How will today’s potentially explosive elections in the United States affect Macau stocks? As nail-biting as they are and riot-instigating as they may be, it’s only a secondary question. The main problem for Macau right now is that the Chinese government is not letting anyone in to gamble. Until they do, it doesn’t matter who the US president is. However, assuming everything does return to normal somehow at some point, then yes, the US election results might matter in the longer term.
The basic answer is that a Biden administration would probably be less bad, as a second term Trump would unleash Sinophobic fury above and beyond what he’s already done in his first term with his protectionist trade wars and other belligerent nonsense. Joe Biden on the other hand could possibly rescind some of the tariffs that Trump has enacted. That would be quite welcome. Maybe he won’t but at least it’s a possibility. With Trump it’s completely out of the question, and so I believe a Biden victory would give Macau stocks a short term bump. Biden might even do something extra and send Ambassador Hunter over there to make a few fun deals and be a board member at Galaxy or whatever. Hunter would love that.
A Trump victory would scare away a lot of the Macau buyers that have come in to push the sector back up since March. Who knows what an unfettered second-term Trump could launch against China, especially if he blames Beijing for crashing the dollar when it sells US Treasuries after Trump spends another $2 trillion on bailouts financed entirely by the printing press. I would even say that some sort of low-boil covert hot war between Washington and Beijing is not completely out of the question.
Fundamentally though, reality and Macau stocks are not exactly on the same page these days, whoever wins. The VanEck Gaming Vectors ETF, which tracks largely Macau casinos, has doubled since the March bottom. Why? There has been no recovery. Not even close. Visitation to Macau is down 78% in September compared to the same month last year. There is no rocket science here as to why. Visitation to Macau from anywhere other than mainland China, a trickle from Hong Kong and a drip from Taiwan is for all intents and purposes choked off entirely. It’s not the virus. There have been no new deaths from the virus in Mainland China since April. 105 have died in Hong Kong, zero since September 25.