Question of the Day - 04 November 2016

We would, in Wall Street parlance, put a "Hold" rating on gaming stocks at this point.

The decision on whether to invest long-term depends on the outcome of the race.

Hillary Clinton would, if elected, probably continue the economic policies of the current administration.

While President Obama gave the gaming bosses some scares immediately after his election, the industry has enjoyed an upward curve during his second term, with casinos coming to Massachusetts and Las Vegas enjoying record levels of visitation. Vegas gambling revenues have not regained the apogee of 2007 (and probably never will), but that was an aberrant year, the culmination of certain overheated economic trends (such as homeowners drawing down their equity) that are probably not going to be seen again in our lifetime. Also, gambling in and of itself has become such a convenient nationwide phenomenon that Las Vegas, while still an adult playground, is no longer a gaming-centric destination.

This is strictly one opinion, but we would not invest in gaming stocks in a Donald Trump administration. This has nothing to do with his (under-)performance as an Atlantic City casino operator and everything to do with his proposed economic bromides, many of which could result in less discretionary spending for the average American.

For instance, he has promised to tear up the North American Free Trade Agreement, thus initiating trade wars with other countries, which will almost certainly drive up the price of consumer goods.

Also, his proposed tax cuts would predominantly favor the very wealthy, adding trillions to the deficit (there is little argument on this point), while shifting the tax burden to the lower classes.

Any way you look at it, Trump's economic prescription means less spending money for the Average Joe (ironically, the bedrock of his support), which could have a catastrophic effect on gaming stocks, as would any clampdown on international travel.

But don't take our word for it. Registered Republican and MGM Resorts International CEO Jim Murren, after dropping hints about favoring "free trade" and "diversity," came right out and endorsed Clinton.

"Even Donald Trump's most fervent supporters would have to agree he's unpredictable and that's not good for the financial markets," Murren told the Las Vegas Sun. NAFTA renegotiation could alienate Canadian and Mexican tourists, vital to the Vegas economy, and "There is no resemblance to business practices that I admire from a standpoint of compromise, clarity, teamwork, integrity, and excellence that I see evidenced in Donald Trump as a businessman."

That's what one Fortune 500 CEO thinks. But don't take his word for it.

On November 3, a piece airing on "All Things Considered" on National Public Radio tackled this same question and determined that "Markets don't usually move too much based on who wins the presidency. But this time around, it's a different story, and as Donald Trump's prospects have improved, stocks have been falling" -- the S&P, for example, lost 3% in the previous week.

The report covered two Dartmouth economists who decoded recent movements in the stock market to calculate the economic impact of the election outcome.

The economists, in part, correlated movements in the stock market with the offshore betting sites, which they called the "political prediction market," to show that the stock market is rooting for Clinton and could gain 12% after Clinton wins the election. Normally, the market favors the Republican candidate, but only by around 2%.

Analysts explained that Trump is a wildcard, unpredictable, fluky. This leads to greater uncertainty about his policies and performance as president. And markets do not like uncertainty.

So if you believe this report and that Clinton will win, you might want to buy casino stocks in the next few days. They might go up, at least in the short term, on the news.

"Long story short. Please refrain from Political comments & propaganda. The conclusions presented with the backed up support presented as "facts"used in today's QOD, meh..... where to begin. Quoting all things considered as a reference? Perhaps the source of uncertainty of the future is the upcoming quagmire of investigations on Clinton,foundation, et al- even after she is elected.... Your response while may be One person's honest opinion...irritated me the reader (since 2007) greatly. Political opinions are not the reason I come to this site. No doubt, after the response from today's QOD, and AFTER the election you will present someones more eloquently worded rebuttal. sigh... Please.....stop. Long time member (occasionally a paying member), First time complainer." "Daily reader for many years. Very disappointed by today's QOD answer. I don't expect political responses, and today it was right out of the DNC Talking Points. Please stick to regular reports and avoid politics." "While reading your answer to today’s Question of the Day, it became obvious that LVA fully supports the MSM elite's prejudice against Trump. I now view LVA in a totally different light and will question its bias going forward. Hope you realize that you are playing with fire with regard to future subscriptions." "I found today's answer to be offensive and self serving. We get it, you're a (Crooked) Hillary supporter but your QoD should not be used to promote one candidate over the other. I doubt that your previous, long time, writer would have written such a biased answer to that question (also made up?). Shame on you." "Two things: 1) Don't use NPR as any type of authority or source to back up any opinions. NPR gets the majority of its funding (and always has) from the government and the taxpayers, and has never had to face the demands, challenges, and ups and downs that REAL radio broadcasters have to face on a regular basis. They ALWAYS take a liberal overview on matters of news and politics. My source for this: ME, with over 30 years of actual broadcast experience, seeing how both sides work first-hand. 2) Your point about holding off on investments because of the uncertainty about Trump is also flawed, and my opinion has nothing to do with his suitability or lack thereof to be president. After 7 years of successful self-directed investing in stocks, using advanced technical analysis, I can tell you that there is always profit to be made regardless of Wall Street moves and reactions. Been there, done that. (And glad that most people don't use that approach to investing!)" "So glad to see others are annoyed with your Clinton bias in today's QOD answer. If memory serves me correct, you ran a poll asking your readers if they supported HRC or Trump. To your chagrin, the poll showed your readers favored Trump over HRC. If I ran a business and KNEW at least half of my clientele was against XXX, you can bet I would not be favoring XXX. Come on, this is a gambling website, not a pro democratic one." "Ditto to every comment sent to you re your "answer" to the QOD. Your liberalism shows through, and your editors didn't bother to axe them. That tells me a lot. I will remove your website from my bookmarks now that I know you can't refrain from espousing such socialist garbage. Shame on you." "Elections are political, so your QOD response today had to have a political component. Also, you are entitled to an "opinion" as are other readers. NPR is a sane voice in the wilderness of shrill ranting conservative talk radio - my opinion. So to cite it in you response to support your opinion is okay with this QOD daily reader since long before 2007." "Based on your Question of the Day, November 4, 2016: can you explain Steve Wynn's (who is not a Republican) support for Donald J. Trump? I personally believe your analysis is completely flawed and without true merit. The complete and total corruption of the Clinton's and their highly flawed foundation, would make them ineligible for a Nevada Gaming Licence! Being that Steve Wynn could not make a go in Atlantic City, I think the Donald should be given some slack on this. I have flown their and the Atlantic City airport, is nothing more than a tin metal shed. A key reason for their decline is their deep endemic history of institutional corruption: that has left, how many mayors & city officials in prison? The Boardwalk Empire series, shows just how far back, the culture of corruption in Atlantic City goes. I am proud as a Floridian to have voted for Trump in the primary and general election. The old order is dead and a new revolution of prosperity, fairness, honesty, integrity, and otherwise are the future with a trump Administration!" "Shame on those with the audacity to bash LVA's response to the reader who asked "in your view", how the outcome of the election would affect the stock market. A question was asked, and as usual LVA staff researched it. You bashers, go back and read the original question; every reader has the right to submit one. Thanks, LVA, for your thoughtfully composed reply, which added a few angles as I consider my own position. People need to feel free to submit questions and have them answered without it turning into another version of FFA food fights." "Thanks for printing my rebuttal along with the others. It was the right thing to do." "Donald Trump's supporters just can't deal with facts, so they lash out at those who present them. Don't like the truth? The source must be biased. Don't like the result? It must be rigged. Can't argue against facts? Start lying. Yes, you should probably avoid politics, but don't let the morons get you down." "Wow. The updates to your QOD are shocking. The insults and threats contained in some of the responses are juvenile. Clearly, the strong bias displayed by some of the posters prejudices their ability to judge the fairness of your answer. To be truly unbiased, you must also be disinterested in the result. Take it from me, a Canadian, that your QOD answer was in fact fair and balanced." "No question, just a comment regarding your answer to the Question of the Day. I am totally shocked by some of the rude and vicious comments directed to you for your answer regarding the current political scene. This just confirms my thoughts that this political election is one of the worst we have ever experienced. There is no RESPECT for anyone or any opinion in our world today. What is happening to our nation? I can only hope after this is all over, people will return to a sense of normalcy again. Sadly, I feel it may not. Please do not change your column because of this, you did not offend me and I have been a paying member for a number of years. Just wanted to thank you and say keep up the good work. And Yes, I have already voted!!!" "Stunned by the many angryresponses to today's QOD. I thought your response was insightful and fact-based. There's a lot of hysteria in the air, hopefully things will calm down post-election."