Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: May 18th, 2020 | 0 Comments

1. LATE OR EARLY? – The bull market for the S&P 500 that began on 3/10/09 and ended on 2/19/20 ran for just short of 11 years and gained +529% or +18.3% annually (total return). If you were 6 months “late” in joining the bull market, i.e., you started on 9/10/09, you would have gained +307% or +14.4% annually (total return) by 2/19/20. If you were 6 months “early” in joining the bull market, i.e., you started on 9/10/08, you would have gained +253% or +11.6% annually (total return) by 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).

2. HOW LONG CAN YOU LAST? – 52% of 375 small businesses owners (with 2 to 500 employees) interviewed in mid-April 2020 fear they would be out-of-business in 6 months or less if the societal restrictions imposed nationwide due to COVID-19 continued for 6 more months (source: Society for Human Resource: Management).

3. WE’LL NEED TO BORROW A LOT OF MONEY – After 7 months of fiscal year 2020, i.e., the 7 months through 4/30/20, the government’s budget deficit to date is $1.481 trillion, more than the nation’s all-time record deficit for a single fiscal year of $1.413 trillion from fiscal year 2009 (source: Treasury Department).

4. BIGGEST YET – The House released the $3 trillion, 1,815-page HEROES Act (Health and Economic Recovery Omnibus Emergency Solutions Act) on 5/12/20. Congress has previously passed 4 bills between 3/06/20 and 4/24/20 to counter the economic impact of the COVID-19 pandemic (source: House of Representatives).

5. STUDENT LOANS – On page 1,400 of the 1,815-page HEROES Act is a provision that would forgive up to $10,000 of every federal student loan (source: HEROES Act).

6. BURIED WITHIN – On page 1,066 of the 1,815-page HEROES Act is a provision that would allow cannabis businesses to maintain federal bank accounts, something not currently allowed (source: HEROES Act).

7. NEVER GOING BACK – Before President Trump declared a national emergency to combat the COVID-19 virus on Friday 3/13/20, just 3.6% of American wage and salaried employees worked from home 5 days a week (source: Department of Labor).

8. INFLATING THE BENEFIT – The California Supreme Court heard oral arguments on 5/12/20 on a case involving the right of a public pension plan to alter its pension benefit calculation after an employee has been hired. California implemented a pension reform law as of 1/01/13 which excluded “accrued vacation-pay” in the final pension benefit calculation. The change, which targeted “pension spiking” and was applied retroactively to workers hired before 1/01/13, is being challenged by the workers’ union (source: Pensions & Investments).

9. TOOK FOUR YEARS – “Risk corridors” that were part of the 2010 Affordable Care Act (ACA) provided that health insurance companies were to receive reimbursement for a portion of their losses suffered on individual plans. The Supreme Court voted 8-1 on 4/27/20 that the government still owes health insurance companies $12 billion from the program. Health insurance companies initially filed suit to recover the funds on 6/02/16 (source: ACA).

10. DID THEY PAY? – Of the 124 million households in the United States as of 3/31/20, 81 million (65%) are homeowners. Of the 81 million, 50 million have a mortgage on their primary residence. The May 1st mortgage payment for those 50 million homeowners was due last Friday 5/15/20 (source: Census Bureau).

11. SOCIAL DISTANCING ALREADY – 35 million Americans live alone, i.e., 28% of the households in the United States have just a single person living in the house/apartment (source: Census Bureau).

12. WOULD YOU PAY MORE? – If US airlines were to stop booking passengers into “middle seats” in order to achieve some level of “social distancing,” they would need to raise ticket prices by +43% to recover lost revenue (source: International Air Transport Association).

13. WE NEED A WINNER NOW – 88% of the drugs that enter clinical trials do not receive FDA approval and never come to market for sale to the general public (source: Tufts Center for the Study of Drug Development).

14. NOT INFLATION, BUT DEFLATION – The Consumer Price Index (CPI) fell 0.8% on a month-over-month basis in April 2020, its largest monthly decline since December 2008. The last calendar year in which inflation was negative, i.e., deflation, was 1954 or 66 years ago (source: Bureau of Labor Statistics).

15. GAMES – The last time MLB played a shortened regular season that still included post-season play was 1981. After a players’ strike that wiped out 52 games per team, the Dodgers won the ’81 World Series (source: MLB).

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