Postcards: Happy Independence Day

We hope you enjoy this sovereign holiday as we return to the markets tomorrow. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Happy Independence Day]( We hope you enjoy this sovereign holiday as we return to the markets tomorrow. [Garrett {NAME}](floridarepublic) Jul 4 floridarepublic   [READ IN APP](   Dear Fellow Expat: As I come to the end of COVID, my family is paying attention to me again. My daughter - who suddenly looks a year older after our travels to Europe - just came into the bedroom and asked me a question I wasn’t expecting… “How much do I sell my lemonade for?” she asked. It seems that she has been talking about small businesses in the last four days of my absence. But there hasn’t been a guiding hand to explain profit margins, marketing costs, inputs, and “location.” Amelia doesn’t have any lemonade for mass production. She planned to take a half bottle of store-bought lemonade and start slinging it on the street corner. You know, like a bunch of loose cigarettes. In the mean streets of Timonium, Maryland, full of people who’d probably call the cops if she is out there too long, the sale of Tropicana lemonade without a permit probably won’t fly. So - we have to do this the right way. My wife recommended that Amelia set up a stand by the neighborhood entrance. But there’s no parking. So, we have to talk about the lacrosse field across the street during weekend games or finding a place near most houses. We have to discuss what sort of lemonade mix she’s using. Is she using real lemons (which are expensive), or is it some sort of mix from around the store? What about ice? What about cups? What’s she naming this stand? “Amelia’s Stand?” Come on, kid… get off my curb. It’s Independence Day… know your audience… "Liberty Lemonade: Sweet Freedom in Every Sip!" We are now at this age… I wasn’t expecting it yet… but here we are. She’ll be in the basement making posters. She keeps asking how much she should charge… but we’re not there yet. We have to talk about production costs. We’ve got a long way to go… [Upgrade to paid]( Speaking of Input Costs This is a gentle reminder that earnings season starts NEXT WEEK. With earnings season comes a temporary end to this insane Magnificent Seven rally that dominated the second quarter. As forecasts loom and questions about the economy accelerate, it’s time to start thinking about where capital is likely to rotate. The expected numbers this quarter are lofty. We’re talking an aggregate expectation of 9% - setting the highest bar in three years. That’s back during COVID-19… when the government dropped money from the sky. If you recall 2021, the top of the S&P 500 drove the market through the year's balance, leaving the Bottom 490 of the Index and the Russell 2000 in the dust. We’ve seen similar behavior before. That eventually stops - and the Institutional argument goes that inflation is coming down while Keynesian economic growth (the basis of market analysis) is performing well enough that investors can justify risk-off behavior. Over the last decade… the market has been driven by relentless Fed intervention, low interest rates, and global liquidity. But earnings do eventually have to play a role. This is the quarter that earnings need to show up to keep this trajectory going - and many companies have taken a hit in recent months - that will likely show up big in the next few months. Cough… SHIPPING… Cough… MIDSTREAM ENERGY… Cough… GLP-1 Drugs… But all the while… we have to be cautious. We haven’t had a 5% pullback since October… There will be fireworks in the weeks ahead. Enjoy your holiday… Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()