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Quote of the Day

“The advice we have given important corporations can be followed to advantage by all classes of investors. We do not urge that you sell securities indiscriminately, but we do advise in no uncertain terms that you take advantage of the present high prices and put your own financial house in order. We recommend that you sell enough securities to lighten your obligations”

-Charles Merrill, in a letter to Merrill Lynch clients on May 31st, 1928.  Charles Merrill founded what is now known as Merrill Lynch (now owned by Bank of America). He was known for bringing “Wall Street to Main Street”, and I think this quote helps show how much he cared for the small investor. As the euphoria of the late 20’s raged on, he advised his clients not to invest more with his firm, but “get their house in order”. The advice would be timeless, as the great depression would hit just a year later.

On this day in 1971, shares of Merrill Lynch first traded on the New York Stock Exchange.

July 27th – This Day in Stock Market History

July 27th, 1914 – 1 month after the assassination of Archduke Franz Ferdinand, Austria invades Serbia, igniting World War 1.

Prior to this day, the U.S. stock market had very little reaction to the assassination of Franz Ferdinand. However, U.S. stocks would sell off 3.5% once trading resumed on July 28th.

Panic would quickly reach the New York Stock Exchange. After a 3.5% drop on July 28th, stocks would fall an additional 6.9% on the 30th on news that Russia was mobilizing its 1.2 million man army along its boarder.

Then on July 31st, as it seems likely that Germany would declare war on Russia, the New York Stock Exchange would shut its doors. The exchange would remain closed until December 15th – The longest shutdown in the New York Stock Exchange’s history.

July 27th, 1953 – Korean Armistice signed, ending the 3 year conflict.

The Dow Jones Industrial Average initially dropped at the onset of the Korean War on June 25th, 1950. But after the onset of the war, stocks would rise slowly through the end of the war on this day in 1953:

Dow_Jones_Chart_Korean_War

Chart from Macrotrends

After the armistice was signed, U.S. stock markets would double over the next 3 years.

July 27th, 1971 – Merrill Lynch shares are first listed on the New York Stock Exchange for 38 1/4 a share.

Merrill Lynch shares listed on the big board, as covered by the New York Times
Merrill Lynch shares listed on the big board, as covered by the New York Times

The company would ultimately be sold to Bank of America on September 14th, 2008 for a price of $50 billion.

TreasuryToday has a great writeup on Charles Merrill (and is the source for our quote of the day above), here: Charles E. Merrill

July 27th, 1998 – Russian stocks fall 9%, at the time the largest 1 day decline for the nation’s index ever, as excitement over Russia’s loan package with the IMF (announced July 16th) wears off.

The nation would default on its debt on August 17th, 1998.

Source: Panic, Prosperity, and Progress: Five Centuries of History and the Markets

Best July 27th in Dow Jones Industrial Average History

1932 – Up 4.69%, 2.30 points.

Worst July 27th in Dow Jones Industrial Average History

1923 – Down 2.95%, 2.69 points.

<– Go To Previous Day: July 26th, 2018: Facebook stock falls 18%, wiping $119 billion off of its value.

Go To Next Day: July 28th, 1971: Wells Fargo launches the first index fund –>