Adam Parry – Happy Birthday and a Happy New Year
It’s a tale of two halves this week.
Let us start with today, and February 8 has seen some memorable events. On the birthday front, the likes of Jules Verne, James Dean, Star Wars composer John Williams, Nick Nolte and John Grisham were all born on this day as well as Trigger from Only Fools and Horses and Gary Coleman from Different Strokes.
“Whatchu talking bout, Willis”
In terms of those who died on this day, Mary Queen of Scots lost her head in 1587.
But it’s an anniversary that we are going to concentrate on here, and not the 142nd since the English cricket team led by Lord Harris were attacked during a riot at a match in Sydney.
No, we are going back exactly 50 years to February 8, 1971 and the formation of the National Association of Securities Dealers Automated Quotations, otherwise known as the NASDAQ.
To begin with, it was just for stock quotes and did not provide a system to execute electronic trades and was hugely unpopular with brokers because it swiftly cut the bid/offer spread and hence their profits. Some things never change.
Over the years, the NASDAQ has been synonymous with electronic innovation and in 1998 it was the first stock market in the US to trade online.
But over the 50 years since its inception, the NASDAQ is probably most famous for the Dot-com bubble of the late 1990’s. Between 1995 and March 2000, the index rose 400% only to hand all those gains back by 0ctober 2002, That crash saw Worldom, NorthPoint and Boo.com go belly up, while Cisco dropped 86% of its share price and Amazon lost a huge portion of its market cap.
The index bounced back over the next few years until the sub-prime fiasco saw it plunge back to those October 2002 levels in March 2009. Since then, though, there has been little holding it back as technology continues to surge forward. Since that low of March 2009, the index rose from 1691 to a current level of 13800, a meteoric rise of 715%. Contrast that with the Dow and the S&P over the same time period. The Dow is up around 260%, with the S&P up just over 300%.
So we can clearly see that the mighty NASDAQ has surged ahead of its two American cousins over the last decade and a bit. But are we back in a bubble similar to that seen a quarter of a century ago?
Well, as you should all know by now I think 2021 could well go down in history as the year of the bubble. But in terms of the NASDAQ I’m not that convinced that there will be a major reversal of fortune.
Yes, the index is overbought. They are all overbought. The reality is though, that the way the world is today, we are likely to become ever more reliant on tech. Companies like the one that carries this simpleton’s blog are likely to be the way forward in coming years, with the insatiable thirst for market and analytical data providers unlikely to be quenched any time soon.
I would love to see some sort of pullback in the ratio between the NASQAQ and the Dow in particular, but it is difficult to see where that will come from.
The only real hope is if the MPC is correct in what it said on Thursday about a quick rebound in global economies once the vaccines allow us to get back to some semblance of normality. That will give traditional industry a chance to recover and could reverse some of the NASDAQ’s outperformance. As we head forward, though, any moves of that ilk should be seen as an opportunity to reload. Let’s face it, in another 50 years’ time when the NASDAQ celebrates its centenary, technology is not likely to have gone backward.
Right. On to part two and Kung Hei Fat Choy.
Yes, Friday is Chinese New Year. And this year is the year of the Ox, an animal that symbolises strength and determination. Lucky numbers for people born in the year of the OX are one and four, and their lucky colours are white, green and yellow. Norwich City must be going up to the Premier League then.
People born in the year of the Ox are diligent and hard-working, honest and dependable, with their ability to keep calm making them great leaders. Oxen are kind and never look to be centre of attention, which can result in their talents being hidden.
Anyway, some of you will know that we spent Chinese New Year 2019 in Hong Kong. In fact, a week before the festivities took place, I made my one and only appearance for the prestigious Hong Kong Cricket Club.
Full of nerves and trepidation, I turned up for the game on the magnificent ground amid the hills of the Wong Nai Chung Gap.
Batting at 8 – an outrageous slur if you ask me – I strolled out nervously to the middle with the team in some disarray at 95 for 6. First ball was a long hop. With the certainty of over 40 years playing the game, I rocked onto the back foot, punched the ball into the covers and set off for a run. Unfortunately, I didn’t time it too well and was forced to sprint to complete the single. And guess what? My knee popped. First ball.
Struggling to walk, I carried on so as not to seem weak in front of my new team mates. I hit a couple of boundaries before holing out tamely to mid-off for an ignominious 12. Then I dropped a catch when we were fielding and that was that, the end of my HK cricket career.
The next day my knee welled to the size of a cricket ball and I could not walk, which being stuck in a shoebox on the 8th floor of a tower block was not ideal. In fact it was downright miserable. A week later, I was just about able to hobble down to the Star Ferry terminal to watch the New Year’s fireworks, which to be honest were brilliant.
I was still hobbling a couple of weeks later, and then I was stricken by an extremely painful dose of gout. Isn’t getting old wonderful?
Once that had cleared up, I started work for nothing in the kitchens of a gastropub called The Globe, literally 50m from our apartment on Hollywood Road.
It was here that I studied under Chef Patrick, an Englishman more aggressive than Gordon Ramsay and Marco Pierre White combined. Lovely bloke when away from the stoves. A nightmare when behind them.
After being berated for being wholly unable to crimp a Cornish pasty properly, I was bunged on peeling half a ton of spuds a day for the next couple of week as punishment. Once I had served my time, though, Chef was able to take me through some wonderful Asian dishes.
And it is one of those dishes that I am going to share with you to celebrate the year of the Ox on Friday evening. An authentic Kung Pao chicken.
Take 300g of chicken breast and cut into 1.5cm cubes. Marinate in 1/2tsp salt, 2tsp light soy, 1tsp Shaoxing rice wine, 1tbsp cornflour and 2tbsp water for an hour or so. Cut 6 spring onions to a similar size as the chicken. Take 12 – yes 12 – dried chillies and snip in half, shaking out as many of the seeds as you can. To make the sauce combine 2tbsp caster sugar, 1tsp cornflour, 1tsp dark soy, 2tbsp Chinese rice wine vinegar, 2tbsp chicken stock and 1tsp sesame oil in a small bowl.
Now heat your wok over your hottest flame. Chuck in the chillies and 1tsp of whole Sichuam peppercorns and stir-fry until the chillies start to darken. Tip in the chicken and quickly stir to separate. Once separated, luzz in 3 sliced garlic cloves, an equivalent amount of peeled and sliced ginger and the spring onions. Stir fry until the chicken is cooked and then tip in the sauce. Stir until the sauce thickens and coats the chicken. Finish with a generous handful of cashew nuts, mix and serve.
Enjoy, and have a great week.
On the Agenda:
- Wednesday: Powell speech on State of the US Labour Market at Economic Club of New York.
- Monday: Lagarde in a debate about ECB annual report.
- Wednesday: Lagarde in a newsmaker webinar by The Economist.
- Thursday: de Guindos at virtual event On “El sector inmobiliario tras la Covid 19”
- Monday: Bailey in front of TSC.
- Wednesday: Bailey speech at the Mansion House.
- Monday: Markit Mfg PMI; ISM; Construction Spending
- Wednesday: Markit Svcs PMI.
- Thursday: Initial Jobless Claims; Factory Orders; Durable Goods.
- Friday: Unemployment; NFPs expected at 50k; rate at 6.7%; participation rate 61.5%; weekly hours 34.7.
- Monday: German retail sales; Markit MFG PMIs; Italian unemployment; area wide unemployment.
- Tuesday: French CPI; Area wide GDP.
- Wednesday: Markit SVCS PMIs; Italian CPI; Area Wide CPI.
- Thursday: Area wide retail sales.
- Friday: German factory orders; French current account; Italian retail sales.
- Monday: Consumer credit; M4 money supply; Markit Mfg PMI.
- Tuesday: Nationwide house prices.
- Wednesday: Markit Svcs PMI.