Casino stocks rise as China eases COVID lockdowns, Bed Bath & Beyond to lower expenses

Yahoo Finance Live takes a look at several trending stocks, including Qualcomm indicating it will continue to be Apple's chip supplier for iPhones.

Video transcript

RACHELLE AFFUKO: Let's try that again, shall we? I'm going to kick us off with Triple Play. And my pick to kick us off is Bed Bath & Beyond. The ticker symbol is BBBY. Now, the home goods retailer actually got a downgrade from B. Riley securities, as its turnaround efforts failed to offset falling store traffic, as well as the supply chain challenges it's still enduring. Now, the stock down today around 4% And down more than 50% year to date.

And while several retailers have too much inventory, it's the opposite problem for Bed Bath & Beyond. They actually don't have enough merchandise. Our earnings estimates for the quarter also fell more than 5% just in the past week, and that's according to FactSet. And it also doesn't help-- on the consumer side, if you're shopping in one of their stores, there was a note from Bank of America that claimed that Bed Bath & Beyond actually cut their air conditioning in order to lower expenses.

Now, Bed Bath & Beyond told Yahoo Finance that no Bed Bath & Beyond stores were directed to adjust their air conditioning and that there have been no corporate policy changes in regard to utilities usage. So a bit of a PR embarrassment there but they're saying that this wasn't a corporate decision. Now, analysts are expecting more closures from them, as well as their Buy Buy Baby store openings to halt. So very hard to find a silver lining here for Bed Bath & Beyond.

SEANA SMITH: It certainly is, Rachelle. And we know that this is a company that has had a couple of tough quarters, to put it mildly. Also in that Bank of America note, they said that the company had been cutting employee hours, have been reducing store hours. They also have been canceling some remodeling projects. They're actually going to be out with earnings before the bell tomorrow, so we'll get a better look at what business has been like over the past couple of months.

Now, remember, their prior quarter, sales dropped 22%. We certainly saw the reaction in the stock after that announcement was released. Bank of America expecting a 20% drop tomorrow when Bed Bath Beyond reports its sales. So it's certainly a mover to keep in mind for tomorrow's trading.

SEANA SMITH: All right, one mover today that I am watching is Qualcomm. It's actually the top-trending ticker on Yahoo Finance right now, shares hitting a two-month high after hardware analyst Ming-Chi Kuo said that he believes Qualcomm will remain Apple's exclusive supplier for 5G chips and iPhones next year and that the tech giant's attempts to develop modem chips for its flagship phone have, quote, "failed--" or may have, quote, "failed."

Now, Apple initially estimated that Qualcomm would only account for about 20% of the chips used in their phone going forward. Kuo also wrote that he thinks Qualcomm's revenue and profits for the second half of 2023, first half of 2024 will likely beat the Street's estimates. As a result, you can see shares popping for Qualcomm today, Dave, with the stock up just over 4%.

DAVE GRIGGS: I just want to zoom out a little bit on the entire industry because it's Congress that continues to hurt the entire chips industry because of the Chips Act. We hear CEO after CEO complain about Congress's inability to act. Pat Gelsinger the most recent today, the Intel CEO, saying stop dithering, Congress. This is an act that passed in January of '21 and has still not approved a funding package. And it's holding back the entire industry. No one's going to build these plants in the United States until Congress approves that funding. Let's go, Congress.

My play is gambling stocks, LVS and Wynn-- Las Vegas Sands and Wynn-- on positive news on China's COVID lockdowns. China's National Health Commission lowering their quarantine period for outside travelers from 21 days to 10 days-- still significant, but a big reduction. China's zero-COVID policy has been a significant drag on Macau. Beijing also announced over the weekend that schools could reopen, and Shanghai's top party boss declared victory over COVID-19. Disney Shanghai also set to reopen on Thursday after shutting down for more than three months.

Shares of LVS down 30+% over the last year. But on a very bad day for the S&P, they are up 4.7%. Wynn down 50% over the last 12 months but they, too, among the five big winners on the S&P on the day. But the big question, as it has been multiple times, Rachelle, will this reopening last for China? Because we've heard that story before they go right back in.

RACHELLE AFFUKO: And it's tough because you see some of these US casino brands that have exposure in China. They're gearing up for this comeback. But of course, when you bring in more tourists, you bring in more business, you also increase the likelihood of a COVID resurgence. So it's really a double-edged sword. But obviously, China trying to make up a lot of lost ground here for being a huge destination for gambling and for casino tourism and Macau, as well, of course. So it'll be one to watch to see if this does result in perhaps another influx of COVID cases. Hopefully-- not hopefully-- this will be the rebound that they need.

SEANA SMITH: Hopefully it won't. Certainly, the casinos are hoping that won't be the case. Las Vegas Sands, in their most recent earnings report, their CEO Robert Goldstein was quoted as saying earlier this month that it wouldn't, quote, "take long before Macau rebounded." So it seems like he might have been right. But the big question now, like you guys were saying, is whether or not this reopening is going to stick.