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Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: April 6th, 2020 | 0 Comments

1. AND THEN IN THE NEXT QUARTER – The S&P 500 lost 19.6% (total return) in the 1st quarter 2020, the index’s 13th “double-digit loss” quarter in the last 40 years, i.e., 1980-2020. Of the previous 12 quarters that experienced a “double-digit loss,” 10 succeeding quarters recorded a total return gain (with 5 of the 10 quarters resulting in “double-digit gains”) but the 2 quarters that were down were “double-digit losses.” 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. A TERRIBLE THREE MONTHS – 68 individual stocks in the S&P 500 index were down at least 50% YTD as of the end of the 1st quarter 2020, including 7 stocks down at least 75% YTD (source: BTN Research).

3. BONDS – Long-dated Treasuries produced a +32.6% total return over the 1-year ending 3/31/20. 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).

4. SECOND BEST STOCK MONTH – April has been the # 2 best month for the S&P 500 over the last 30 years, i.e., 1990-2019, having gained an average of +1.67% (total return), trailing only November’s +1.78% average gain (source: BTN Research).

5. WITH THE PRESS OF A BUTTON – Over a 2-week period ending Friday 3/27/20, the Federal Reserve launched or reopened 6 lending facilities to provide billions of funds to distressed corporations, municipalities, investors, investment companies and money market funds: 1) Commercial Paper Funding Facility (3/17/20); 2) Primary Dealer Credit Facility (3/17/20); 3) Money Market Mutual Fund Lending Facility (3/18/20); 4) Term Asset-Backed Securities Lending Facility (3/23/20); 5) Primary Market Corporate Credit Facility (3/23/20); 6) Secondary Market Corporate Credit Facility (3/23/20) (source: BTN Research).

6. TO NEAR ZERO – The Fed cut its key benchmark interest rate to “0-to-0.25%” on Sunday 3/15/20. The only other time in American history that the Fed has cut rates to near zero was on 12/16/08, a level that was maintained for 7 years until they raised rates by 0.25 percentage points on 12/16/15 (source: Federal Reserve).

7. WHAT WE SPEND IN 2 ½ DAYS – If the United States was to fund the entire $2.3 trillion “Coronavirus Aid, Relief and Economic Security” Act (CARES) by issuing new 30-year bonds at the long-dated bond’s interest rate from the close of trading on 3/31/20 (1.35%), the annual debt service cost would be $31.05 billion per year. During fiscal year 2019, the US had outlays of $12.18 billion per day (source: Treasury Department).

8. LONE STAR STATE – 42% of the USA’s daily production of crude oil of 13 million barrels comes from Texas or off the state’s coastline (source: Energy Information Administration).

9. WILL WE GO HIGHER? – The United States has tracked unemployment rates in the nation since 1948. Our country’s highest recorded jobless rate is 10.8% from November 1982 and December 1982. During the 2008-2010 financial crisis, our nation’s jobless rate peaked at 10.0% in October 2009 (source: Department of Labor).

10. MORE THAN TEN MILLION – More Americans filed for “first-time” unemployment benefits in the last 3 weeks (10.237 million for the 3 weeks ending 3/28/20) than the combined total of “first-time” unemployment claims that were applied for (10.179 million) in the previous 47 weeks (source: Department of Labor).

11. BETTER HAVE A JOB – The median monthly rent in March 2020 for a 1-bedroom apartment in San Francisco was $3,500 (source: Zumper).

12. BEFORE COVID-19 HIT – 59% of Americans surveyed in early February 2020 admit they live “paycheck-to-paycheck” and are unable to consistently put money away for an emergency or for retirement (source: Charles Schwab Modern Wealth Survey).

13. HOUSING COSTS – Inflation, as measured by the “Consumer Price Index,” was up +2.3% in calendar year 2019, but was up just +1.4% for the year when the cost of housing is excluded (source: Department of Labor).

14. PASS THE SALT – The $10,000 cap on the deduction of “state and local taxes” (SALT) that was part of 2017 tax legislation was responsible for an estimated $77.4 billion of tax revenue in 2019. $54.8 billion of the $77.4 billion (71%) was paid by taxpayers reporting at least $500,000 of income (source: Joint Committee on Taxation).

15. HURRY UP – The fastest major league baseball game played in its 144-year history was a 75-minute, 58-pitch complete game shutout by Red Barrett of the Boston Braves on 8/10/44 vs. the Cincinnati Reds (source: MLB).

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