July 4th, 2024
By Clint Gharib
Happy July 4th! In my last Market Update, ‘Interjections’, I wrote:
“With the excitement winding down from the end of this past earnings season, it’s only natural that we can expect a slight dip because of profit taking,
but I do not believe this is an outright sell. Rather if a dip happens, I think it could be short lived for several reasons:
- there are many who remain bearish and have missed much of this recent rally
- there is near record amounts of cash on the sidelines even at the current market highs. I doubt all of that or even half of the cash will change into
stocks as long as money markets are paying 4-5% but if only a 10-20% of it does move into stocks, we could see a renewed rally. - Many companies will still have easy year-over-year comparisons for the first quarter. So year-over-year comparison likely can show attractive growth again.
- I think earnings can beat estimates broadly across industries again in Q1.
- I think rates will stay flat with the Fed neither raising nor lowering rates
I see all of these points intact still as we enter the second half of the year. Argus Research said in there Daily Spotlight on July 1st: “Equity investors enjoyed the first half of 2024, as the S&P 500 logged a double-digit gain. Historically, that type of performance has been a precursor to further increases in stocks by the end of the year. Our study of seasonal stock market returns identified 16 first-half periods since 1980 during which the S&P 500 rose at least 10% (in fact, the average gain was 15.8%). The average S&P 500 return in the second half of those years was 7.3%.” Plus, election years have historically seen rallies post-election. That said, I believe during the lead up to the election in the back of Q3 the markets will be especially choppy as investors and traders jockey back and forth on headlines and polls trying to gleam the yet unknown result of the election. In my experience, unless someone is near-perfect in their trades, it’s usually been better to simply ride through the chop and look to pick up shares of highest-conviction ideas on days of “panic”. This is a key reason why I like to keep a chunk of cash in accounts when heading into volatility. As I said in ‘Interjections’, “I expect rates will remain high and cash will offer attractive rates still making it a warm and cozy place to possibly hide-out during the drama ahead of the election. Barring a drawn-out election like we had in 2000 (hanging chad’s ring a bell), markets historically have gained once they know the make-up of Congress and the White House.”
In celebration of the birthday of America on July 4th this Wednesday
I’m again sharing this inspiring video of the history of the Star Spangled Banner (written in 1814 by Francis Scott Key) as rarely is told. I have watched this numerous times and still get chills each time. You’ll likely not forget this 8mins of audio with images once you listen to it. While it focusses on the commonly sung 1st Verse of the song, it pains me to see so much angst over lyrics in our national anthem (3rd verse) that seems as much from ignorance as misinformation. If you’re not familiar with all of the verses of the Star Spangled Banner beyond the first verse, please read below along with historical meaning of the verse per www.American-Historama.org.
Star Spangled Banner Lyrics Verse 2
On the shore, dimly seen through the mists of the deep,
Where the foe’s haughty host in dread silence reposes,
What is that which the breeze, o’er the towering steep,
As it fitfully blows, half conceals, half discloses?
Now it catches the gleam of the morning’s first beam,
In full glory reflected now shines in the stream:
‘Tis the star-spangled banner! Oh long may it wave
O’er the land of the free and the home of the brave!
Meaning of Star Spangled Banner Lyrics Verse 2
● Francis Scott Key was describing the perspective from the land as American looked out to hazy images of the British ships
● The ‘foe’s haughty host’ lyrics describe the vessels of the arrogant British
● The lyrics ‘dread silence reposes’ express the view of the ships that look quiet and still as if resting, but are actually a hive of terrifying activity
● Francis Scott Key describes the high vertical position of the flag over Fort Henry in the lyrics ‘o’er the towering steep’ and the movement of the flag blowing in the wind, concealing then revealing the Star Spangled Banner
● The sun comes out and clearly shines on the Star Spangled Banner, ‘in full glory’ lyrics express the grandeur of the flag and a religious connotation
● Francis Scott Key almost makes the Star Spangled Banner lyrics ‘cheer’ using the patriotic words “Tis the star-spangled banner! Oh long may it wave. O’er the land of the free and the home of the brave!”
● Meaning of Star Spangled Banner Lyrics Verse 2
Star Spangled Banner Lyrics Verse 3
And where is that band who so vauntingly swore
That the havoc of war and the battle’s confusion,
A home and a country should leave us no more!
Their blood has washed out their foul footsteps’ pollution.
No refuge could save the hireling and slave
From the terror of flight, or the gloom of the grave:
And the star-spangled banner in triumph doth wave
O’er the land of the free and the home of the brave!
Meaning of Star Spangled Banner Lyrics Verse 3
● Francis Scott Key describes the British as arrogant and boastful in the lyrics ‘that band who so vauntingly swore’
● He is venting his anger at the British with the “foul footsteps’ pollution” lyrics inferring that the British poisoned the ground on which they walked
● But the poison and corruption had been washed away by the blood of the British
● The Star Spangled Banner lyrics “the hireling ” refers to the British use of Mercenaries (e.g. German Hessians and African-Americans who fought for the British) in the American War of Independence
● The Star Spangled Banner lyrics “…and slave” is a direct reference to the British practice of Impressment (kidnapping American seamen and forcing them into service on British man-of war ships). This was a major cause of the War of 1812
● Francis Scott Key then describes the Star Spangled Banner as a symbol of triumph over all adversity
Star Spangled Banner Lyrics Verse 4
Oh! thus be it ever, when freemen shall stand
Between their loved home and the war’s desolation!
Blest with victory and peace, may the heav’n rescued land
Praise the Power that hath made and preserved us a nation.
Then conquer we must, when our cause it is just,
And this be our motto: “In God is our trust.”
And the star-spangled banner in triumph shall wave
O’er the land of the free and the home of the brave!
The 4th of July is holiday marking the birth of the American Experiment: a government of the people, by the people for the people.
Happy Birthday USA and Happy 4th of July to you.
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