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Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: May 4th, 2020 | 0 Comments

1. BEAR MARKET RALLY . . . OR A NEW BULL MARKET? – The S&P 500 gained +12.8% (total return) in April 2020, its first “double-digit” gain since October 2011 and its best month since January 1987. 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. DOWN THEN UP – Over 23 trading days from 2/19/20 through 3/23/20, the S&P 500 lost 33.8% (total return). In the subsequent 28 trading days from 3/24/20 through last Friday 5/01/20, the S&P 500 has gained +26.7% (total return) (source: BTN Research).

3. WHEN DO STOCKS HIT A BOTTOM? – A bear stock market for the S&P 500 has bottomed 6 months or less before the end of 5 of the last 7 recessions in the USA dating back 50 years to 1970. The most recent example: the bear that ended on 3/09/09, less than 4 months before the 6/30/09 recession end (source: BTN Research).

4. MOST ARE NEGATIVE YTD – As of the close of trading on Thursday 4/30/20, 84% of the stocks in the S&P 500 are down YTD (source: BTN Research).

5. BOND INDEX – The taxable bond market was up +5.0% YTD (total return) through 4/30/20. The Bloomberg Barclays US Aggregate Bond Index, 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. The index is a major benchmark for US bond investors (source: Bloomberg Barclays).

6. ALL ARE TOO HIGH – On 12/16/19, 10 Wall Street strategists forecasted the yield of the 10-year Treasury note as of 12/31/20, i.e., a year into the future. The 10 predictions ranged from a low of 1.50% to a high of 2.20%. The yield on the 10-year Treasury note closed at 0.64% as of Thursday 4/30/20 (source: Barron’s).

7. MATH – The headline read “GDP falls in 1Q by 4.8 percent.” Here’s what really happened: after adjusting the size of the US economy for the impact of inflation, the economy fell by 1.2179% from 12/31/19 to 3/31/20, i.e., every $1 million in the size of the economy dropped to $987,821. If that same decline occurred over 3 additional quarters, the $987,821 would drop to $975,790, then to $963,906, and then finally to $952,167, i.e., assuming 4 consecutive quarters each with a 1.2179% decline results in a 4.7833% decline, or $952,167 divided by $1 million minus 1. Rounding 4.7833% to 1 decimal place and you have a 4.8% drop (source: Commerce Department).

8. COULD THIS HOUSING TREND REVERSE? – In the 3 years through 3/31/20, the number of US households (both owners and renters) has increased by +5.5 million to 124.4 million. The number of owner households has increased by +5.6 million to 81.3 million while the number of renter households has declined by 0.1 million to 43.1 million (source: Census Bureau).

9. STAYING HOME – 17% of 487 high school seniors interviewed in mid-March 2020 will “definitely” or “most likely” change their plans to attend a 4-year college in the fall of 2020 (source: Art & Science Group, LLC).

10. ALMOST ANOTHER TRILLION – The national debt of the United States hit $24.974 trillion last Thursday 4/30/20, just 23 days after hitting $24 trillion on 4/07/20. It took the United States 192 years – from 3/04/1789 to 10/22/1981 – to create the first $1 trillion of our country’s national debt (source: Treasury Department).

11. NOT THIS YEAR – The 3/27/20 CARES Act has provided sponsors of defined benefit pension plans a 1-year holiday from their required annual pension contribution, i.e., they do not have to contribute to their pension plans during calendar year 2020 (source: CARES Act).

12. ONE MONTH, ONE DAY – The TSA screened 3,287,008 airlines passengers in the United States during the month of April 2020, a daily average of 109,567. The TSA screened 2,499,461 airline passengers in the United States on the single day of Tuesday 4/30/19 (source: Transportation Security Administration).

13. COVID-19 – As of 8:27am ET on 4/01/20, the United States reported 188,384 cases of COVID-19 patients and 3,893 deaths. As of 9:07am ET on 5/01/20, the United States reported 1,076,775 cases of COVID-19 patients and 63,512 deaths (source: NBC News, Meet the Press: First Read).

14. BIG PART OF REVENUE – Sales taxes make up on average 32% of state tax revenue collected (source: Center on Budget and Policy Priorities).

15. FRIDAY NIGHT STARS – 27% of the selections (17 of 64) in rounds 1 and 2 of the recently completed NFL 2020 draft played their high school football in the state of Texas (source: Dan Wetzel, Yahoo Sports).

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