US Stock Markets Crash, Political Bettors Moving Money Behind Predicted Recession
Posted on: August 23, 2019, 02:53h.
Last updated on: August 23, 2019, 02:27h.
US stock markets crashed on Friday after President Donald Trump ordered companies to find alternatives to doing business with China during the ongoing trade war between the two countries.
The Dow Jones Industrial Average fell more than 688 points (2.62 percent), while the NASDAQ lost 2.89 percent and S&P 500 2.53 percent.
Trump took to Twitter to “order” domestic companies “to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” The president additionally ordered shipping carriers and services, including UPS, FedEx, Amazon, and the US Post Office, to “search for and refuse” any packages coming from China that contain the synthetic opioid fentanyl.
The economic chaos is causing some political bettors to put more money on a potential economic recession.
The PredictIt market is asking, “Will there be a recession in Trump’s first term?” It has “Yes” shares up to 43 cents. That’s an increase from 33 cents on May 25, a 30 percent surge.
The online political betting exchange describes a recession as the “US economy experiencing at least two consecutive quarters with a negative annual growth rate in real gross domestic product, as rounded to the first decimal, according to the third estimate of such quarters’ GDP growth rates released by the Bureau of Economic Analysis.”
Casino Owner Talks Economy
Billionaire Tilman Fertitta – the owner of the NBA Houston Rockets, Landry’s restaurants, and Golden Nugget casinos – appeared this week on CNBC to voice his concerns regarding the state of the US economy. It wasn’t optimistic.
We’ve had a great 11-year run here and history always repeats itself, and we are going to get a recession,” Fertitta opined. “You can only buy so many new cars. You can only buy so many new TVs. You can only lose so much in a casino.”
“At some point, the consumer is full. They used up their credit. I think we’re getting to the end,” he added.
Fertitta’s doom and gloom isn’t translating to despair for the president.
“The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!” Trump comically tweeted.
Gaming Industry Health
Macau is formally in a recession after posting its second consecutive quarter of gross domestic product decline. That doesn’t bode well for the six casino operators that do business in the world’s richest gaming market.
Back home, US gaming industry stocks are also being rattled by the global uncertainty. The largest casino operators and gaming manufacturers all saw substantial declines to close out the week.
Friday Percentage Losses:
- Sands – 2.39
- MGM – 2.56
- Wynn – 4.36
- Caesars – 2.25
- Penn – 2.44
- Boyd – 3.57
- Eldorado – 5.39
- Red Rock – 2.74
- Scientific – 3.52
- IGT – 4.39
The VanEck Vectors Gaming exchange-traded fund – which currently has 44 holdings of gaming industry stocks – is still up in 2019. The ETF has gone from $33.03 on January 1, to a close of $34.47 Friday afternoon, a 4.36 percent gain.
Galaxy Entertainment and Sands account for 16.5 percent of the fund’s assets.
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