Las Vegas Sands (LVS) didn't get the memo. It didn't get the fundamental thesis bulletin of 2016's rally: the world is getting better and it got better as the previous quarter went on, and a lot of that is a return to growth from China.
Actually, not only did it not get the memo, with its sizable Macau exposure, it threatens to create a whole new narrative in itself.
Listen to this answer from last night's complete downer of a quarterly conference call from president and COO Robert Goldstein about the Chinese gambling mecca:
"I think that March was obviously disappointing. We had a really great January, February. March certainly softened up worldwide. I think Chinese tourism and consumer numbers are pretty depressing across the globe and certainly it was a little bit softer than we had hoped in Macau."
Now, this LVS bit of countertrend pessimism may get lost in the weeds of stronger oil prices that come, in large part, from a pickup in oil demand from China. It may not be able to bubble above the surface that is colored by the acceleration in revenue at American Express (AXP) while a huge number of shares have been taken out, an acceleration that has to go with quality loan growth. It may be obscured by the amazing numbers out of ServiceNow (NOW), that magic elixir 44% growth that all high-multiple stocks need.
In fact, I loved the candid acknowledgment from CEO Frank Slootman, amid all of the congratulations on the call that the reality is "for a high growth company like ours every quarter sort of has to be our best quarter ever."
But the fact is that if you told me that the pillar of China is going to come tumbling down, the pillar that's been buttressed by thoughts of better consumer spending out of China coupled with better imports of raw goods and better exports to Europe and a cessation, perhaps because of tariffs or fear of tariffs of wholesale dumping, then we are going to see a repeal of a lot of Dow points here.
Maybe the momentum is so strong and the underlying story of better investment banking and trading this new quarter and the increase month-to-month in the cadence of business at the banks -- something that American Express saw when it comes to lending -- can't be shot down. Maybe there's too much confirmatory chatter away from LVS.
But the fact is simple: this market needs Steve Wynn to say right now that Las Vegas Sands doesn't know what it's talking about and Sheldon Adelson's happy with how things are going, or a rift will be established but quick. The purchase of more than $100 million's worth of shares of Wynn by Steve in the open market was part and parcel with the return-to-growth thesis. We don't want that ripped up.
Or to put it another way, let's hope that the Chinese didn't like the Sands and went everywhere else. Otherwise, all I can say is, we've gotten ahead of ourselves and gotten there pretty quickly.
Let's hope Yum (YUM) this morning and Starbucks (SBUX) tonight refute Adelson and that the commodities markets don't stall out or you can bet the bears will use this LVS number against the prevailing thesis and, you know what? Without a quick dismissal of this LVS call, maybe, just maybe, they are right.