Red, White, and Boozed – Celebrating July 4th in the Market

Happy Birthday America! Today we celebrate our Independence Day, and it doesn’t matter if you spend your day watching Will Smith protect us from aliens, Team America head over to North Korea, Optimus Prime battle the Decepticons, or take a totally different direction and spend your day volunteering with one of the many charities in your community, we wish you a Happy 4th.

The stock market is closed today, (July 4th, 2018), and yesterday (4/3) was a shortened trading day, but there are still some things we can take a look at in between flipping burgers and cracking open a cold drink on this freedom filled day.

Over 216M Americans (roughly 87% of the population) plan to observe July 4th (we can maybe assume 100% would observe but some people will get stuck at work, so throw down an extra hot dog for them), and consumer spending today will be just shy of the $7B mark ($6.9B to be exact). That’s quite a bit of ground beef or compressed meat, so we hope that at least some of that get spent on (legal) explosives, drinks, and maybe a new backyard pool.

This massive spending day is the second highest, and dips from last year’s record $7.1B due to rising gas prices and you know, the middle of the week.

When looking at some trading opportunities, we found some American companies you can take a look at, and even some ETF’s that track consumer staples.

ETF’s

  • XLP | $51.35
    • The Consumer Staples Select Sector SPDR Fund tracks a market-cap-weighted index of consumer-staples stocks drawn from the S&P 500.
  • RTH | $99.84
    • The VanEck Vectors Retail ETF tracks a market-cap-weighted index of the 25 largest US-listed companies that derive most of their revenue from retail.
  • PEJ | $46.54
    • The Invesco Dynamic Leisure and Entertainment ETF tracks a multifactor, tiered equal-weighted index of U.S. entertainment and leisure industry stocks.
  • PSL | $70.65
    • The Invesco DWA Consumer Staples Momentum Portfolio tracks an index of US consumer cyclical firms selected and weighted by price momentum.

Equity Stocks

Some of our favorite “true blue” American stocks are companies started in America and have a unique affiity to consumers. You might not be able to individually trade a hamburger, or an apple pie with ice cream on the stock market, but these shares come dangerously close to having a bald eagle screech everytime you hit “trade.”

  • Ford (F)
    • An American classic, from the almost instantly recognizable Mustang, to the road warrior F150, this brand even helps supply the vast majority of police cruisers.
    • Helped create and revolutionize the automotive industry in 1903 with Henry Ford’s introduction of the assembly line, and ushering in the golden age of American manufacturing
    • Be on the lookout for how well Mustangs, F150’s, and the new Bronco sell. Ford is cutting the majority of its cars to help streamline manufacturing, and hopefully help boost the bottom line
  • Walt-Disney (DIS)
    • A little cartoon mouse is now the biggest name in entertainment, with Bob Iger at the helm. Disney seems unstoppable, with it’s Marvel and Star Wars franchises bringing in billions to the bottom line, and sports networks like ESPN continuing to dominate.
    • The new bidding war with Comcast for Fox assets is heating up, with DIS adding cash to the already heaping piles of cash it’s offering for Fox’s assets, which include a significant controlling stake in Hulu, the video streaming service
  • The Hershey Company (HSY)
    • Having been made synonymous with summer, the Hershey brand is all about fun, chocolate, and the staple of a fantastic s’more since 1894
    • HSY might be down 16% YTD, but keeping in mind that they have a solid dividend yield, and are a decent defensive play, since no matter what the economy does, everyone will still have a few bucks for a chocolate bar
    • Still have their HQ in Hershey, PA, which was named after the company, not vice versa
  • Brown Forman (BF-A, BF-B)
    • Looking at the company, you might not recognize it. Take a peek at their brand pages, and you’ll immediately recognize none other than Jack Daniels whiskey
    • Brewed in Lynchburg, TN for more than 150 years, they still use the same “charcoal mellowing process” used since founding
    • They were the first registered distiller in the US, and still continue to be sold around the world

And last but not least, the two most recognizable American brands across the globe:

  • McDonalds (MCD)
    • Coupled with Mickey Mouse, McDonalds has one of the most recognizable mascots in the world, Ronald McDonald
    • Ushered in the age of fast food, and quick service restaurants, founded by the McDonald brothers, and popularized by Ray Kroc
    • $123B market cap, with $22B in sales a quarter, they sell 75 hamburgers a second, and feed 68 million people per day (~1% of the world’s population)
    • About 1 in 8 American workers has been employed by McDonalds
    • Recently the stock has slid, but we remain bullish on MCD because of streamlining, and slinging some competition towards Wendy’s (WEN)
  • Coca-Cola (KO)
    • Voted the most recognizable brand world-wide, Coca-Cola fever reaches to every corner of the globe, and is sold in every country except Cuba and North Korea, due to trade embargoes. But who knows, maybe we could see a Coca Cola machine in NK due to trade relations
    • Coca-Cola originally contained cocaine in it, and was one of the only companies with DEA clearance to be able to process the coca leaf. Now, they get a cocaine free coca leaf extract prepared at a Stepan Company plant in New Jersey
    • A native company to Georgia, with roots running deep in America and the south

We hope you enjoyed our round-up of American companies, and wish you a safe and happy 4th of July. Please remember to hang out with your pets tonight as the most pets are reported missing today because of being scared from the fireworks. Don’t drink and drive, call an Uber. Stay Safe and enjoy today!

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