Resorts Suffer as China Cools
China's services sector suffered it's weakest growth in three months in November, and Wynn Resorts (NASDAQ: WYNN) and Las Vegas Sands (NYSE: LVS) saw a negative response.
According to CNBC, the latest data is portraying an economy slowing quickly and in need of policy support.
“The index fell to 52.5, a sharp decline given that October's reading was 54.1 — the highest in four months — though the index remains above the 50 level that separates expansion from contraction in the sector.”
Analysts were showing their cards (pun intended) on Wednesday morning, with J.P. Morgan among others lowering the price target on WYNN to $150.
"With price pressures easing further, Beijing can and should use policies that are targeted on small businesses and service sectors to keep GDP growth at above 8 percent for the coming year," Qu Hongbin, HSBC's chief China economist, said in a statement published by Reuters.
According to the article, China's PMI for the non-manufacturing sector was released on Saturday and it fell to 49.7 in November from 57.7 in October.
"The weakness in the manufacturing sector is spreading to the non-manufacturing economy. We think the policy fine-tuning also will spread," ING's Condon said.
