Forgive me if my cadence is off a bit; my main excuse is a Juneteenth hangover. Rendered more unpleasant by the reality that the holiday, in addition to transpiring, as always, on the pen-penultimate day before the Summer Solstice (longest day of the year and hopefully ushering in a sizzling summer that we’ve all richly earned), but also occurring this year on a Thursday, setting the table for a 4-day weekend extravaganza. Which, of course, was disordered by – what else – the latest Trumpian disruptions (alas, more about this below).
Anyway, Juneteenth does not frame itself as an over-joyous blowout celebration, honoring, as it does, now, what was it? Oh yeah. The freeing of some slaves in Texas on June 19, 1865. But it was neither the beginning (Emancipation Proclamation – Effective Date January 1, 1863), nor the conclusion (13th Amendment – Enacted December 18, 1865) of the elimination of Indentured Servitude in this country. Rather, it was a weigh station near the end of the process.
But hey, why not throw a party anyway? And while we’re at it, shut down the government, the financial system and other elements of the economy to further enable the buzz? To me, it is somewhat similar to such calendar dates as National Penguin Day (January 20th), National Fried Rice Day (August 20th), and my favorite (perhaps because it happens on my birthday) National Chicken Lady Day (November 4th).
By my count, and according to the oracle on the subject – calendarr.com – there are no fewer than one thousand of these ritualistic honoraria, or, approximately, 3 per spin on the earthly axis.
Some of these, of course, are more important than others, and on those we pause most of our activities in associated tribute. There is, of course, Christmas, Thanksgiving, New Years Day, MLK Day, as well as Memorial, Labor, Veterans and Columbus Day. Time was, the birthdays of both Washington and Lincoln were designated as separate holidays, but at some point (and seeing as how both were born in February), we combined them into a single, tidy, Presidents Day.
As of 2021, Juneteenth has joined these august ranks. So be it.
I don’t want to piss anyone off, but this sort of thing rankles me, as I feel it exemplifies American hypocrisy at its worst. On Thursday, we issued and listened to endless platitudes about past evils, and pledges of better goodwill in the present/future. We then filled our coolers and went to the beach.
Meantime, black women still earn only $2 for every $3 paid to white men. The poverty rate among black Americans remains double that of Caucasians. The former’s likelihood of earning a college degree is barely half of that of the latter.
As the divine, recently departed Sly Stone would say “and so on and so on and shoobie doobie doo”.
And I feel that there are so many better ways to address these inequities. For example, rather than shutting down the (admittedly variable) engines of productivity, why not keep them churning and allocate whatever they yield to the creation of opportunities for those who (and I freely admit this) are still suffering from that barbaric practice that ended a mere 16 decades ago?
The means to do so, by harnessing the awesome power of our economy are abundant.
As one example, both pertinent and clean, is the prospect of re-allocating the Thursday’s foregone profits from Wall Street trading desks. As illustrated in the following graphic, it’s fat times in these realms:
Just 3 trading desks, in other words, generated ~$12B of profits in Q1/’25. As measured against the 60 trading days in a quarter, had they been open and performed up to average, instead of $0 they were compelled, by GAAP to record, their P/L would have been ~$200M. Which would build any number of schools, improve dilapidated housing and transportation facilities, and probably still leave some extra cash to invest in training, the care of the indigent, the provision of shelter for battered women…
Consider, if you’re still with me, the expansion of the concept to the broader economy. The Mag 7 daily Q1 profit approaches $3B. And, if government wanted to get into the act, the Federal Payroll:
~$300B/year could toss in > $1B itself.
My company is willing to participate as well and can perhaps add enough to toss a few cases of Red Bull into the till.
Instead, we throw a party. And congratulate ourselves for so doing.
But as with sands in the hourglass, Juneteenth ’25 has passed into history. And it was on to more important dates. There is, for instance, June 20th, which I have rebranded Junetieth. When the above- mentioned engines began running again. And will do so for the next two weeks, ere they shut down anew – in honor of Independence Day.
And I submit that while it is vital from time to time to reflect, and yes, celebrate, it is the resurrection of our active selves upon which our destinies depend. In this sense, Junetieth joins a pantheon of calendar dates that include January 2nd, Black Friday, July 5th, and yes even Seis de Mayo (May 6th).
This year’s Junetieth – particularly for the markets — was a fairly bland affair. And it’s not hard to understand why. All year, we have migrated from one self-imposed crisis to another. Tariffs dominated our awareness all Winter. Then there was Immigration and Deportation. This, of course, was followed by mass protests and associated government response.
All of which recently got blown out of the headlines the bombing war between Iran, Israel and now, the U.S.
So, no one knows exactly where we stand. And we’re not likely to be enlightened much over the next three weeks. This coming one is data-light, with not much on the docket other than a few PMIs and some (potentially dismal) Housing metrics. The week that follows is barely more than a runup to Independence Day, which, this year, transpires on a Friday.
All of which is obliterated by Saturday night’s bombing expedition. Not gonna lie – this is a tough one. Given my pre-dispositions, I am inclined to support it. Them mullahs mean us no good, and, left to their own devices, come what may, will do their darndest to wreak havoc. Their first target, of course, would be Israel – a country to for which, due to ties of blood and sentiment, I retain a soft spot.
But let’s not kid ourselves. We’ve just bought ourselves a passel of trouble. Increased threat of Domestic Terrorism, the mining of the Strait of Hormuz (already in place), and, perhaps most importantly, the uncertain reaction of countries such as China and Russia is all now in wretched play.
And I don’t believe that we will attain any clarity – for weeks, if not months or longer. In terms of market risks, the main one which comes to mind is obviously the impact on the Energy Complex. The scenario I find most troubling is that the mullahs react with defiance (likely) and respond aggressively against American targets (highly possible). If so, it’s pretty clear to me that the Administration will up the ante, most likely by disabling Iranian Oil production capacity. Which the markets won’t like. Nor will the Chinese. Moreover, the timing of this next descending piece of footwear is unknowable. All could unfold quickly, or, perhaps, on a delayed timer.
It’s very difficult to form a cogent investment strategy in the wake of these crosswinds.
But whatever happens in the vaunted Equity Complex, I’d keep a close eye on ALL Commodities as well. If trouble indeed is headed our way, they – particularly (aside from Oil) Metals, Softs, Shipping Costs, and (importantly) Fertilizer could all leap heavenward. And if you doubt the impact of the last of these, consider the recent price action (prior to the Saturday night action) in the Potash markets:
All of which, among other matters, could goose Inflation and obliterate those dewy dreams of Fed Rate cuts – this summer or maybe for eons beyond its fading to autumn.
All of which gives me pause respecting our weekly theme. Maybe instead of fewer Juneteenths and more Juntieths, the reverse is the preferable construct. Them Texas slaves only got themselves freed once, but today is a new day, June Twentithirdieth, which the calendar shows also to be (I kid you not) National Pink Day, National Hydration Day, International Women in Engineering Day, National Typewriter Day, and, most importantly, National Let It Go Day.
With respect to the last of these, if only we could…
TIMSHEL