Weekend Reading #221

This is the two-hundred-and-twenty-first weekly edition of our newsletter, Weekend Reading, sent out on Saturday 10th June 2023.

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What we’re thinking

Just in case anyone missed it, as of this week the S&P 500 has clocked in a 20% run since its low in October last year to print – you guessed it – a bull market.

With everything going on, it’s once again hard to explain on a fundamental level why with an impending recession (arguably the most signposted recession in recent history), a close shave with a government shutdown in the US and supposedly huge new treasury issuance (not necessarily the case, as it turns out) as a result of the aforementioned close shave resolution, we could be in a bull market. But in markets, we’ve learnt over the years that the “why” doesn’t matter – it just is.

For the moment, the backdrop of a near-term bid for bonds (previously positioned to “make space” for Treasury issuance that hasn’t yet come, and is now looking unnecessary given incoming tax receipts) looks supportive for the growth complex, especially as the AI machine continues to churn, with Adobe being the latest to dish out new generative AI features (if you haven’t tried, you must – this takes “photoshopping” to a whole new level, and does the reverse to the notion of “seeing is believing”).

As always, markets are forward-looking, the question is “how far”? Specifically, how long will it be until it sets its eyes on the most-advertised recession in recent history actually starting to bite?

For us, the process remains the same: look to the market for direction and trade what gets placed before us, rather than what we hope or want to happen.

What we’re doing

Last week I finally took some holiday time off and flew down to Sydney from our base in Singapore. Having booked rather last minute, I was left with perhaps the worst seat on the plane (middle seat close to the back and next to toilets), although that didn’t do anything to put a dampener on my overwhelming sense of excitement for what awaited me. Having taken the red-eye flight, I landed at 5am AEST, just in time to head to the beach and catch the sunrise with a much-needed flat white in hand as one does when in Australia. The week, whilst packed and seemingly short, was great and I certainly will be returning and visiting more of the different parts of the country (hopefully next time going in-land more to see wild Kangaroos).

Sydney was great, and what a time I picked to see all of the famous sights; the week I visited was the annual Vivid Light Festival which meant that come nightfall attractions like the Opera House and the Harbour Bridge were illuminated with projections of all kinds of animals, plants and colours. Besides the light show, I visited the oldest pub in Sydney (with a behind-the-scenes tour of their micro-brewery thanks to the girl behind the bar), and even had time to visit a cool street market.

I also drove up to Byron Bay, giving me a lesson in the true vastness of Australia, something which you don’t really comprehend until you drive 800km meanwhile moving just a smidge on the map. Whilst there, I got to stand at Australia’s most easterly point, chill on perhaps some of the most stunning beaches you’ll come across, and most importantly, enjoy plenty of barbecues (all in what Australians would describe as cold winter weather at 24°c). HS

What we’re eating

Whilst in Sydney, I finally ate a kangaroo burger and would wholeheartedly recommend it – I’ve heard many complain that as far as meats go, kangaroo is too tough given their leanness and sheer amount of muscle, although in a burger they typically use fattier cuts (from the tail so I’ve heard) which make for a delicious burger patty. I also had a seemingly unending supply of Avocado Toast and unlike London, it came at very reasonable prices given the avocados grow there (meaning they were also very fresh). HS

Whilst not exactly eating but rather drinking, I was quite shocked by alcohol prices (surprising that I was, having come from Singapore), but once again due to high alcohol taxes aimed at discouraging consumption. Although the thing that surprised me the most on the beer front was the lack of ‘Fosters’ - a beer at home touted as the best-selling Australian beer was nowhere to be found, nor were many of the locals aware of its existence beyond those who’d lived overseas. A quick google search indicated that it’s predominantly brewed in Manchester with its overseas reputation merely the success of 1980s advertising campaigns featuring Paul Hogan “Crocodile Dundee” capturing the hearts of British beer drinkers. So that meant my initial expectancy of Aussies necking oversized cans of Fosters on the beach was quickly put to rest...although a VB or a Coopers XPA shall suffice! HS

What we’re reading

What we’re watching

What we’re listening to

On Thursday evening, I managed to carve out an evening for another dose of live music as previously hoped – at Blackbird, located in the Gillman Barracks. The band was The UnXpected – the same band I saw weeks ago at Muddy Murphy’s; but standing in for Shirlyn was another local singer-songwriter, Amanda Tee. While certainly different in style, in particular, not being as far down the heavy metal spectrum as Shirlyn, the “Amanda + The UnXpected” gig delivered as, well, expected.

This time, I managed to get a couple of requests in: while we didn’t get to hear any Gary Moore, Dire Straits or Dreamtheater (the last one probably a bit of a stretch, but never hurt to ask), we did get a good dose of Bon Jovi, Guns N Roses and a thoroughly enjoyable jam session around Jimi Hendrix’s Little Wing. One would reasonably expect that it’d be difficult for a rock band of that calibre to resist an opportunity to solo through the inspiring base that flowed from Hendrix’s (arguably) hallucinogen-fuelled mind into those mesmerising riffs. The set certainly leaned towards a more mainstream repertoire (no Iron Maiden, but we did get a touch of Blink-182 for a bit of a nostalgic chuckle), but supported by a much better sound system and sound engineer than Muddy Murphy’s, it was no less enjoyable.

On the flipside, it came as quite a surprise that the band wasn’t playing to a full crowd. Perhaps it was because of it just being Thursday night, although I suspect that location wise – located rather far off from the nearest MRT station, and not in a particularly commercial area (though very pleasant with lots of surrounding greenery), it’s not the sort of location one would visit by chance. Add to it the late night taxi surcharge that kicks in after midnight and it becomes a very deliberate choice for anyone to head there.

Or it could just be that the place is relatively new, and needs an extra bit of publicity. One thing’s for sure: the live music scene here is alive and well, and more than able to live up to the standards of instrumental virtuosity that characterised those great decades of rock. EL