Postcards: Your Second Half Guide

Welcome to the Second Half of 2024... in an election year... where all of your dreams come true. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ 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: Your Second Half Guide]( Welcome to the Second Half of 2024... in an election year... where all of your dreams come true. [Garrett {NAME}](floridarepublic) Jul 1 floridarepublic   [READ IN APP](   [Republic Risk Readers Visit Here]( Dear Fellow Expat: Welcome to the COVID capital of America… a kingsize bed somewhere in the middle of Baltimore County. This was a mild case, but a rather interesting way to start my next 75 days of diet. I appreciate the kickstart, but it wasn’t supposed to be this way. For the last 24 hours, my family has treated me like I have the plague. My daughter runs away from me, and my wife screams “Put on a Mask” whenever I open the door. As if breathing in your own C02 and COVID over and over again will in any way make the “Profit Center” healthier. We kick off the second half of the year - and start with positive price action in the wake of the French elections. Markets in Europe like the news that Le Pen has won this round - and sent Emmanuel Macron to third place. Here in the U.S. the markets are now increasingly pricing in a Trump victory. Across all potential replacements for Biden in the wake of his debate performance, Trump holds a lead against all potential contenders. Meanwhile, the Democratic Party is likely to face a significant amount of infighting with the children fighting over the inheritance, while the father refuses to step down. Seems like they made an HBO show about this. Let’s have a preview of the second half of the year… More of the Same The next two weeks are historically the best for the market… since 1928, according to Goldman Sachs. But what comes after this? You know how I think… [I am in agreement with Michael Howell]( global liquidity is driving risk asset prices higher. And on the surface, it’s not that complicated. Create lots of capital and debt - and that money will find its way into the equity markets. There’s still lots of time here for an expansion into next year - and a melt-up to 6,000. More money… means more capital flowing to tech. That’s just how it goes. While markets expected a bigger downturn, the reality is that the Fed has provided ample support to the financial markets. We haven’t seen any radical changes in reserves, and the Treasury Department has been acting as a tool instead of a manager. All the while, the U.S. is borrowing money at a remarkable rate - only to print about half the growth from the borrowing. The large institutions keep saying that hte U.S. economy is resilient… but the real resiliency is the ability for the government to keep borrowing at these rates, and still have people confident enough that they will generate a return on their investment. But there’s the other major driver that people [FINALLY started to accept this year.]( It’s the fact that passive investing has put so much of this market on autopilot. Only when we see liquidity events and concerns about collateral quality do we see a bigger selloff in these Mega Cap stocks that are driving the market higher. The underbelly of the market will likely remain under pressure for the duration of the year. Higher interest rates for longer are set to push a lot of Zombie stocks lower as they struggle with payments. All the while, I don’t foresee many new IPOs on the horizon to replace companies that are being taken private (it’s a fantastic time to take companies private or engage in M&A). Dollar Strength Will Continue The U.S. dollar remains strong, and will likely remain strong through the balance of the year. This will help keep oil prices in check, and will offer some resistance to gold and silver prices moving into breakout territory. It’s hard to see gold and silver moving higher in an exponential level now with global demand for the dollar continuing. AI Artificial Intelligence will continue to drive the markets… no doubt there. The question remains liquidity and how investors continue to behave around rebalancing. I wouldn’t be shocked to see NVDA blow out to around $170 by the end of the year due to this insane feedback loop. But I’m not one for chasing things in any environment. If that’s for you, use the 20-day moving average as an entry and exit… little more. What’s Up with the Fed? I maintain my same prediction: No rate cut in 2024 (80%), one cut (20%). I expect that the Fed will have to hike rates again in 2025. Inflation and yields will remain elevated through the end of the year, and it’s fair to expect official inflation (the one they cook but can’t cook no more) to come in around 3%. The reason for this is strong labor demand and housing supply limitations. Over the weekend, another story we’ve been covering did get a lot of attention at Bloomberg. That’s the weaponization of the Yen against the Chinese Yuan. With Jerome Powell in charge, this battle will likely continue. But it’s hard to tell if a President Trump would allow Powell to stay, or he’d seek a new voice in the role of Federal Reserve. [I don’t know how true this is]( but there’s already reports that Art Laffer could become Fed chair. Of the three names that the Journal floated, [Warsh is likely the one]( that would maintain the greatest independence. There are plenty of wildcards now in the U.S. economy. Our regulatory world has been changed dramatically in the last week with the Supreme Court’s decision on the Chevron Deference. This turns the world of Executive Agencies upside down, and it’s hard to tell how this impacts almost everything in Washington moving forward. That said, states will again have more sway over their rules… This is a major story heading into 2025. Finally The S&P 500 returned 15% in the first half, but our core January 2024 portfolio returned more than 17%. We also beat the Weighted S&P 500 on the aggregate. Our weighted portfolo was 10.1% compared to the Weighted S&P 500’s 4.1%. We just released our newest portfolio of seven stocks - but we will be taking a more active approach this time to take advantage of technical moves in the market. For example, one of the stocks that came in flat this year from that portfolio was PBF Energy (PBF) which we recommended in the mid $40s. It ran to $62, before falling back under its $20-day moving average. It finished flat. This time we will use our metrics to identify breakouts, but take gains as they break under momentum levels. This will give us more opportunities to explore other potential picks and look for a better return overall. [Get 20% off for 1 year]( Sign up for the year because annual buyers will have full access to all new products when we complete our conversion to Marketwise. 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]()