Wells Fargo Report on Macau Sends Casino Stocks Higher

Casino stocks rallied Monday morning following the release of a Wells Fargo report WFC. In the report, Wells Fargo said that Macau casino revenues were up 5-10% in the month of August, and were on pace to reach a monthly record. With casino stocks up an average of 3% Monday, it is worth taking a look into what these stocks have been doing in previous months, and whether or not traders should consider getting in at present levels. After rising steadily heading into April, casino stocks have pulled back for most of the summer. While the August revenue growth in Macau is on track to break a monthly record, September is historically a down month for the gaming industry, so the gains may be short lived. The recent slump in casino revenue was demonstrated by the Nevada Gaming Control Board's recent report which said revenues fell more than 10% in May. The Board noted that it were unsure what caused the sharp drop in revenue, which turned out to be the beginning of a 3 month slump for the gaming industry. Bloomberg reported that Macau gaming revenues had the slowest growth seen since 2009 in July, a bad sign for investors. Macau casinos have been experiencing strong growth fueled by wealthy Chinese gamblers in the past few years, but this steady stream of revenue has slowed as the Chinese economy sputtered in recent months. Casino stocks traded up an average of 2 percent Monday following the favorable news. Wynn Resorts traded up as much as 3 percent Monday morning around $108, but pulled back closer to $105 by midday. Las Vegas Sands LVS traded up as much as 3.5 percent and managed to hold onto its gains, maintaining 3 percent growth and trading around $42.75. Melcro Crown Entertainment ADR was up around 3 percent as well, trading at roughly $12 a share.