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Bill’s By The Number$

1. HALF MISSED OUT – The S&P 500 gained +12.0% (total return) in 2016, higher than the index’s trailing 50-year average performance of +10.2% per year. An estimated 52% of American adults were invested in the US stock market last year, either in personal accounts or through their retirement portfolios. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: Gallup).

2. HUGE – The US stock market was worth $25.3 trillion as of 12/31/16. The S&P 500 comprises 80% of the total US stock market capitalization as of 12/31/16, equal to $20.2 trillion (source: BTN Research).

3. NOT A GREAT PATTERN – The last Republican president who was voted into office to begin his time as POTUS who did not suffer through a recession within 18 months of his inauguration was Warren G. Harding, our country’s # 29 president who served from 1921-23 before dying of a heart attack (source: BTN Research).

4. WEALTH – The richest 1% of individuals in the world have a collective net worth that exceeds the collective net worth of the other 99% of people in the world (source: Oxfam International).

5. HAS BEEN LOWER – Inflation (as measured by the Consumer Price Index) advanced by +2.1% during 2016. Inflation in 2015 (+0.7%) and 2014 (+0.8%) were 2 of the 3 lowest rates of annual inflation in the United States in the last 50 years, i.e., 1967-2016 (source: Department of Labor).

6. THE EFFECT BEFORE AND NOW – The S&P 500 lost 9.1% (total return) in the 24 trading days after the Federal Reserve raised short-term interest rates for the first time in 9 ½ years on 12/16/15, i.e., the 24 trading days from 12/17/15 through Friday 1/22/16. The S&P 500 has gained +1.0% (total return) in the 24 trading days since the Federal Reserve raised short-term interest rates again on 12/14/16, i.e., the 24 trading days from 12/15/16 through last Friday 1/20/17 (source: BTN Research).

7. IMPACT ON OUR INTEREST RATES? – China has cut its holdings of US Treasuries to $1.05 trillion as of November 2016, its lowest level since May 2010. Since peaking at $1.32 trillion in November 2013, the Chinese have sold $267 billion of Treasuries in an effort to support its own currency (source: Treasury Department).

8. REMITTANCE – The Fed had profits of $92.0 billion in 2016 (to be returned to the Treasury Department), largely from interest income on the $3.7 trillion of Treasury notes and bonds purchased during the 6 years of “quantitative easing” (QE) that ended on 10/31/14. Over the last 8 calendar years (2009-2016), the Fed has returned $657 billion to the Treasury Department, equal to $82 billion a year. Over the 18 years prior to QE (i.e., 1991-2008), the Fed returned an average of just $19 billion a year to the Treasury (source: Federal Reserve).

9. YOU ARE REPLACEABLE – Although just 5% of occupations consist of activities that are 100% automatable, i.e., they could be replaced entirely by technology or robots, 60% of all occupations have at least 30% of their daily activities that are automatable (source: McKinsey Global Institute).

10. WHAT IF? – The average interest rate paid by the government on its interest bearing debt was 2.232% as of 12/31/16, less than half of the 5.034% paid as of 12/31/06, i.e., 10 years ago (source: Treasury Department).

11. LET’S GO – For every 2 families that moved into South Dakota last year, just 1 family moved out, making South Dakota the “top moving destination” state. For every 1 family that moved into New Jersey last year, 2 families moved out, placing New Jersey last on the same list (source: United Van Lines).

12. TWINS? – A child born in 2015 will cost a higher-income family (defined as those making at least $107,400 of before-tax income) $372,210 in 2015 dollars (i.e., a present value amount) and $454,770 in inflation adjusted dollars over the first 17 years of the child’s life, i.e., not including college (source: Department of Agriculture).

13. NOT NEEDED – Chuck Grassley (R-IA), the Chairman of the Senate Judiciary Committee, did not go to law school. Grassley is the 1st chair of the committee in history not to have a law degree (source: Congress).

14. TWO SUCCESSFUL PRESIDENTS – When Abraham Lincoln (R-IL) won the 1860 presidential election, he got just 39.8% of the popular vote. Lincoln received 55.0% of the popular vote when he won the 1864 election. When Bill Clinton (D-AR) won the 1992 presidential election, he got just 43.0% of the popular vote. Clinton received 49.2% of the popular vote when he won the 1996 election (source: PresidentElect.us).

15. FETE – President Obama welcomed 86 championship athletic teams to the White House during his 8 years in office, an average of 1 every 5 weeks. The last team to visit: the Chicago Cubs (source: Washington Examiner).

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Copyright © 2017 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. NEW POTUS – In the 45 trading days since the 11/08/16 presidential election, the S&P 500 has gained +6.7% on a total return basis. Donald Trump will be sworn in as POTUS # 45 this Friday 1/20/17, the first president in our 241-year history with no government or military background. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. NOT TOGETHER – The total return of stocks and the total return of bonds have not been negative in the same year at any time over the last 40 years, i.e., 1977-2016. The S&P 500 index was used as the stock measurement. The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).

3. MY DAY, YOUR YEAR – The worst day for the S&P 500 in 2016 (a total return loss of 3.6% on 6/24/16) is a greater loss than the worst year for the bond market at any time over the last 40 years, i.e., 1977-2016. The Bloomberg Barclays Aggregate bond index was used as the bond measurement (source: BTN Research).

4. HAND OVER THE KEYS – Lenders foreclosed on 379,437 homes in calendar year 2016 (an average of 1,037 per day), down 16% from calendar year 2015’s total (449,900) and down 64% from the number of foreclosures (1,050,500) that occurred in calendar year 2010 (source: RealtyTrac).

5. SPOILED ROTTEN GRANDKIDS – 43.8 million Americans (out of our 324 million citizens) have outstanding college loans, including 2.8 million individuals at least age 60. Only 27% of the 2.8 million seniors borrowed the money for their own education (source: Consumer Financial Protection Bureau).

6. MORE THAN HALF THE STATES – Kentucky became the 27th state to enact a “right-to-work” law, passing its bill on Saturday 1/07/17. “Right-to-work” laws allow workers to “opt-out” of the payment of union dues as a condition of employment at a company. The legislation also bans a union from firing a worker who refuses to pay union dues. Kentucky is the 5th state to pass such legislation since 2012, after only 2 states had done so in the prior 30 years (source: Wall Street Journal).

7. ESTATE TAXES – The federal estate tax exemption is $5.49 million as of 1/01/17, i.e., a married couple would be able to shelter $10.98 million from federal estate and gift taxes. Only 0.2% of Americans that are expected to die in 2017 (an estimated 5,200 deaths) will leave estates that will be subject to the payment of federal estate taxes (source: Tax Policy Center).

8. EVERY DAY – The total debt of the United States on 1/20/09 (8 years ago on President Obama’s inauguration date) was $10.627 trillion. The total debt of the United States on 1/12/17 was $19.942 trillion. The increase of $9.315 trillion (over 8 years) is an average daily deficit of $3.2 billion (source: Treasury Department).

9. SLOW GOING – If GDP growth for 2016 that will be reported on Friday 1/27/17 shows growth of less than +3% for the year, it will be a record 11th consecutive year of “sub +3%” growth. The next longest streak in US history of “sub +3%” growth was the 4 years from 1930-1933 (source: Commerce Department).

10. FEWER COLLEGE STUDENTS – There were 19.0 million college students during the fall of 2016 (both undergrads and grad students), the 5th consecutive year (2012-2016) that the total number of students has declined on a year-over-year basis (source: National Student Clearinghouse Research Center).

11. OWN A LOT – The federal government owns 28% of all the land in the United States, including 85% of Nevada and 65% of Utah (source: Congressional Research Service).

12. MOST EVER – Americans purchased a record 17.55 million new cars and light trucks in 2016, the 6th consecutive year of increasing sales for the US auto industry (source: Autodata).

13. PRO-BUSINESS – President-elect Donald Trump’s nominees for Secretary of State, Commerce and Labor have a combined 54 years as president or CEO of American businesses (source: BTN Research).

14. NEW AND OLD – Congress reconvened on Tuesday 1/03/17. The House welcomed 52 new members while the Senate has 7 new members. The average years of service in the House is 9.3 years, just short of the 10.1 years of average experience for senators (source: Congress).

15. TIGERS – Clemson stopped Alabama from winning its 5th national championship in the last 8 college football seasons (2009-16) on 1/09/17. Alabama has gone 100-11 over that 8-year stretch (source: BTN Research).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2017 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. FOR THE ENTIRE YEAR – The S&P 500 was positive on a total return basis during 9 of 12 months in calendar year 2016, gaining +12.0% for the year (including a +5.0% gain following the 11/08/16 presidential election). The raw index rose +9.5% and the impact of reinvested dividends made up the difference. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. THE LONG-TERM AVERAGE – The S&P 500 stock index has gained an average of +10.2% per year (total return) over the last 50 years (i.e., the years 1967-2016). The index has been positive for the last 8 years (9 consecutive “up” years is the all-time record for the S&P 500) and 13 of the last 14 calendar years. The S&P 500 has been up during 40 of the last 50 years, i.e., 80% of the time (source: BTN Research).

3. UP vs. DOWN – The split between “up” and “down” trading days for the S&P 500 over the last 50 years (i.e., 1967-2016, a total of 12,586 trading days) is 53% “up” and 47% “down.” The split during calendar year 2016 (over a total of 252 trading days) was 52/48 (source: BTN Research).

4. INSIDE THE INDEX – 160 of the 500 individual stocks (i.e., 32% of the stocks) in the S&P 500 gained at least +20% in 2016. 39 stocks (i.e., 8% of the stocks) gained at least +40%. 140 stocks (i.e., 28% of the stocks) finished the year with a stock price lower than where it started the year (source: BTN Research).

5. BACK-TO-BACK – The top-performing individual stock in the S&P 500 in 2016 (based upon a +224% gain for the year) was ranked # 4 (out of 500 stocks) in 2015 while gaining +64%. The 2nd-best performing individual stock in the S&P 500 in 2016 (based upon a +133% gain for the year) was ranked # 485 (out of 500 stocks) in 2015 while losing 50%. The 3rd-best performing individual stock in the S&P 500 in 2016 (based upon a +95% gain for the year) was ranked # 494 (out of 500 stocks) in 2015 while losing 71% (source: BTN Research).

6. ONLY ONE DIRECTION TO GO – The top-performing stock in the S&P 500 in 2015 (based upon a +134% gain last year) was ranked # 278 (out of 500 stocks) in 2016 while gaining +8% (source: BTN Research).

7. MISSING THE BEST – The total return for the S&P 500 was a gain of +12.0% (total return) in 2016. If you missed the 3 best percentage gain days last year, the +12.0% gain falls to a +4.4% gain (source: BTN Research).

8. AVOID THE WORST – The total return for the S&P 500 was a gain of +12.0% (total return) in 2016. If you avoided the 3 worst percentage days last year, the +12.0% gain rises to +22.1% gain (source: BTN Research).

9. FROM THE MARCH 2009 LOW – Since dropping to a bear market low on 3/09/09 (i.e., approximately 94 months ago), the S&P 500 stock index has gained +291% (total return) through the close of trading on Friday 12/30/16 or an average gain of +1.5% per month (source: BTN Research).

10. SMALL-CAPS – The small-cap Russell 2000 stock index gained +21.3% (total return) in 2016 (including a +14.3% gain since 10/31/16). The small cap index has gained +10.5% per year over the last 35 years (1982-2016). The Russell 2000 closed at an all-time high on Friday 12/09/16 (1388). The Russell 2000 index is an unmanaged index of small-cap securities which generally involve greater risks (source: Russell).

11. FOREIGN STOCKS – The international stock index EAFE gained +1.0% (total return) in 2016. The EAFE index is an unmanaged index that is generally considered representative of the international stock market. These international securities involve additional risks including currency fluctuations, differing financial accounting standards and possible political and economic volatility (source: BTN Research).

12. THE TEN-YEAR NOTE – The yield on the 10-year Treasury note ended 2016 at 2.44%, just 0.17 percentage points higher than the 2.27% it finished at as of 12/31/15. The yield on the 10-year note was 2.57% on 8/05/11, the day S&P downgraded the USA’s top-rating that it had held for 70 years (source: Treasury Department).

13. HOUSING – The average interest rate nationwide on a 30-year fixed rate mortgage was 4.32% at the end of 2016. The record low national average was 3.31% as of 11/22/12 or just over 4 years ago (source: Freddie Mac).

14. OIL PRICES – The price of oil ended 2016 at $53.72 a barrel, up +45% (and $16.68 a barrel) from its 2015 closing price of $37.04. From a 6/20/14 closing price (i.e., 2 ½ years ago) of $107.26 a barrel, the price of oil had fallen 76% as of 2/11/16 ($26.21) before doubling to $53.72 by the end of 2016 (source: CME Group).

15. OVERSPENDING – The national debt of the United States was $19.879 trillion as of Thursday 12/29/16, an increase of $11.2 trillion (from $8.680 trillion) since 12/29/06 or 10 years ago (source: Treasury Department).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2017 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. OWN A LOT – The federal government owns 28% of all the land in the United States, a total of 640 million acres (source: Congressional Research Service). 1/18/16 issue, # 13 bullet

2. DID NOT NEED COLLEGE – Historically, 33% of college graduates in the United States that are employed are working in jobs that do not require a college degree, i.e., they are “underemployed.” As of result of the 2008 global financial crisis, the percentage of recent college graduates working in jobs that do not require a college degree has climbed to 44% (source: New York Federal Reserve Bank). 2/08/16 issue, # 10 bullet

3. TIGHT CREDIT – If the same credit standards used by lenders in 2001 were used during the 6 years of 2009-14 (i.e., following the 2008 global financial crisis), an additional 5.2 million mortgage loans would have been made, including 1.2 million mortgage loans in 2014 alone (source: Housing Finance Policy Center at the Urban Institute). 2/29/16 issue, # 10 bullet

4. PARTICIPATION – If the USA had 5 unemployed people for every 100 individuals either working or seeking work, the nation’s unemployment rate would be 5%, i.e., 5 divided by 100. If there was 1 additional unemployed person that gave up looking for work, he/she would no longer be counted in the unemployment calculation. Counting that person, the new math would be 6 divided by 101 or 5.9% unemployment rate (source: BTN Research). 3/07/16 issue, # 11 bullet

5. RIPPLE EFFECT – Every 1 physician in the United States supports an additional 14 jobs as a result of his/her medical practice (source: Merritt Hawkins 2014 annual survey). 3/21/16 issue, # 7 bullet

6. THE COST OF BUSINESS – The breakeven oil price for Saudi Arabian oil producers is $7 a barrel. The breakeven oil price for Russian oil producers is $46 a barrel (source: Deutsche Bank). 3/28/16 issue, # 7 bullet

7. JUST A COUPLE LEFT – There were 60 AAA-rated companies by the rating agency S&P in 1980, a number that fell to 30 by 1995, then to 6 in 2008 and down to just 2 top-rated companies as of last week (source: S&P). 5/02/16 issue, # 8 bullet

8. CAN’T GET AHEAD – 45% of the 118 million households in the United States live “paycheck-to-paycheck” (source: National Endowment for Financial Education). 5/09/16 issue, # 10 bullet

9. DIGITAL REVOLUTION – The number of electronic devices that are “connected online” (e.g., laptops, smart phones, cars, appliances, watches, security systems) surpassed the world’s population in 2010. Within 4 years (by 2020), the number of devices and objects that will be “connected online” will reach 50 billion. The globe’s population is 7.3 billion today (source: Federal Trade Commission). 6/06/16 issue, # 11 bullet

10. OVERSTAYED THEIR WELCOME – 45% of the immigrants that are in the United States illegally came into the country legally (for tourism, education or for temporary work) and simply never left (source: Urban Institute). 6/13/16 issue, # 10 bullet

11. TAXES PAID – The top 5% of US taxpayers paid more in federal income taxes ($721 billion) than the bottom 95% of US taxpayers ($511 billion) for the 2013 tax year (source: IRS). 7/25/16 issue, # 10 bullet

12. GREENBACK POWER – 90% of all global trades, including transactions that do not involve an American buyer or seller, are conducted in US dollars (source: Morgan Stanley). 8/15/16 issue, # 14 bullet

13. MORE THAN TWO-THIRDS – The total return of the S&P 500 over the last 5 calendar years (2011-2015) is +80.7% (total return). The best 13 trading days during the 5 years (i.e., 13 days out of 1,258 total trading days) produced a +55.1% gain. Thus, 1% of the trading days over the last 5 years were responsible for 68% of the index’s total return (source: BTN Research). 9/05/16 issue, # 3 bullet

14. DOLLARS IN, DOLLARS OUT – Chicago has more retired policemen and survivors of policemen than they have active police officers. As of 12/31/15, Chicago had 12,061 working policemen but had 12,528 retired officers and survivors of deceased officers (source: Policemen’s Annuity and Benefit Fund of Chicago). 9/12/16 issue, # 3 bullet

15. START SAVING NOW – A child born in 2016 that begins kindergarten in the fall of 2021 would attend college between the years of 2034 and 2038. If that child attended an average public in-state 4-year college and if the annual price increases for public colleges experienced over the last 30 years (+5.5% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would total $227,984 or $56,996 per year (source: College Board). 10/31/16 issue, # 6 bullet

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Copyright © 2016 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. BEST, WORST AND ALL OF THEM – The S&P 500 is up +12.9% YTD (total return) through the close of trading last Friday 12/09/16. The best trading day YTD for the stock index was a gain of +2.5% achieved on Friday 1/29/16 and the worst trading day YTD was a loss of 3.6% on Friday 6/24/16. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. THE MAGIC OF COMPOUND INTEREST – A San Francisco home on the market today for $6.95 million was originally purchased by the current owner’s grandfather for $30,000 in 1926. The $6.95 million list price reflects a +6.2% annual growth rate for the last 90 years. If the home had grown by +10% per year for 90 years, the current list price would be $159 million or 23 times the $6.95 million price tag (source: BTN Research).

3. END OF LIFE – Total Medicare spending in fiscal year 2016 was $595 billion. 25% of that total ($150 billion) was spent during the final 12 months of life of beneficiaries (source: Medicare).

4. THE DOCTOR WILL BE IN SHORTLY – Healthcare spending in the United States reached $3.2 trillion in 2015 (18% of the nation’s economy), equal to per person spending of $9,990. 20 years earlier (1995), per person healthcare spending in America was $3,788 (source: Health Affairs).

5. BOND ROUT – Our nation’s 2% coupon 10-year Treasury note with a par value of $1,000 was trading for $1,093 as of the close of trading on Monday 11/07/16 (i.e., the day before the presidential election), resulting in a current yield of 1.83%. The same 2% coupon 10-year Treasury note with a par value of $1,000 was trading for $811 as of the close of trading last Friday 12/09/16, resulting in a current yield of 2.47%. Thus, the value of the 10-year Treasury note has fallen 26% in the last 5 weeks since the early November election (source: BTN Research).

6. IT WAS LOW – The yield on the 10-year Treasury note closed at 1.36% on Friday 7/08/16, the lowest closing yield ever for 10-year paper. 10-year notes have been traded in the USA since 1790, i.e., 226 years of trading. From that all-time low close, the yield on the 10-year note has risen more than 1 percentage point in just 5 months to close at 2.47% last Friday 12/09/16 (source: Treasury Department).

7. REALLY LONG-TERM PAPER – Steve Mnuchin, President-elect Donald Trump’s nominee for Treasury Secretary, has said that he would consider the issuance of US Treasury bonds with maturities of 50 to 100 years, as opposed to the 30-year maximum duration currently used. Mexico sold 100-year government bonds in April 2015, the 3rd time since 2010 that Mexico has sold 100-year bonds (source: Bloomberg).

8. THE FED – The 7 members of the Fed’s Board of Governors are nominated by the President and confirmed by the Senate. The group has functioned with just 5 members since late May 2014. Incoming President Trump hopes to fill the 2 vacant positions. Janet Yellen’s 4-years as Fed Chair runs through 2/03/18 (source: Federal Reserve).

9. HIS PARTY – Republican Donald Trump will begin his first term as President with a Republican majority in the Senate and the House, the first Republican to enjoy that level of Congressional support at the beginning of his first term in office since Dwight Eisenhower in 1953 (source: Congress).

10. DON’T EVEN TRY TO GUESS – In January 2007, the Congressional Budget Office’s “10-year Projection” forecasted budget surpluses for 5 consecutive years beginning in fiscal year 2012 (i.e., years 2012-16) totaling $914 billion. Instead the actual deficits over fiscal years 2012-16 were a combined $3.3 trillion (source: CBO).

11. LONG LIFE – The life expectancy of a baby born in the USA in 2015 is 78.8 years, a decline of 0.1, the statistic’s first “year-over-year” drop after 21 consecutive years of increase (source: National Center for Health Statistics).

12. PAYING FOR COLLEGE – Outstanding student loan debt is $1.279 trillion as of 9/30/16. 11.0% of student debt (by dollar) is at least 90 days delinquent or is in default as of 9/30/16. The delinquency calculation understates the actual delinquency rate since student loans that are now in deferment are treated as if they are “current” with regard to their payment status (source: Federal Reserve Bank of New York).

13. I QUIT – 69% of workers retire by age 65, but only 5% of workers retire before age 55 (source: Census Bureau).

14. CAN’T WAIT – The normal retirement age (NRA) in 2017 to be eligible for full Social Security benefits is 66 years. 57% of men and 64% of women take their benefits before they reach their NRA (source: LIMRA).

15. LONG SEASON – The NFL’s Cleveland Browns were 0-12 going into their 12/11/16 game vs. the Bengals. The 2008 Detroit Lions were the last NFL team to have a winless season, losing all 16 games that year (source: NFL).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2016 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. NOVEMBER IS DONE – The S&P 500 gained +3.7% (total return) in November 2016, its 2nd best monthly performance this year (behind only March) and the best November result since 2009. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. LOSERS LAST YEAR – An equal investment at the end of 2015 into the 13 stocks in the S&P 500 that lost at least 50% last year is up a collective +60.4% YTD as of Wednesday 11/30/16 (source: BTN Research).

3. WINNERS LAST YEAR – An equal investment at the end of 2015 into the 7 stocks in the S&P 500 that gained at least +50% last year is up a collective +25.0% YTD as of Wednesday 11/30/16 (source: BTN Research).

4. RISK/REWARD – 134 individual stocks in the S&P 500 (i.e., 134 of 500 stocks or 27% of the stocks in the index) gained at least +20% during the first 11 months of 2016 (change of the stock price without including the impact of reinvested dividends) including 23 stocks that are up at least +50% YTD through 11/30/16. 144 stocks (29% of the stocks in the index) have dropped in value since the end of 2015 (source: BTN Research).

5. RIGHT PLACE, RIGHT TIME – The 6 best performing stocks in the S&P 500 index YTD through 11/30/16 are in the semiconductor industry or are in the “basic materials” business, i.e., gold, copper, or oil & gas. Each of these 6 stocks is up at least +70% YTD (source: BTN Research).

6. THE SAME NUMBER – The size of the national debt as of 11/30/16 was $19.948 trillion. The market capitalization of the S&P 500 as of 11/30/16 was $19.931 trillion (source: BTN Research).

7. EMPLOYMENT SITUATION – US employers added +178,000 new net jobs during the month of November 2016, making it +1.982 million new net jobs that have been created YTD during 2016, an average of +180,000 per month. Our country’s 145.1 million employees nationwide are split 85/15 between the private sector (i.e., non-government workers) and the public sector (i.e., government workers) (source: Department of Labor).

8. DONE THIS BEFORE – President-elect Donald Trump has proposed a 1-time tax of just 10% on the estimated $2.5 trillion of profits held in overseas subsidiaries of US multinational firms instead of the top marginal 35% tax rate that may be deterring movement of the funds back to America today. A similar tax holiday was utilized in 2005 when a 5.25% one-time tax incentive (down from a top marginal corporate tax-rate of 35%) motivated American businesses to repatriate $360 billion back to the USA (source: Internal Revenue Service).

9. LONG-TERM GUESS – When President Franklin D. Roosevelt proposed the Social Security retirement program in 1935, FDR’s financial people projected that total Social Security expenditures would reach $1.3 billion in 1980 or 45 years into the future. Actual outlays in 1980 were $149 billion. Thus, the analysts’ 1935 estimate represented less than 1% of actual 1980 Social Security expenditures (source: Social Security).

10. INFRASTRUCTURE – Denver International Airport (DIA), which opened in 1995 at a cost of $4.8 billion, is the last major airport built in the United States. DIA covers 53 square miles, 4 times the footprint of the 3 major airports servicing the New York City area – Kennedy, LaGuardia and Newark Liberty (source: New York Times).

11. NEED MORE TO DO MORE – The national “gas tax” has been 18.4 cents per gallon since August 1993. Since August 1997, 4.3 cents (of the 18.4 cents) has been directed into the nation’s Highway Trust Fund to pay for the maintenance and expansion of our federal highways and transit projects (source: Department of Transportation).

12. THEY WANT OUT – If the “Yes California” referendum to secede from the United States is passed by California voters in 2019, it would still require an amendment to the US Constitution that must be approved by 290 (of 435) House members, 67 (of 100) Senators and 38 (of 50) US states (YesCalifornia.org).

13. SEE A TREND? – The US economy grew by +4.2% per year over the 24 years from 1950 through 1973, a period of worldwide economic expansion. The US economy grew by +3.2% per year over the 27 years from 1974 through 2000. The US economy has grown by +1.8% per year over the last 15 years from 2001 through 2015 (source: Commerce Department).

14. ENERGY INDEPENDENCE – The United States imported 30% of the energy it consumed in 2006, a dependency that has dropped to just 12% in 2016 (source: TerraJoule.us).

15. WHO? – Tiger Woods played last week in his first PGA tourney since August 2015. Woods is ranked # 898 in the world, behind # 897 ranked Sean Riordan and just ahead of # 899 ranked Simon Yates (source: PGA).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2016 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. A MONTH TO GO – The S&P 500 index is up +10.5% YTD (total return) through Friday 11/25/16. The index’s trailing 50-year average return is +9.7% per year over the last half century, i.e., 1966-2015. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. AWESOME, KEEP GOING – The S&P 500 has gained +285.4% (total return) from its 3/09/09 bear market low through the close of trading as of last Friday 11/25/16. This ongoing bull market is in its 93rd month. Only the 1990-2000 bull market that was into its 114th month before it peaked on 3/24/00 has lasted longer among the 11 bulls that have occurred in the last 70 years (source: BTN Research).

3. HIGHER AND HIGHER – After reaching another new all-time closing high on Friday 11/25/16, the S&P 500 has set 122 record closes in the ongoing bull market that began on 3/10/09, including 14 record highs in 2016 alone (source: BTN Research).

4. GOOD IDEA – President-elect Trump has proposed term limits for Congress, restricting senators to a maximum of 2 terms of 6-years each (12-year max), and limiting House members to 3 terms of 2-years each (6-year max), a plan (if applied retroactively) that would remove 258 of the 535 members (48%) of Congress (source: Time).

5. MAYBE TIME FOR NEW BLOOD – John Conyers (MI-D) has served in the House of Representatives since January 1965, i.e., just short of 52 years. Patrick Leahy (VT-D) has served in the Senate since January 1975, i.e., just short of 42 years (source: BTN Research).

6. SOMEHOW HE KNEW – On 11/17/87 (29 years ago), Donald Trump said ”I believe that if I did run for President, I’d win.” Trump was being interviewed after he was asked to host the annual Democratic Congressional dinner by then Speaker of the House Jim Wright (TX-D) (source: New York Times).

7. A LOCK? – As of the close of trading on the Friday before the presidential election (11/04/16), the bond market was showing a 67% chance of a rate hike at its 12/14/16 meeting. As of the close of trading on Friday 11/25/16, the bond market was showing a 94% chance of a rate hike at its 12/14/16 meeting (source: Federal Reserve).

8. ELEVEN YEARS LATER – The median sales price of existing homes sold nationwide during the month of October 2016 was $232,200. The median sales price of existing homes sold nationwide during the month of October 2005 (i.e., 11 years ago) was $229,000 (source: National Association of Realtors).

9. COST TO BORROW GOING UP – The concern of bond investors that a Trump administration could bring an increased level of borrowing by the federal government to pay for the President-elect’s national infrastructure rebuild program is having an impact on home mortgage rates. The average 30-year fixed rate mortgage was 3.42% on 10/06/16, but has climbed more than ½ of 1% to 4.03% as of 11/23/16 (source: Freddie Mac).

10. MORE THAN CUT IN HALF – The percentage of home mortgage loans that are delinquent (defined as being at least 1 monthly payment late but not including those loans in the foreclosure process) peaked at 10.06% at the end of the 1st quarter 2010. That number has fallen to 4.52% as of the end of the 3rd quarter 2016 (source: Mortgage Bankers Association).

11. STILL THE AMERICAN DREAM? – The national homeownership rate in the USA as of 9/30/16 was 63.5%, down from a peak of 69.2% as of 12/31/04. Every 1 percentage point reduction in the homeownership rate represents 1.2 million households that have changed from homeowner to renter status (source: Census Bureau).

12. INCOME – The top 1% of US taxpayers earned 8.5% of the nation’s adjusted gross income (AGI) in 1980, rising to 20.8% of AGI in 2000, peaking at 22.9% of AGI in 2007 and finally dropping to 19.0% of AGI in 2013, the latter percentage being the most recent data that has been released by the government (source: IRS).

13. ANOTHER YEAR, ANOTHER TRILLION – Our nation’s national debt was $18.922 trillion as of 12/31/15, a total that has reached $19.898 trillion as of Wednesday 11/23/16 (source: Treasury Department).

14. EVERY DAY – An estimated 9,900 Americans will turn 65 years old each day next year (2017). This group represents the 7th year of 19 years of “Baby Boomers” turning age 65. An estimated 11,500 Americans will turn 65 years old each day in the year 2029 (source: Government Accountability Office).

15. WOW – When Alabama faced off against Auburn on Saturday 11/26/16 in the 81st annual “Iron Bowl” showdown, it was the 9th consecutive year that one of the teams was ranked # 1 or # 2 in the nation (source: BTN Research).

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Bill’s By The Number$

1. LATE IN THE YEAR – The S&P 500 index has closed at its calendar year high during the month of December in 17 of the last 31 years, i.e., 1985-2015. The index’s high close (so far) during 2016 (2190.15) was achieved on Thursday 8/15/16. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. FOUR – 2016 is the 4th year of Barack Obama’s 2nd 4-year presidential term. The S&P 500 has been positive on a total return basis during 17 of the last 20 “presidential 4th years.” The S&P 500 is up +8.9% YTD (total return) through the close of trading on Friday 11/18/16 (source: BTN Research).

3. ELECTION RESULTS – Hillary Clinton (D) won the popular vote in the 2016 presidential election by 1.11 million votes over Donald Trump (R). Secretary Clinton won the state of California by 3.23 million votes and President elect Trump won by 2.12 million votes in all states but California (source: Washington Examiner).

4. ONE HUNDRED VOTE SWING – The 6 states that President Obama won in the 2012 presidential election but Hillary Clinton lost in the 2016 race were Florida, Pennsylvania, Ohio, Michigan, Wisconsin and Iowa (worth 99 Electoral College votes). Clinton also lost the 2nd congressional district in Maine (1 Electoral College vote), a district that President Obama carried in 2012. Maine splits its 4 votes by district (source: BTN Research).

5. LESS THAN HALF THE AVERAGE – The average 30-year fixed rate mortgage over the last 45 years is 8.26%. The average 30-year fixed rate mortgage as of 11/17/16 was 3.94% (source: Freddie Mac).

6. WE TEACH THE WORLD – 59% of the 1,043,839 foreign students studying at American colleges during last year’s school year (2015-16) are natives of China, India, Saudi Arabia or South Korea. New York University (NYU) and the University of Southern California (USC) have the most foreign students in the United States (source: Institute of International Education).

7. WE SELL, THEY BUY – US exports of goods and services to China have increased tenfold since 1999, rising from $17 billion in 1999 to $165 billion in 2015 (source: Commerce Department).

8. WHAT ADVICE WOULD YOU GIVE? – A survey of 2,000 American adults found that their “best financial decision ever made” was “getting a college education” while their “worst financial decision ever made” was “not saving enough for retirement” (source: Claris Finance).

9. BORROW AND SPEND – President elect Donald Trump’s plan to invest in American infrastructure (e.g., highways, bridges and airports) has prompted global investors to price an increased US debt level and higher domestic inflation into bond prices. The yield on the 10-year Treasury note has increased from 1.83% on 11/07/16 (the day before the presidential election) to 2.36% on Friday 11/18/16 (source: Treasury Department).

10. DECAYING – The United States will need to spend $3.32 trillion over the next decade to fix our nation’s infrastructure, including $2.04 trillion in roads and bridges (source: American Society of Civil Engineers).

11. PENSION BACKSTOP – The Pension Benefit Guaranty Corporation (PBGC) was forced to take over an average of 10 failed pension plans per month over the last 14 fiscal years (2003-2016), a total of 1,685 pension plans over the entire 14 years. The PBGC protects defined benefit pension plans in the private (non-government) sector (source: Pension Benefit Guaranty Corporation).

12. STRONGER BANKING SYSTEM – Only 5 banks have failed in the United States YTD through 11/15/16, on pace to be the fewest number of bank failures in our country since 2007 when just 3 banks failed. Over the 7 years from 2008-14, 507 banks failed, an average of 72 per year (source: Federal Deposit Insurance Corporation).

13. STILL AT HOME – 32% of Millennials are living with a parent. “Millennials” are defined as the 75 million Americans ages 19-35 in 2016, i.e., individuals born from 1981-1997 (source: Pew Research Center).

14. IMPROVING TREND – American banks have repossessed 318,000 homes YTD through 10/31/16. Banks repossessed 450,000 homes in 2015 and 671,000 homes in 2012 (source: RealtyTrac).

15. COLLEGE FOOTBALL UPSETS – On Saturday 10/19/85, AP # 2 ranked Michigan lost to Iowa, # 3 ranked Oklahoma lost to Miami and # 4 ranked Arkansas lost to Texas. On Saturday 11/12/16, AP # 2 ranked Michigan lost to Iowa, # 3 ranked Clemson lost to Pitt and # 4 ranked Washington lost to USC. Jim Harbaugh was the Michigan QB in 1985 and the Michigan head coach in 2016 (source: CBS Sports).

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Bill’s By The Number$

1. HISTORICALLY SPEAKING – 2017 will have a Republican in the White House and Republicans controlling both the House and the Senate. Over the last 80 years, the S&P 500 has gained +11.7% per year (total return) when the White House and Congress were controlled by the same political party. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. WHOOPS – On the day of the 11/08/16 election, the political website “FiveThirtyEight” was projecting a 71.4% chance that Hillary Clinton (D) would win the presidential election with 302 Electoral College votes, 70 more than she actually won (source: fivethirtyeight.com).

3. GOT MORE, BUT LOST – Hillary Clinton (D) won the 2016 popular vote vs. Donald Trump (R). Clinton received 60.5 million votes, +395,050 more than Trump’s 60.1 million votes (source: Washington Examiner).

4. MANY STAYED HOME – 126.1 million Americans voted in the 11/08/16 presidential election, 3 million less than the number of voters in the 2012 election. The 126.1 million voters represent 56.8% of Americans that were eligible to vote, indicating that 96 million Americans that could have voted choose not to do so. The highest voter participation in the last 100 years was the 62.8% that voted in the 1960 election (source: BTN Research).

5. HOUSE – Using voting results through Friday 11/11/16, the House is now controlled by the Republicans 239-193 with 3 races still to be determined. The Republicans controlled the House 246-186 (with 3 vacancies) prior to the 11/08/16 elections (source: House of Representatives).

6. SENATE – Using voting results through Friday 11/11/16, the Senate is now controlled by the Republicans 51-46-2 with 1 race still to be determined (Louisiana). The Republicans controlled the Senate 54-44-2 prior to the 11/08/16 elections (source: Senate).

7. GOVERNOR RACES – Using voting results through Friday 11/11/16, the governorships across the country are now controlled by the Republicans 33-15-1 with 1 race still to be determined (North Carolina). The Republicans controlled the governorships 31-18-1 prior to the 11/08/16 elections (source: Washington Examiner).

8. GOT IT RIGHT AGAIN – The state of Ohio has correctly backed the winner of the US presidential election in the last 14 races, i.e., 1964-2016, including last week’s upset (source: PresidentElect.org).

9. JUMP ON – 5 days before the current bull market began in March 2009 only 18.9% of individual investors were “bullish” on US stocks. 38.9% of individual investors were “bullish” last week (source: AAII).

10. THE LAST MONTH – 20 of the last 25 Decembers have produced a positive total return for the S&P 500. The average December performance since 1991 is a total return gain of +1.78% (source: BTN Research).

11. DID I SAY THAT? – University of Pennsylvania finance professor Jeremy Siegel said he “wouldn’t be surprised to see a 1,000 point drop on the Dow” following Donald Trump’s victory on 11/08/16. Instead the Dow has gained +515 points since the election through the close of trading last Friday 11/11/16 (source: BTN Research).

12. INCREASE EVERYONE – Individual income taxes paid by American taxpayers would have to increase by +38% in order to eliminate our $587 billion deficit from fiscal year 2016 (source: Treasury Department).

13. IN JUST ONE YEAR’S TIME – As of the end of October 2016, the USA was domestically producing 8.52 million barrels of crude oil per day while we were importing 9.00 million barrels of crude oil per day, i.e., a 49/51 split between domestic production and foreign imports. As of the end of October 2015, the USA was domestically producing 9.16 million barrels of crude oil per day while we were importing 6.94 million barrels of crude oil per day, i.e., a 57/43 split between domestic production and foreign imports (source: Department of Energy).

14. AND WE’LL PAY HOW? – A child born in 2016 that begins kindergarten in the fall of 2021 would attend college between the years of 2034 and 2038. If that child attended an average private 4-year college and if the annual price increases for private colleges experienced over the last 30 years (+5.2% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would total $490,502 or $122,625 per year (source: College Board).

15. TOOK A LONG TIME – When the Chicago Cubs beat the Detroit Tigers in the 1908 World Series finale, the game took 1 hour and 25 minutes. When the Chicago Cubs beat the Cleveland Indians in the 2016 World Series finale, the game took 4 hours and 28 minutes (source: Major League Baseball).

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Bill’s By The Number$

1. NEW YORK, NEW YORK – The 2016 presidential election is between Hillary Clinton (D-NY) and Donald Trump (R-NY), the first time that the nominees of the 2 major US political parties have come from the same home state since 1944 (i.e., 72 years ago), when Franklin Roosevelt (D-NY) faced off against Thomas Dewey (R-NY). Roosevelt won the 1944 election, garnering his 4th term in the White House, a feat that cannot be replicated after the ratification of the 22nd Amendment to the United States Constitution in 1951 which limits presidents to a maximum of 2 terms in office (source: PresidentElect.org).

2. LOST AT HOME – If Al Gore (D-TN) had won his home state of Tennessee in the 2000 presidential election (George Bush beat Gore in Tennessee by 80,229 votes out of 2.08 million votes that were cast in the Volunteer State), Gore would not only have won the popular vote in the 2000 election nationally, he would have become the 43rd President of the United States (source: BTN Research).

3. A TIE? – There are 538 electoral votes at stake in tomorrow’s election. It will take 270 electoral votes to win the Presidency. There has been a tie in the Electoral College voting only one time in the nation’s history. In 1800, both Thomas Jefferson and Aaron Burr each received 73 electoral votes (source: PresidentElect.org).

4. HOW ABOUT THIS TIME? – Just 46% of eligible “Millennials” voted in the November 2012 election, compared with 69% of “Baby Boomers” that cast a vote. “Millennials” were adults aged 15-31 in 2012, i.e., individuals born from 1981-1997. “Baby Boomers” are defined as adults born from 1946-1964 (source: AP).

5. DOWN AT THE STATE LEVEL – In 23 states, Republicans control the governor’s office and the state legislature. In 7 states, Democrats control the governor’s office and the state legislature (source: National Conference of State Legislatures, National Governors Association).

6. HOW THEY VOTED – In the last 6 presidential elections (i.e., 1992-2012), 18 states have gone for the Democratic candidate each time, 13 states have gone for the Republican candidate each time, and the remaining 19 states have gone “blue” some years and “red” in other years (source: BTN Research).

7. BUCKEYE BRAINS – The state of Ohio has correctly backed the winner of the US presidential election in the last 13 races, i.e., 1964-2012. The presidents selected by our nation over that entire 48-year period resulted in Republicans winning 7 times and Democrats winning 6 times (source: PresidentElect.org).

8. APATHY – In the 2012 US presidential election, just 57.5% of eligible voters cast a vote (down from 62.3% in 2008), equal to 126 million voters. Thus, the 42.5% of eligible American voters that did not cast a vote for president in 2012 represents 93 million non-voters (source: Bipartisan Policy Commission).

9. NO MAS – Mitt Romney (R-UT) won just 27% of the Latino vote in the 2012 general election race vs. Barack Obama (D-IL) (source: USA Today).

10. SHE DIDN’T SING – Then First Lady Hillary Clinton won a Grammy in 1997 for “Best Spoken Word Album” for the audio version of her book “It Takes a Village” (source: HillaryClinton.com).

11. HAIL MARY – Donald Trump bought the New Jersey Generals, a USFL (United States Football League) franchise in 1982, sold the team before their first season (1983) then bought them back before the 1984 season. Trump signed Doug Flutie, Heisman Trophy winner out of Boston College for the 1985 season (source: BTN Research).

12. WATERGATE – At age 26 in 1974, Hillary Clinton worked on the Watergate impeachment inquiry staff, 1 of only 3 women on the 43-lawyer team. President Richard Nixon resigned in August 1974 (source: BTN Research)

13. TIME FOR A CHANGE? – Barack Obama is the 6th president since 1900 to be elected and serve exactly 2 full terms in office. In the previous 5 elections following a 2-term president, Americans voted the incumbent party out-of-office 4 times. Only Republican Ronald Reagan’s 8-years in office were followed by 4 years with another Republican president (source: BTN Research).

14. 60-VOTE SENATE – If either political party was to achieve 60 votes in the 100-member Senate that party would be able to stop a filibuster by the minority party, or end floor debate and bring any proposed legislation to a vote. The last time when either party had a filibuster-proof majority in the Senate resulted from the 1976 elections when the Democrats achieved a 61-vote majority (source: Senate).

15. SECOND CHOICE, BUT THE WINNER – George W. Bush won the 2000 presidential race but did not win the popular vote, the first time that happened since 1888 or 112 years earlier (source: PresidentElect.org).

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