Alibaba - This is NO Den of Thieves

Alibaba – what exactly is all the hype? For many Americans – the words Alibaba reminds them of the character in the folk tale – ‘Ali Baba and the 40 Thieves’ – a 1979 Disney Storybook based on ‘One Thousand and One Arabian Nights'. A collection of tales that were born out of West and South Asian folk tales written during the Islamic Golden Age. But this my friends is not what we are talking about – Alibaba is by now – almost a household name – and although it is not something that many Americans use yet – that may be about to change.

Alibaba Group – (NYSE BABA) was the privately owned Hangzhou based group of internet e-commerce businesses – including – B2B, online web portals, online retail and payment services, a shopping mall, and cloud computing services. This company started 15 years ago in a bedroom by a former teacher will now produce a massive payday for Jack Ma - some $867 mil catapulting his net worth to $21.9 bil.

I said was because last night they went public in the biggest IPO in history – pricing some 320 mil shares of stock at $68/sh – raising some $21.7bil valuing the company at $168 bil. Demand ran high – Bloomberg reported that 6 of the largest funds in this country - Blackrock, Fidelity, Putnam, Wellington, TRowe and Waddell & Reed had each put in for $1 bil worth of stock – and it is ‘game on’!

In just about 3 hours the opening bell will ring – the guests, bankers, company representatives will all gather here at the NYSE to take part in this historic event. – Expect that the opening process will take a bit of time – because that’s how we roll here at the NYSE – you see – we still have human beings that oversee the process, that give information out to keep ALL parties involved and informed – this is not a race to ‘get it open’ – it is a process that allows for informed decision making information to be generated and disseminated so that anyone that wants to participate can do so while being completely informed as to size and price. It is a remarkable process and one that has worked for 240 yrs. (Shall I go on?)

Just to make it a bit more exciting – last night - the PBoC (People’s Bank of China) cut the 14 day REPO rate by 20 bps to 3.5% - easing short term borrowing costs in a sign that the gov’t is still a bit nervous about the economy. This on top of the $81 bil that they pumped into the top 5 banks on Tuesday and the $1.3 bil they pumped into the money mkts this week. Chinese stocks surged higher…. Assuring investors that the 'horse' is alive and well. (2014 is the year of the horse). This just as the hype builds around this massive Chinese IPO that will dominate the headlines all day.

And do not discount the fact that this pricing took place on 9-18 and raised $68 bil. 8 being the operative number - as it signifies wealth and prosperity in the Chinese Culture.

Onto mkt action yesterday - Can you "when push comes to shove" - because that is exactly what is happening around the world. The Dow and S&P set new records - as the excitement continues because the FED failed to give any specific time line over any rate increases while global central banks continue to feed the beast. The road of accommodation is clearly the least unsettling for the mkts and we can see that all around the world. The fact that nothing has changed is not being lost on traders - and up we go.

Makes no difference the weaker eco numbers we got yesterday - and in fact that only further solidifies low rates going out. Housing starts fell by 14.4%, building permits down by 5.6% as every region in the country reported weakness.

But again the dollar is suggesting something different - or is it? Despite the fact that the US economy continues to put in a mixed performance and inflation remains below target, currency traders are betting on prospect of rate increases down the line. The strong dollar continues to confound so many given that stocks are moving higher on the fact that rates are not going anywhere anytime soon but currency traders seem to have the view that interest rates in the US will rise at some point, therefore you buy the dollar to get 'in front of that trade'.

Again - It doesn’t take a rocket scientist to know that rates are going up - but the question remains when? As of Wednesday - the signals remained blurred - Janet left it ambiguous....but what is clear is that US rates will rise well ahead of Japan, the UK or the Eurozone causing both the Yen, Euro and Pound to get weaker vs. the dollar in the weeks and months ahead.

US futures are up another 6 pts suggesting that we will break out of upside resistance and challenge S&P 2020. Scotland decided to stay in the 'Kingdom' and the Chinese threw more stimulus money at their economy. Mkts around the world all celebrating.

There are no eco data points today - the show will be all about Alibaba.....the excitement that it will create may for today cause more euphoria - but remember - Alibaba says nothing about the US economy, the US consumer, jobs, housing, manufacturing nothing. So once this subsides the focus will now turn to 3rd q earnings due to start in 2 weeks. For today - Expect the Dow and S&P to make another new high.

Sweet and Sour Chicken

* Courtesy of "The Everything Chinese Cookbook"

Considering that today is all about Alibaba – The Chinese E-Commerce company – it is only apropos to feature a classic Chinese dish.

For this you need:
1 ½ c of Chicken breasts cut into bite size pieces., ¾ c Pineapple Juice, 2 Tblsp rice vinegar, 1 tsp black rice vinegar, 1 tblsp soy sauce, ½ sliced green pepper, ½ sliced red pepper, 2 tblsp oil for stir fry, 2 tblsp + 1 tsp sugar, ¼ c of pineapple chunks and 1 tblsp of cornstarch mixed with 4 tblsp of water.

Mix the chicken together with the pineapple juice, rice vinegar, black rice vinegar, and soy sauce – set aside. Cut the green and red peppers into bit size pieces.

Next add oil to a pre-heated wok. When the oil is hot, add the chicken. Stir fry until it changes color and is cooked. (Save the marinade)
In a medium sauce pan – bring the pineapple juice marinade to a boil. Stir in the sugar until it dissolves. Add the peppers and the pineapple chunks. Brink back to a boil and add the cornstarch and water mix – stir quickly to thicken.

Return the chicken to the wok – pour the sauce over the chicken and heat through. Do not cook it – just heat it through.

*Now you can make a Pineapple/Orange sauce by using ½ c of pineapple juice and 1 tblsp + 1 tsp of Orange Juice.

Enjoy