Why Are Casino Stocks WYNN, LVS Up Today?
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Casino stocks are rallying higher on Tuesday on hopes that China will continue relaxing its Covid-19 policies. Those restrictive policies kept a tight lid on local economies and drew the ire of its citizens. Now, investors are looking at potential upside in the country.
Wynn Resorts (NASDAQ:WYNN) and LasVegasSands (NYSE:LVS) are up about 5% and 4%, respectively. Melco Resorts (NASDAQ:MLCO) is doing better, up 7%, while MGM Resorts (NYSE:MGM) is up about 1%.
China has long taken a different approach to the Covid-19 pandemic. The country has avoided using mRNA vaccines, like those from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA). It has also kept intense lockdowns and restrictive travel policies in play.
Now though, the country is taking a different approach.
China will use Pfizer’s antiviral treatment to help treat the overwhelming number of new Covid patients the country is seeing after its dramatic policy shift. Some reports say the country had almost 250 million new cases of Covid-19 in the first 20 days of December.
How Does This Affect Casino Stocks?
China’s new stance on Covid-19 — a seemingly 180-degree shift from its prior policies — is both good and bad. While it will result in a boom in case counts, it also allows for more flexibility and can jumpstart its economy.
Regulators will nix the quarantine requirements after Jan. 8, which require international arrivals to do a 5-day hotel quarantine and other mitigation measures. Now, they’ll just need a negative Covid test within 48 hours of their flight into China.
The rebound in travel and tourism may not be immediate, but for casino stocks, it’s a step in the right direction.
While many investors may be familiar with casino stocks because of their time in Las Vegas, many of them actually generate substantial revenue in Macau. Regaining Macau as a considerable portion of their business in 2023 will go a long way into aiding the recovery of these beaten down names.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Article printed from InvestorPlace Media, https://investorplace.com/2022/12/why-are-casino-stocks-wynn-lvs-up-today/.
