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Bill’s By The Number$

  1. STOCKS – The S&P 500 is up +10.4% YTD (total return) through the close of trading last Friday 4/09/21. The index has set 20 record closing highs this year, most recently on Friday 4/09/21.  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).
  1. HARD TO CATCH UP – A 30-year old who is investing $500 at the beginning of every month in a tax-deferred 401(k) will accumulate $588,032 by age 60 if the funds grow at +7% per year. If that individual was forced to suspend his/her monthly deferral for just 5 years from ages 35-39, he/she would have to earn +8.8% per year from ages 40-60 to accumulate $588,032 by age 60.  This mathematical calculation ignores the impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).
  1. CAREFUL WHAT YOU ASK FOR – The last major tax reform in the United States was signed into law by President Bill Clinton on 8/10/93. 15 months later in the 1994 midterm elections held on 11/08/94, the House flipped from a Democratic majority of 258-176 to a Republican majority of 230-204, while the Senate flipped from a Democratic majority of 57-43 to a Republican majority of 52-48 (source: Congress).
  1. LARGEST PORTS – The Port of Los Angeles and the Port of Long Beach, located just 3 miles apart on the West Coast, are the 2 busiest American ports as measured by total container trade (source: iContainers.com).
  1. CLOSE THE DOOR? – 32% of Americans surveyed believe that foreign imports shipped into the United States represent a “threat” to the US economy (source: Gallup’s 2021 World Affairs survey, February 2021).
  1. HOME BUILDING – 991,000 single-family homes began construction in 2020, the 9th year of increasing home starts since this measurement bottomed at 431,000 in 2011. The all-time US record for home starts in a single year is 1.72 million in 2005 (source: Census Bureau).
  1. BEFORE RATES RISE – In a report released on Monday 4/05/21, an estimated 1 out of every 8 homeowners (12.2%) with a mortgage had refinanced their loan to a lower interest rate in just the previous 6 months (source: Survey of Consumer Expectations Housing Survey).
  1. IT’S GOING HIGHER – 205 of 220 money managers (93%) expect inflation to rise over the next year. The study, released on Tuesday 3/16/21, surveyed fund managers who collectively manage $630 billion of assets or approximately $3 billion per manager.  Inflation, using the CPI as the measurement, was up +1.7% on a year-over-year basis through 2/28/21 (source: Bank of America).
  1. SO HE SAYS – President Joe Biden predicts his “American Jobs Plan,” released on Wednesday 3/31/21, would create 19 million working class jobs in the USA if enacted as designed (source: Biden White House).
  1. NO COMMUTE – 3 out of every 4 American families (73%) reporting household income of at least $200,000 switched to a “work-from-home” structure when the pandemic began in 2020 (source: Census Bureau).
  1. COMPASSIONATE FOLKS – 1 out of every 7 American workers (14%) is employed in the health care industry, a total of 22 million individuals (source: Census Bureau’s 2019 American Community Survey).
  1. THE FLU – “Flu season” is defined as the 8 months from October-May. An average of 36,000 Americans died of flu per year over the last decade, but just 22,000 deaths occurred during the 2019-2020 season (source: CDC).
  1. IS THERE AN EXECUTIVE ACTION COMING? – Any student loan debt that is forgiven after 12/31/20 and before 12/31/25 will not create “taxable income” for the borrower. This tax provision was part of HR # 1319 (aka the “American Rescue Plan Act”) that was signed into law by President Joe Biden on 3/11/21.  However the pandemic-relief legislation did not include language implementing any student loan forgiveness  Please consult a tax expert for details (source: HR # 1319, Section # 9675).
  1. WE SHOULD TOO – The UK’s “State Pension,” analogous to the USA’s Social Security, has been increasing the age at which a UK citizen can claim the benefit from age 65 in November 2018 to 67 by 2028 (source: ageuk.org).
  1. A (BIG) BUSINESS – Oral arguments were heard on 3/31/21 before the Supreme Court in “National Collegiate Athletic Association v. Alston.” A lower court ruling in favor of collegiate athlete Shawne Alston would allow for compensation to be paid to student-athletes, a ruling that the NCAA then appealed to the Supreme Court.  College sports generated an estimated $14 billion in revenue in 2020 (source: Supreme Court).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. STOCKS – In the last 30 years, the best 12-month performance for the S&P 500 occurred over the 1-year period that ended last Wednesday 3/31/21. The S&P 500 gained +56.4% (total return) from 3/31/20 to 3/31/21.  Ironically, 3/31/20 was the date that the Trump White House announced US pandemic deaths could be 100,000 to as high as 240,000.  Pandemic deaths were 3,000 on 3/31/20.  Pandemic deaths were 551,000 as of 3/31/21.  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).
  1. MOST INVESTORS WERE WRONG – As of 3/31/20, i.e., a year ago, 66% of stock investors were “bearish” (50%) or “neutral” (16%) on the direction of the US stock market over the upcoming 6 months (source: American Association of Individual Investors).
  1. BEST STOCK MONTH – April has been the # 1 best month for the S&P 500 index over the last 30 years, i.e., 1991-2020, gaining an average of +2.17% (total return). The month of November (average gain of +1.92%) has been the # 2 best performing month over the last 3 decades (source: BTN Research).
  1. A FORCE – As of mid-February 2021, retail stock traders represent 23.0% of all US equity trading (by dollar volume), more than double the 10.1% they accounted for in 2010 (source: Bloomberg Intelligence).
  1. BONDS – Long-dated Treasuries lost 15.8% (total return) over the 1-year ending 3/31/21. The Bloomberg Barclays Long US Treasury Index, which includes all Treasury securities with a remaining maturity of at least 10 years and having at least $250 million of outstanding face value, was used as the proxy (source: Bloomberg).
  1. IN SEARCH OF YIELD – American corporations issued $140 billion of “junk-rated” bonds in the first quarter 2021, the highest quarterly volume of “junk” bonds in US history. “Junk” or “high yield” bonds are rated below “Baa” by Moody’s or rated below “BBB” by S&P (source: Refinitiv).
  1. THEY’RE BUYING BONDS – The Fed is buying $120 billion of bonds each month – $80 billion of Treasury debt and $40 billion of mortgage-backed securities. The Fed confirmed on 3/17/21 that the purchases will continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals” (source: Federal Reserve).
  1. FED TARGETS – In Chairman Jerome Powell’s 3/17/21 post-meeting press conference, he said the Fed will not raise interest rates until our nation records a 3.5% unemployment rate and annual inflation of at least 2%. The country’s jobless rate as of March 2021 was 6.0% and inflation, using the “personal consumption expenditures” (PCE) index preferred by the Fed, was up +1.6% for the 1-year through 2/28/21 (source: Federal Reserve).
  1. WEALTHIEST – The top 10% of US households (as measured by net worth) own 70% of all assets nationwide as of 12/31/20, i.e., $85.6 trillion out of $122.9 trillion. The bottom 50% of US households own just 2% of all assets as of 12/31/20, i.e., $2.5 trillion out of $122.9 trillion (source: Federal Reserve).
  1. LOWEST PAID, HARDEST HIT82% of the net job losses in the United States in calendar year 2020 were suffered by workers in the bottom 25% of wage earners (source: Economic Policy Institute).
  1. WORK-FROM-HOME – 25% of the workforce in the advanced economies worldwide could work from home between 3-5 days a week without any loss of productivity (source: McKinsey & Company).
  1. TAXESProperty taxes levied on office buildings and on private residences make up an estimated 30% of the tax revenue collected by American cities and towns, i.e., local governments (source: Urban Institute).
  1. WAIT TILL THE COST OF MONEY GOES UP – During fiscal year 2020, i.e., the 12 months ending 9/30/20, the US government spent $345 billion for interest payments on the national debt or $945 million a day. 5 years earlier, i.e., fiscal year 2015, the US government spent $223 billion for interest payments on the national debt or $611 million a day (source: Treasury Department).
  1. ADDING MORE DEBT – Total US household debt, including mortgages, credit cards and auto loans, was $12.67 trillion as of 12/31/08. Over the next 5 years, total household debt fell $1.15 trillion to $11.52 trillion as of 12/31/13.  But over the last 7 years, total household debt has increased $3.04 trillion to $14.56 trillion as of 12/31/20 (source: Federal Reserve Bank of New York).
  1. HE DOES BOTH – Los Angeles Angels baseball star Shohei Ohtani, a 2-way player, hit a 468-foot home run as a batter and reached 100 mph as a pitcher during Spring Training 2021 in Arizona (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. YEAR-TO-DATE RESULTS – With just 3 trading days remaining in the 1st quarter 2021, the S&P 500 stock index is up +6.2% YTD (total return) through the close of trading as of last Friday 3/26/21. The index, created in 1957, has achieved 15 record closing highs this year, including its latest on 3/26/21.  The S&P 500 consists of 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).
  1. BAD QUARTER – The worst year for the taxable bond market in the last 45 years (1976-2020) was a loss of 2.92% (total return) in 1994. The YTD performance (through last Thursday 3/25/21) of the taxable bond market was a loss of 3.13% (total return).  The Bloomberg Barclays US Aggregate Bond Index (created in 1986 with backdated history calculated to 1976), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement (source: Bloomberg Barclays).
  1. BONDS – The US bond market (including treasury, municipal, corporate, mortgage and asset-backed debt) was worth $49.9 trillion as of 12/31/20. Treasury debt ($21.0 trillion) makes up the largest piece of the US bond market (source: Securities Industry and Financial Markets Association).
  1. STOCKS – The US stock market, including 3,463 public-traded companies on the NYSE, AMEX and NASDAQ, was worth $41.2 trillion as of 12/31/20 (source: Wilshire).
  1. STATUS QUO FOR TWO MORE YEARS – The most recent meeting of the Fed ended on 3/17/21 with their interest rate forecast calling for no interest rate hikes by the Fed until at least 2023 (source: Federal Reserve).
  1. HAVE KIDS, GET MONEY – An estimated 40% of the 126 million households in the United States have children under the age of 18, or 50 million households. An estimated 90% of the 50 million households (45 million) will qualify for the expanded Child Tax Credit (CTC) per the American Rescue Plan Act of 2021.  The new CTC could pay $300 per month per child under age 6 and $250 per month per child between ages 6-17 beginning 7/01/21.  Please consult a tax expert for details (source: Tax Policy Center).
  1. THEY’LL SPEND IT SOMEWHERE – American consumers spent $2.81 trillion on foreign imports of goods and services in calendar year 2020. American consumers are forecasted to receive $800 billion in the form of stimulus payments, unemployment benefits and child tax credits through the American Rescue Plan Act of 2021, and then turn around and spend $360 billion of the $800 billion on foreign imports.  Chinese companies are predicted to sell Americans $60 billion of the $360 billion (source: Allianz).
  1. TWO SUPERPOWERS – The United States and China makes up 40% of the world’s gross domestic product (source: Barclays Investment Bank).
  1. HIS PROMISE – President Joe Biden said on Wednesday 3/17/21 that “anybody making more than $400,000 will see small-to-a-significant tax increase.” Biden wants the changes to be effective 1/01/22.  US presidents are paid $400,000 per year (source: ABC’s Good Morning America).
  1. TRIPLE DIGITS – The price of oil – $60.97 a barrel as of the close of trading last Friday 3/26/21 – last closed above $100 a barrel on 7/30/14, or nearly 7 years ago (source: NYMEX).
  1. WOMEN RULE – The 17.8 million college students who enrolled in the fall of 2020 were split 41% male and 59% female. 17.8 million students are down just 2.5% from the 18.2 million students who enrolled in the fall of 2019 (source: National Student Clearinghouse Research Center).
  1. WE DID IT BEFORE – The Works Progress Administration (WPA) was created by President Franklin Roosevelt in 1935 during the Great Depression. During its 8 years, the WPA provided employment and wages for an estimated 40% of jobless Americans.  The WPA built schools, hospitals and bridges (source: History.com).
  1. INFRASTRUCTUREAmerican roads and bridges will require an estimated $2.8 trillion of repairs and upgrades over the 10 years from 2020-2029 (source: The American Society of Civil Engineers).
  1. NO TEST SCORE NEEDED – Students applying to Ivy League school Cornell University for the 2022-2023 school year do not have to include ACT or SAT test scores with their applications (source: Cornell University).
  1. FOOTBALL – The NFL announced on Thursday 3/18/21 an 11-year media deal worth $113 billion for the seasons 2023-2033. That’s equal to $321 million per team per year over the duration of the agreement (source: NFL).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. “TIME IN” vs. “TIMING” – The split between “up” and “down” time periods for the S&P 500 index from 1950 to the end of 2020, i.e., the last 71 years, as measured by: Days: 54% up and 46% down; Months: 60% up, 40% down; Quarters: 67% up, 33% down; Years: 73% up, 27% down; 5-Year Rolling Time Periods: 79% up, 21% down; and finally 10-Year Rolling Time Periods: 89% up, 11% down. The S&P 500 consists of 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).
  1. MULTIPLIER – The “American Rescue Plan Act of 2021” includes $1,400 cash payments made to 110 million households. If each taxpayer that received $1,400 had a “marginal propensity to consume” of 60%, the initial taxpayer would save $560 and spend $840, and then in turn the party that received the $840 would save $336 and spend $504, and the next party would save $202 and spend $302, and so on.  Ultimately the original $1,400 cash payment would result in $2,100 of economic activity, i.e., $840 + $504 + $302 + . . . (source: BTN Research).
  1. MONEY THAT THEY WILL SPEND – 42% of the $1.9 trillion “American Rescue Plan Act of 2021,” i.e., $800 billion out of the $1.9 trillion, is direct support that will be distributed to households in the form of stimulus payments, unemployment benefits and child tax credits (source: American Rescue Plan Act of 2021).
  1. TRILLIONS TO HELP – The 6 bills (totaling $5.6 trillion of aid) passed by Congress to combat the impact of the pandemic in the last 13 months are 1) HR # 6074 ($8.3 billion in March 2020); 2) HR # 6201 ($3.5 billion in March 2020); 3) HR # 748 aka the CARES Act ($2.3 trillion in March 2020); 4) HR # 6312 aka CARES # 2 Act ($484 billion in April 2020); 5) HR # 133 ($900 billion in December 2020); and 6) HR # 1319 aka the American Rescue Plan Act ($1.9 trillion in March 2021) (source: Congress).
  1. ALMOST HALF OF ADULTS – 46% of American adults experienced a loss of income or they live with someone that experienced a loss of income in the nearly 1-year following President Donald Trump’s declaration of a pandemic-driven “national emergency,” i.e., from 3/13/20 to 2/28/21 (source: Census Bureau).
  1. SAME NUMBER ABOVE AND BELOW – 50% of the 153.8 million Form 1040s that were filed for tax year 2018 (a total of 76.9 million returns) reported less than $40,000 of adjusted gross income (source: IRS).
  1. AND IN THE NEXT YEAR – 2020 was the 10th year in the last 70 years, i.e., 1951-2020, that the US economy had contracted. Our nation’s “gross domestic product” (GDP) shrunk by 3.5% last year.  Following the 9 previous “down” years, the US economy has rebounded in the next year with positive growth 7 out of 9 times, growing by an average of +3.3% per year for all 9 “bounce back” years (source: Commerce Department).
  1. AN OPINION – Jamie Dimon, JPMorgan Chase CEO, forecasted on 3/01/21 that “there’s a very good chance you’re going to have a gangbuster economy for the rest of 2021 and easily into 2022” (source: Bloomberg TV).
  1. FED THINKS – The median forecast (released on Wednesday 3/17/21) made by the 11 members of the Federal Open Market Committee (FOMC) for “change in real GDP” during 2021 was +6.5%. Actual GDP (gross domestic product) annual growth has been at least +6.5% just once (1984) in the last 50 years (source: Federal Reserve).
  1. LESS BABIES – The global “total fertility rate” has been cut in half (down 51%) in the last 50 years, falling from 4.922 “births per woman” in 1968 to 2.415 “births per woman” in 2018 (source: The World Bank).
  1. TEN YEARS APART – Banks repossessed just 1,428 homes nationwide in January 2021. Banks repossessed 78,133 homes nationwide in January 2011 (source: Attom Data Solutions).
  1. RIGHT DIRECTION – As of 9am ET on Friday 3/19/21, 8,327 Americans had died from the COVID-19 virus over the previous 7-day period. That’s the 7th consecutive week of declining US death totals from the pandemic and represents a 64% drop in weekly deaths since Friday 1/29/21 (source: NBC News).
  1. LONG OVERDUE – The federal gas tax is 18.4 cents per gallon today, but the tax has not been raised since 10/01/93 or nearly 27 ½ years ago. However 37 US states have raised their respective state gas tax since 2010.  Gas taxes are used to fund improvements to highways and bridges (sources: Amer. Society of Civil Engineers).
  1. NOT GOING – 2.17 million freshmen started college in the fall of 2020, down 13% (327,513 fewer students) from the 2.50 million freshmen that began college in the fall of 2019 (source: National Student Clearinghouse).
  1. NICE JOB – Justin Thomas, the # 2 ranked golfer in the world, won $2.7 million on Sunday 3/14/21 with his win at The Players Championship in Florida, the largest payout from a single golf tournament in history (source: PGA).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. STOCKS AND HIGH INFLATION – During the 15 highest inflation years (using the “Consumer Price Index” as the benchmark) over the last 100 years, i.e., 1921-2020, the S&P 500 stock index has been “up” 7 years and “down” 8 years. The index’s average performance for the 15 years is +2.5% per year (total return).  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).
  1. SINCE THEN – President Trump declared the coronavirus pandemic a “national emergency” on Friday 3/13/20. Over the 1-year since that announcement, i.e., Monday 3/16/20 through last Friday 3/12/21, the S&P 500 gained +48.0% (total return), in spite of a horrible 12.0% loss (total return) on Monday 3/16/20 (source: BTN Research).
  1. PUT IT ON THE CARD – In the 1-year since the declaration of a “national emergency” on 3/13/20, the US national debt has increased $4.46 trillion from $23.44 trillion to $27.90 trillion (source: Treasury Department).
  1. RISING RATES – From its all-time closing low of 0.501% on Monday 3/09/20, the yield on the 10-year Treasury note has more than tripled to close at 1.634% as of last Friday 3/12/21 (source: Treasury Department).
  1. ADDING TO CASHMoney market funds in the United States, including retail and institutional funds, both taxable and tax-free, have increased $615 billion (to $4.39 trillion) over the last 12 months through last Friday 3/12/21, an average increase of $12 billion a week (source: Investment Company Institute).
  1. BY PARTY – In the last 100 years (1921-2020), Republicans have a 52-48 edge over the Democrats in “years in the White House.” Inflation (using the “Consumer Price Index” benchmark) has been +1.9% per year during the Republicans’ 52 years, while inflation has been +3.4% per year during the Democrats’ 48 years (source: DOL).
  1. BLAME THE PANDEMIC – Total exports of goods and services by American corporations in calendar year 2020 were $2.13 trillion, down 16% from the year before and the smallest total recorded nationwide since 2010 (source: Bureau of Economic Analysis).
  1. WHO IS RIGHT? – In a 2/10/21 speech to the Economic Club of New York, Federal Reserve Chair Jerome Powell said, “published unemployment rates (from the Department of Labor) during COVID have dramatically understated the deterioration in the labor market.” He speculated an accurate jobless rate as of 1/31/21 was “close to 10%.”  As of 1/31/21, the official national jobless rate was 6.3% (source: Federal Reserve).
  1. YEAR-OVER-YEAR IMPROVEMENT – The aggregate earnings per share of the companies in the S&P 500 in the 1st quarter 2021 are forecasted to be +21.5% greater than the actual aggregate earnings per share of the S&P 500 companies from the 1st quarter 2020 (source: FactSet).
  1. NEW BUSINESSES – The 4 top months for “business applications” in US history have occurred since July 2020, i.e., during the pandemic. The all-time monthly record (582,334 applications) was set in July 2020, followed by January 2021 (497,539), September 2020 (463,175) and August 2020 (430,489) (source: Census Bureau).
  1. TAXES – The American Institute of CPAs (AICPA) sent a letter on 3/04/21 to the commissioner of the IRS requesting a 2-month delay of the 2021 tax deadline, i.e., from 4/15/21 to 6/15/21. The organization believes that filing obligations due a month from today are “simply not possible for many taxpayers” (source: AICPA).
  1. REALLY RICH FOLKS – Senator Elizabeth Warren (D-MA) proposed on 3/01/21 the “Ultra-Millionaire Tax Act” that would impose an annual wealth tax on households with at least a $50 million net worth. The tax would begin in 2023 and would impact an estimated 100,000 US households (out of 126 million total US households).  The bill’s tax rate is 2% on estates between $50 million and $1 billion, rising to 3% on estates valued in excess of $1 billion.  For Jeff Bezos, worth $181 billion as of the close of trading on Friday 3/12/21, the wealth tax would cost him $5.4 billion annually at his current net worth level (source: www.warren.senate.gov).
  1. NOT WHAT IT USED TO BE – To rank in the top 1% of US taxpayers took $85,428 of adjusted gross income (AGI) in 1981. To rank in the top 25% of US taxpayers took $87,044 of AGI in 2018 (source: Internal Revenue Service).
  1. THEY NEED MONEY – Hawaii’s state Senate passed legislation last week (3/09/21) to increase its top marginal tax rate to 16% (from 11% today) on taxable income of more than $200,000. The bill, which would give Hawaii the highest marginal tax rate in the nation, moves onto the Hawaii state House for debate (source: Hawaii Senate).
  1. LIKE FATHER, LIKE SON – Both Cecil Fielder (who played 13 MLB years) and his son Prince Fielder (who played 12 MLB years) each hit 319 home runs in their respective major league baseball careers (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. LAST TWO BULLS – From its 3/23/20 bear market low, the S&P 500 has gained +74.6% (total return) in the 240 trading days through Friday 3/05/21. From its 3/09/09 bear market low, the S&P 500 gained +67.4% (total return) in the first 240 trading days of what became a nearly 11-year bull market run that ended on 2/19/20.  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).
  1. IN MY LIFETIME – Last year’s (2020) contraction of the US economy (down 3.5%) was the largest drop our nation has experienced since 1946 or 74 years earlier (source: Bureau of Economic Analysis).
  1. WHAT A COMEBACK – Many American employers have recovered and as of 2/28/21 they have hired back 67% of the 25.4 million jobs that were lost last year during the 2 months of March-April 2020 (source: DOL).
  1. PANDEMIC BILL – The $1.9 trillion “American Rescue Plan Act of 2021” that the House passed would provide stimulus payments to an estimated 93% of US households (117 million). The Senate version of this legislation would provide stimulus payments to 87% of US households (110 million) (source: Penn Wharton Budget Model).
  1. IT’S THE RENTERS THAT ARE HURTING – Just 1 in 39 homeowners (2.5%) was at least 3 months behind in paying their monthly mortgage as of 12/31/20. However 1 in 5 renters (20.5%) was at least 3 months behind in paying their monthly rent as of 12/31/20 (source: Consumer Financial Protection Bureau).
  1. YOUR HOME – 62% of home mortgages (33.4 million) are federally backed, i.e., the loans are guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Administration or the Veterans Benefits Administration. The government announced on 2/16/21 that the moratorium on foreclosures and evictions on federally backed, single-family home mortgages had been extended to 6/30/21 (source: Federal Housing Finance Agency).
  1. QUICK, BEFORE RATES RISE – 13% of outstanding home mortgages nationwide as of 12/31/20, i.e., 7.2 million mortgages out of 53.9 million mortgages, were refinanced during 2020 (source: Federal Reserve Bank of NY).
  1. IMPACT ON BOND INVESTORS – The yield on the 10-year Treasury note rose 0.37 percentage points (from 1.09% to 1.46%) in February 2021. That’s the largest monthly rise in the 10-year note yield since November 2016 when the yield went from 1.84% to 2.37%, a jump of 0.53 percentage points (source: Treasury Department).
  1. HIS OPINION – Legendary investor Warren Buffett released his annual letter to investors on 2/27/21. Referring to the recent rise in the yield of the 10-year Treasury note, Buffet opined that “bonds are not the place to be these days.  Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future.”  The release was Buffett’s 56th annual letter (source: Berkshire Hathaway).
  1. IN SEARCH OF YIELD – American corporations issued $52 billion of “junk-rated” bonds in January 2021, the 3rd highest monthly volume of “junk” bonds in US history. A record $438 billion of “junk” bonds were issued in calendar year 2020.  “Junk” or “high yield” bonds are rated below “Baa” by Moody’s or rated below “BBB” by S&P (source: S&P Global Market Intelligence).
  1. ALMOST FIVE YEARS EARLY – The Congressional Budget Office (CBO) released a 10-year forecast on 1/19/16 (i.e., 5 years ago) of the projected size of our national debt. The non-partisan agency predicted that our national debt, $18.9 trillion in size as of 1/19/16, would reach $28.003 trillion as of 12/31/25.  As of last Monday 3/01/21, the national debt was $28.004 trillion (source: CBO).
  1. WHO OWNS WHAT – 39% of the US government debt that is “held by the public” was foreign owned in 2019 (the most recent year that data is available), down from 48% in 2008 (source: USA Facts).
  1. PAY NOTHING ON APRIL 15TH – 35% of the 153.8 million tax returns that were filed nationwide for tax year 2018 (the latest year for which data has been released) did not pay any federal income tax, a total of 53.4 million tax returns. 90% of these “non-taxable” returns (48.0 million returns) reported adjusted gross income of less than $40,000 (source: Internal Revenue Service).
  1. PANDEMIC, AND AFTER – The price of West Texas Intermediate (WTI) crude oil fell to $22.76 a barrel as of 4/09/20, i.e., 11 months ago. As of Friday 3/05/21, WTI crude oil closed at $66.09 a barrel (source: NYMEX).
  1. MONEY WENT TO MADOFF INSTEAD – Instead of paying professional baseball player Bobby Bonilla $5.9 million as he was owed in 1999, the New York Mets negotiated to pay Bonilla $1,193,248 every July 1st from 2011 through 2035, a total of $29.8 million over 25 years (source: New York Mets).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. TWO MONTHS IN – The S&P 500 has gained +1.7% YTD (total return) through Friday 2/26/21. The stock index has set 10 all-time closing highs this year, including 8 record closes since President Joe Biden took office on Wednesday 1/20/21.  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).
  1. TECH STOCKS – The NASDAQ Composite has gained +2.5% YTD (total return) through Friday 2/26/21, after gaining +44.9% (total return) in 2020 and gaining +36.7% (total return) in 2019. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).
  1. MORE THAN HALF – The split between “up” stocks and “down” stocks in the S&P 500 based upon YTD performance through last Friday 2/26/21 is 59% “up” and 41% “down” (source: S&P 500).
  1. RECORD LOW SET A YEAR AGO – The yield on the 10-year Treasury note closed at 1.46% on Friday 2/26/21. The all-time record low close for the 10-year note was 0.50% set on 3/09/20.  10-year notes have been traded in the USA since 1790, i.e., 231 years of trading (source: Treasury Department).
  1. SMALLER HOMES – The average size of a single-family home built in the United States in 2019 was 2,509 square feet, the 4th consecutive year that the national average size has declined (source: Census Bureau).
  1. PANDEMIC IMPACT – Total state tax revenue, i.e., a combination of state income tax, corporate state income tax and state sales tax, increased in 22 states but declined in 28 states over the period April-to-December 2020 compared to the same 9 months from 2019. Idaho experienced the greatest gain (up +10.5%) while Alaska suffered the largest drop (off 43%) (source: Urban Institute’s State and Local Finance Initiative).
  1. WHERE? – The average single-family home in the USA has appreciated +39.0% over the 5 years ending 12/31/20. Homes in Idaho (+82.5%) have experienced the greatest growth in value while homes in North Dakota (+14.1%) have seen the least percentage increase in value (source: Federal Housing Finance Agency).
  1. HIGHEST NUMBERS EVER – Mortgage debt ($10.04 trillion), student loan debt ($1.56 trillion) and auto loan debt ($1.37 trillion) reached all-time record highs as of 12/31/20 (source: Federal Reserve Bank of New York).
  1. QUITE A FINANCIAL STORM – 19 of the largest US banks will participate in the Federal Reserve’s stress test this year. The annual analysis models the banks’ ability to function during a hypothetical recession that includes a 10.75% unemployment rate, a 55% drop in stock prices and a 4% decline in the size of the US economy (source: Federal Reserve).
  1. ACCURATE? – The government surveys 60,000 households each month in order to estimate our nation’s unemployment rate, i.e., 60,000 households out of a grand total of 8 million households. That means data collected from 1 out of every 2,097 households is the source of our jobless rate (source: Department of Labor).
  1. NO PROGRESS IN A DOZEN YEARS – US “life expectancy at birth” for calendar year 2020 that was reported on 2/18/21 was 77.8 years, the same “life expectancy at birth” that was originally reported by the US on 12/09/10 for calendar year 2008 (source: National Vital Statistics Reports).
  1. NEED LESS SPACE – 278 executives surveyed in August 2020 anticipate they will reduce their office space footprint by an average of 30% when their current leases come up for renewal. Those surveyed report that a successful “work from home” experience during the pandemic has decreased their need for daily office space (source: McKinsey Global Institute).
  1. WHAT THEY GET FOR WHAT THEY DO – The government payment to a hospital caring for a Medicare-eligible patient who has been diagnosed with COVID-19 has been increased by +20% over traditional inpatient reimbursement through Medicare. This additional payment will be in effect until the end of the public health emergency caused by the pandemic (source: Centers for Medicare & Medicaid Services).
  1. BIG PROMISE – The European Union (27 European countries) implemented in 2013 its “Youth Guarantee” program which ensures any person under the age of 25 will receive a “good quality” job, an apprenticeship or continued education within 4 months of finishing his/her schooling or after being laid off (source: EU).
  1. BACK-TO-BACK – The 2000 New York Yankees baseball team was the last major league team to repeat as World Series champs, a feat the Los Angeles Dodgers will attempt to duplicate in 2021 (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. BULL RUN – In the nearly 11 months since bottoming on 3/23/20, the S&P 500 has gained +77.4% (total return) through last Friday 2/19/21. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market (source: BTN Research).
  1. LUCKY – A person with $1 million invested 100% in the S&P 500 as of 1/01/73 withdrawing an inflation-adjusted $100,000 per year would be out of money in 9 years, i.e., as of 12/31/81. A 2nd person with $1 million invested in the S&P 500 as of 1/01/82 withdrawing an inflation-adjusted $100,000 per year would have $6.32 million remaining after 39 years, i.e., as of 12/31/20.  This calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).
  1. BAD DAY, BAD YEAR – The worst year for the taxable bond market in the last 30 years (1991-2020) was a loss of 2.92% (total return) in 1994. The stock market, using the S&P 500 as a measurement, has had 105 trading days in the last 30 years that resulted in a loss of at least 2.92% (total return).  The Bloomberg Barclays US Aggregate Bond Index (created in 1986 with backdated history calculated to 1976), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement (source: Bloomberg Barclays).
  1. MORE OUT THAN IN – The 4 largest monthly budget deficits in US history occurred in 2020. The 4 months were June 2020 ($864 billion deficit), April 2020 ($738 billion deficit), May 2020 ($399 billion deficit) and February 2020 ($235 billion deficit).  The last month to run a surplus was in September 2019 (source: Treasury Department).
  1. START RIGHT AWAY – A child born in February 1999 (22 years ago) who started college in the fall of 2017 is scheduled to graduate from an average 4-year public in-state college in May 2021. If the child’s parents had invested $146 per month beginning at the child’s 1999 birth and had earned an annualized +8% on all invested dollars, the parents would have been able to pay for their child’s 4-year college expenses of tuition, fees, room and board (the 4-year cost was $86,320).  This calculation ignores the ultimate impact of taxes on the investment account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: College Board).
  1. TOP SHELF – To rank in the top 0.1% of US taxpayers in tax year 2018, i.e., the top 1 out of 1,000 taxpayers, required an adjusted gross income of $2,514,209 (source: Internal Revenue Service).
  1. PEOPLE – The US population reached 200 million in 1967, 300 million in 2006 (39 years later) and was projected in February 2020 to reach 400 million in 2058. Our population today is 330 million (source: Census Bureau).
  1. NEW HOMES – The construction of 991,100 new single-family homes began in 2020, the 9th consecutive year of increasing home building in the US. In the decade of the 2010s, 6.8 million new homes began construction, down 44% from the 12.3 million new homes that started in the decade of the 2000s (source: Census Bureau).
  1. BY STATE – There are 27 Republican governors and 23 Democratic governors. The longest tenured governor nationwide is Andrew Cuomo (D-NY) who just began his 11th year in office (source: Ballotpedia.org).
  1. BY AGE – 81% of US pandemic deaths as of 2/19/21 were Americans at least age 65. 1% of US pandemic deaths as of 2/19/21 were Americans under age 35 (source: Centers for Disease Control and Prevention).
  1. BY MONTH – 195,000 Americans died in October 1918 during the worldwide flu outbreak, the deadliest month in our nation’s history. 95,000 Americans died from COVID-19 in January 2021, the worst month to date for pandemic-related deaths nationwide (source: Center for Disease Control).
  1. OUTLAYS – US consumer spending dropped 3% during calendar year 2020, a combination of spending on “goods” increasing +6% while spending on “services” fell 7% (source: Federal Reserve Bank of New York).
  1. PUSHING THE LOCALS ASIDE – The “home buying budget” today in Austin, TX for home buyers from outside of the state of Texas is +32% higher than the “home buying budget” of local buyers (source: Redfin).
  1. PAY FOR IT LATERStudent loan debt in the United States was 90% larger than credit card debt nationwide as of 12/31/20, i.e., $1.56 trillion to $820 billion (source: Federal Reserve Bank of New York).
  1. GOLF – Tiger Woods has earned $121 million in career earnings from playing golf on the PGA tour, but has earned $1.5 billion in his career from endorsements, appearances and course design work (source: Forbes).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. STOCK MARKET – The median annual return of the stock market over the last 45 years (1976-2020) was a gain of +15.8% (total return). The stock market has produced a positive total return gain in 37 of the last 45 years, i.e., 82% of the time.  The S&P 500, consisting of 500 stocks chosen for market size, liquidity and industry group representation, was used as the stock measurement.  It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).
  1. BOND MARKET – The median annual return of the taxable bond market over the last 45 years (1976-2020) was a gain of +6.5% (total return). The taxable bond market has produced a positive total return gain in 42 of the last 45 years, i.e., 93% of the time.  The Bloomberg Barclays US Aggregate Bond Index (created in 1986), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement (source: Bloomberg Barclays).
  1. DO THE MATH – The S&P 500 is up +4.9% YTD (total return) through last Friday 2/12/21. Since the S&P 500 is a cap-weighted index, the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation.  As of 2/12/21, the 8 largest stocks in the index (out of 505 individual stocks counted in the index) represent 25% of the total capitalization of the index (source: Slickcharts.com).
  1. SUPPLY AND DEMAND – The price of West Texas Intermediate (WTI) crude oil had fallen to $22.76 a barrel as of 4/09/20 as the global impact of COVID-19 was crushing the worldwide demand for oil. As of last Friday 2/12/21, WTI crude oil closed at $59.47 a barrel, its highest closing price since 1/09/20 (source: NYMEX).
  1. MORE IN THAN OUT – For every $1 of goods that US companies exported to Chinese buyers in 2020, American consumers imported $3.49 of goods from Chinese manufacturers (source: Department of Commerce).
  1. IT’S AN INDEX – Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020. The category “food” within the CPI calculation was up +3.9% for the year, “medical care services” was up +2.8%, but “energy” was down 7.0% last year (source: Department of Labor).
  1. WILL YOU NEED TO WORK? – Even though 1 of 4 current retirees (27%) have held a job for pay during their retirement years, just under 3 of 4 current workers (74%) anticipate they will hold a job for pay during their upcoming retirement years (source: Employee Benefit Research Institute 2020 Retirement Confidence Survey).
  1. LET’S SHOOT FOR MORE – A 65-year old American male has a life expectancy of 18.2 years. A 65-year old American female has a life expectancy of 20.8 years (source: National Center for Health Statistics).
  1. HOME EQUITY – Single-family home values in the United States have increased by an average of +10.0% YTD through 11/30/20, likely to result in the first “double-digit” average return for home values nationwide for an entire calendar year since 2004. Data on the change in home values during December 2020 will be released on 2/23/21 (source: Federal Housing Finance Agency).
  1. DREAM HOME – Ground was broken in the United States on the construction of 100,200 single-family homes in October 2020, the largest monthly total nationwide since June 2007 (source: Census Bureau).
  1. HOW WE LIVE – Of the 7.2 million new US households created in the last 4 years, 100% were “owner” households while none were “renter” households, i.e., “owner” households grew from 75.6 million (12/31/16) to 82.8 million (12/31/20), while “renter” households remained flat at 43.0 million (source: Census Bureau).
  1. WE’RE DOWN, THEY’RE DOWN A LOT – The US economy fell 3.5% in size during calendar year 2020. The collective economies of the 19 countries that use the Euro as their common currency, i.e., the Eurozone, fell 6.8% in size during calendar year 2020 (source: Department of Commerce, Eurostat).
  1. BLUE CONTROL – The House of Representatives is currently made up of 221 Democrats, 211 Republicans and 3 vacancies. 2 of the 3 vacancies are in Louisiana, and a 3rd is from Texas (source: House of Representatives).
  1. ALL DONE WITH MY WORK – An average American worker has increased his/her productivity by +50% in the last 21 years, i.e., an average worker can complete in 2 hours as of 12/31/2020 the same amount of work that it took him/her 3 hours to finish as of 12/31/1999 (source: Department of Labor).
  1. NICE JOB SCOUTING – 6 college quarterbacks were selected before Tom Brady in the 1999 NFL draft. 3 of the 6 never played in an NFL playoff game.  The other 3 played in a grand total of 11 playoff games.  Tom Brady has played in 45 playoff games, including 10 Super Bowls (source: Pro Football Reference).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. TEN YEARS – Since 1950, there have been 62 different 10-year periods (i.e., the 10-years from 1950-59, 1951-60, . . ., 2011-2020). The S&P 500 produced a positive total return in 60 of the 62 decade-long periods.  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).
  1. ONE STOCK, ONE MONTH – The top performing individual stock in the S&P 500 index during January 2021 was up +49% for the month (source: S&P).
  1. NOTHING – 76% of 619 millennials surveyed in the 4th quarter 2019 do not believe Social Security will exist when they retire. Millennials were born between 1981-97 and are ages 24-40 in 2021 (source: Transamerica).
  1. HISTORIC NEED FOR MONEY – The Treasury Department is expected to auction this week $126 billion of 3-year notes ($58 billion), 10-year notes ($41 billion) and 30-year bonds ($27 billion), an all-time quarterly debt auction record amount (source: Treasury Department).
  1. JOBS – The Congressional Budget Office forecasted on 2/01/21 that the number of employed Americans (150.0 million as of 1/31/21) will not recover to its pre-pandemic level of 158.7 million until 2024 (source: CBO).
  1. WILL CONGRESS AGREE? – The $1.9 trillion COVID-relief plan as outlined by the Biden administration includes $350 billion in aid to state and local governments, $400 billion for pandemic vaccination, testing, tracing and for the reopening of schools, $600 billion in direct aid to families (the $1,400 per person stimulus payments), $400 billion in jobless benefits, and $150 billion in “Paycheck Protection Program” (PPP) loans/grants for small businesses (source: The Brookings Institution).
  1. IT HAS BEEN DONE BEFORE – Congressional Democrats are using “budget reconciliation” to move President Joe Biden’s $1.9 trillion COVID-relief plan through the Senate. “Reconciliation bills” are not subject to the “filibuster rule” that ends debate on a piece of legislation only after 60 senators agree to do so, i.e., it would take just 51 senators (instead of 60) to approve the COVID-relief bill.  Congress has used the “budget reconciliation” process to enact 21 bills in the last 40 years (source: Center on Budget and Policy Priorities).
  1. NEGOTIATING WITH THE BANK – As of the end of October 2020, just 3.0 million homeowners with mortgages were in a forbearance plan with their lender, representing 5.6% of all homeowners with mortgages and only 3.6% of all homeowners (source: Black Knight Mortgage Monitor).
  1. THOUGHT IT WOULD BE HIGHER – 522,808 Americans filed bankruptcy in 2020, down 30% from 752,160 bankruptcy filings in 2019 (source: United States Courts, Table F-2, Bankruptcy Filings).
  1. WERE YOU IN ON THIS? – 5.6 million existing homes were sold in 2020, the highest number recorded in the United States since 2006 (source: National Association of Realtors).
  1. GREATER THAN INFLATION – Wages and salaries in the private sector increased +2.8% during calendar year 2020. Wages and salaries in the public sector (i.e., local and state government workers) increased +1.8% during calendar year 2020.  Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020.   (source: Department of Labor).
  1. JUST ONE OF FIFTY STATES IMPROVED – The unemployment rate in 49 of 50 US states increased between December 2019 and December 2020. Hawaii had the greatest jobless rate jump (up 6.6 percentage points from 2.7% to 9.3%).  South Dakota was the only state to report a lower jobless rate last year, dropping from 3.4% to 3.0% (source: Bureau of Labor Statistics).
  1. HUNT FOR HIGHER YIELD – The average current yield on “CCC” rated corporate bonds (as rated by S&P) was 7.6% in January 2021, within 0.3 percentage points of the lowest average yield ever recorded for this “junk bond” rated category, i.e., an all-time low of 7.3% was set in 2014. The current yield of bonds drops as investors bid up the price of the bonds (source: Ice Data Services).
  1. GENTLEMAN FARMER – Bill Gates is the largest private owner of farmland in the United States with 242,000 acres. His largest holdings are in Louisiana, Arkansas and Nebraska (source: The Land Report).
  1. SPRING (AND SNOW) IS IN THE AIR – Training camps for major league baseball teams open this month. The minimum salary for a major league baseball player for 2021 is $570,500.  To rank in the top 1% of all US taxpayers (based upon 2018 tax data) required an adjusted gross income level of at least $540,009 (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.