9:00am (EST)
The market finished flat on Tuesday ahead of Italy’s debt offering which we will cover in a minute. Economic news was mixed but not too shabby as Consumer Confidence came in better-than-expected while the Case-Shiller Index came in below forecasts. We weren’t too surprised to see a tight trading range as neither the bulls nor the bears wanted to take on the added risk of Italy.
The Dow fell 2 points to 12,291 after kissing a high of 12,328 while the low came in at 12,269. The S&P traded in a 7 point window and gained a tenth of a point to close at 1,265. Surprising, Tech fared the best after adding a 6-pack to its belly to settle at 2,625.
We did get one nugget of good news yesterday and believe it or not it came from the government. We have been saying for a few months now that online poker could be coming back and the Department of Justice is leaving it up each state if they want to approve online gambling or not. The DOJ is arguing that the federal Wire Act may only prohibit sports betting and if the Unlawful Internet Gambling Enforcement Act is reversed, it will mean more than tax revenue for the government.
The beauty of this news is that it will create JOBS which is what the talking heads and analysts fail to mention. It’s no secret some states are busted and broke and the tax revenue generated will be enormous. Just to give you a glimpse of how big some of the poker sites might get, PartyPoker.com was doing 1,800 hands a minute and handling $125 million in wagers a day. The site is owned by Bwin.Party Digital Entertainment and its stock trades on the London Exchange. Before the crackdown in 2006, revenue was approaching nearly $1 billion a year with much of the pie coming from the US.
You can bet the big players in Vegas will be all-in on this one. Our favorite stock in the Casino Group is Wynn Resorts (WYNN, $113.53, up $3.53) which popped 3% but the options can get pricey. We would vote for Steve Wynn if he ran for President but that isn’t happening. Our second favorite in the sector is MGM Resorts International (MGM, $10.42, up $0.46) which jumped nearly 5% yesterday. And if you wanted a reason to buy Zynga (ZNGA, $9.75, up $0.36), you just one.
The latter two aforementioned stocks are current members of our Weekly Wrap portfolio and we are looking for double-digit returns from them in 2012.
Futures are up as we head to press as things went well with Italy’s debt offering. Dow futures are higher by 21 while the S&P 500 futures are up 3 points. Nasdaq futures are showing a 7 point pop so the market should get off to a good start this morning.
