which reported that China is planning to reinstate an e-visa program that mainland travelers and group tours commonly used before the pandemic hit in 2020. If everything goes according to plan, Macau will be in line to welcome back Chinese group tours in November, representing a major milestone in the gambling hub's recovery.

This is viewed as a significant positive development for Macau in general, and for the casino owners that operate in the region.

  • Although Macau has remained open to mainland China travelers, the removal of the e-visa option made it a much more onerous process to visit the tourist destination. In fact, it can take up to a week or more to gain approval to visit Macau. This time-consuming procedure, combined with on-again, off-again COVID-related lockdowns and restrictions, has deeply cut into Macau's primary revenue stream. For some context, it's estimated that tourists from mainland China account for as much as 90% of a casino's revenue in Macau.
    • With an e-visa, travelers can be almost instantly approved to visit Macau. Therefore, the recovery in visitation is bound to sharply accelerate, but there is a lot of ground to be gained.
    • While visitation to Macau increased by 30.7% in FY21 on a yr/yr basis, it is still down by a staggering 80.4% compared to 2019 levels.
  • Through its 72% ownership stake in Wynn Macau, Ltd., WYNN owns and operates two resorts in Macau: Wynn Palace and Wynn Macau. In FY21, the two casino resorts generated revenue of $1.51 bln (~40% of total revenue), which was up by 54% yr/yr. However, that is still only 33% recovered versus 2019 levels. The most recent financial news for Wynn Macau hasn't been very bright, either.
    • In July, Macau instituted a shutdown of all resorts for two weeks due to local COVID outbreaks. This development has severely impacted Wynn Macau's Q3 results, as reflected in an EBITDA burn of approximately $1 mln per day on a quarter-to-date basis (as of August 9).
  • For LVS, the stakes are even higher in Macau following the company's sale of its Las Vegas properties in 1Q22. Now, the vast majority of its business is derived through its Venetian Macau, Londoner Macau, and Parisian Macau resorts.
    • Accordingly, LVS has been hit even harder than WYNN by the COVID-related restrictions in Macau. In 1Q22 and 2Q22, LVS posted revenue declines of 21% and 11%, respectively. For these same two quarters, WYNN generated an increase of 31%, followed by a decrease of just 8%.
The main takeaway is that there's finally a ray of hope that Macau casino owners can make substantial progress in returning to 2019 business levels. That won't happen overnight, of course, but the reinstatement of the e-visa program should turbo-charge the recovery effort.

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