I was planning on expounding at length here regarding the market’s response to the bombing of Iran’s nuclear facilities, but given I’m writing this the week of the 4th of July, I thought we should zoom out a bit. Nevertheless, I cannot resist the urge to briefly comment on the markets the last week of June. The Saturday previously, a few B2 bombers dropped bunker buster bombs on Iran’s nuclear facilities. If you made the mistake of logging into the financial news/blogosphere/media/X the following day, you would have been greeted by a cacophony of doom that would have made Malthus blush. The opinions were unanimous: oil was going parabolic, the Strait of Hormuz would be closed, an oil spike induced recession was around the corner, possibly followed by World War III.
Of course, the S&P 500 then closed Monday +0.96%. Every sector was higher on the day except… energy. Oil finished the day down 2.53%. The S&P 500 closed the week at a record high. A heuristic we (jokingly) find useful: whenever people that couldn’t identify the Strait of Hormuz on a map yesterday are discussing it as if they’ve long known its economic significance, just go ahead and buy stocks.
On to more important matters on this marvelous week: America. The scrappy colony that earned its independence through blood and sweat and continued bleeding and sweating en route to becoming the global superpower in less than two centuries. Our history is not one free of setbacks. Our future certainly won’t be either. Nevertheless, as investors we must invest through an uncertain future mired by inevitable challenges. A quick story to keep in mind…
The ‘70s were not particularly kind to America. The S&P 500 peaked at 120 in 1973, fell roughly 50%, and failed to reach a new high until the early ‘80s. Inflation averaged 7% annualized over the course of the decade and peaked at 13.5%. Economic growth fell even as inflation rose – stagflation – an economist’s worst nightmare. Nixon implemented wage and price controls. The nation endured the twin embarrassments of Watergate and the ignominious fall of Saigon. OPEC implemented an oil embargo on the US, quadrupling oil prices virtually overnight. Gas shortages led to fuel rationing.
All was not going well economically on the surface in the USA. But beneath the surface a different story was brewing…
In 1975, Bill Gates and Paul Allen founded Microsoft. The next year, Steve Jobs founded Apple. Those two scrappy companies today – founded amidst one of America’s worst economic periods in the postwar era – now have a combined market capitalization of $6.76 trillion dollars.* That number is notable because it is the same as total US GDP the year Gates and Allen founded Microsoft (after adjusting for inflation). If there is a better anecdote displaying the grit and resourcefulness of our great country I have yet to find it. Even during her worst struggles, America’s seeds of ingenuity are being planted. While enduring recession and stagflation, two companies were founded whose combined market capitalization alone would eventually eclipse the value of all goods and services produced in the entire country at the time of their origin.
Human ingenuity is undefeated. And no place fosters homegrown ingenuity like the United States of America. Always has been and always will be. I suspect by the end of my career the greatest companies in our portfolios will be firms none of us are presently aware of. They are currently in their gestational period, their bright future of becoming household names and compounding capital at record levels for shareholders remains ahead. We look forward to participating in that bright future together.
Never, ever bet against America. We hope you had a happy Fourth of July.
Sean Cawley, CFP®
*Billions and trillions are difficult for our minds to comprehend. For context – one billion seconds comes out to just under 32 years. Anyone born in the early 90s has lived about a billion seconds, give or take. One trillion seconds? 31,710 years – about six times longer than all recorded human history.
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This commentary reflects the personal opinions, viewpoints, and analyses of Resolute Wealth Management. It does not necessarily represent those of RFG Advisory, clients, or employees. This commentary should be regarded as a description of advisory services provided by Resolute Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.
Sources:
https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
Credit to Nick Murray, whose July 2025 newsletter inspired this month’s From the Resolute Desk piece.
AAPL & MSFT Market Cap – YCharts, 7/1/25.