Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: June 15th, 2020 | 0 Comments

1. HOW HAVE STOCKS DONE? – The S&P 500 is up +12.8% (total return) since President Donald Trump declared a national emergency on Friday 3/13/20, i.e., the 13 weeks from 3/13/20 to last Friday 6/12/20. 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. THEY PRINT, THEY BUY – The Fed was purchasing $75 billion per day of Treasury bonds in mid-March 2020 when it launched “Unlimited Quantitative Easing.” The daily debt purchases made by the Fed have slowed, dropping to just $4.5 billion per day of Treasury bonds acquired last week (source: Federal Reserve).

3. BORROWING TRILLIONS – From Friday 3/13/20, the date of President Donald Trump’s declaration of a national emergency, through last Thursday 6/11/20, the national debt of the United States has increased $2.62 trillion, rising from $23.44 trillion to $26.06 trillion (source: Treasury Department).

4. NO KIDDING – The United States officially dropped into a recession on 2/29/20, its 6th recession in the last 40 years, i.e., since 1980. The announcement confirming the start of this economic downturn was released on 6/08/20, exactly 100 days after the recession started. The next most recent recession in the country began at the end of December 2007 and lasted 18 months through June 2009. The announcement of the 2007 recession was released on 12/01/08, 336 days after the recession started (source: Nat’l Bureau of Economic Research).

5. THE “CARES ACT” EFFECT – The nation’s 13.3% jobless rate as of 5/31/20 (released on Friday 6/05/20) would have been an estimated 16.3% if the workers who were being paid wages from funds obtained through a “Payroll Protection Program” (PPP) loan were counted as “temporarily laid off” instead of “actively employed” (source: Bureau of Labor Statistics).

6. HELP WANTED SIGNS – The number of job openings in the United States has fallen by just short of 2 million in the last 2 months. There were 7.004 million job openings nationwide as of 2/29/20, a total that has dropped to 5.046 million as of 4/30/20 (source: Department of Labor).

7. NOT INFLATION, BUT DEFLATION – The Consumer Price Index (CPI) fell 0.1% on a month-over-month basis in May 2020, the 3rd consecutive month of “negative inflation.” The last calendar year in which inflation was negative, i.e., deflation, was 1954 or 66 years ago (source: Bureau of Labor Statistics).

8. NO GUARANTEE – The city of Detroit filed for bankruptcy on 7/18/13. A court approved reorganization plan was finalized on 11/07/14 which included pension cuts to 32,000 active and retired city workers. All 32,000 impacted workers, except for police and firefighters, suffered a 4.5% reduction to their pension and they lost all “cost-of-living” adjustments in the future (source: US Bankruptcy Court, Judge Steven Rhodes).

9. DO WHATEVER IT TAKES – The Fed established the $500 billion Municipal Liquidity Facility on 5/26/20. The program can purchase short-term debt directly from US states. Illinois became the first US state to utilize the facility, borrowing $1.2 billion on 6/05/20 for a period of 1-year at a cost of 3.82%. Illinois faced a revenue shortfall due to a pandemic-driven delay in its tax collections (source: Federal Reserve).

10. BIG DECLINE – The state of Texas received $2.61 billion in sales tax revenue in May 2020, down $400 million from the $3.01 billion of sales tax revenue collected in May 2019 (source: Texas Comptroller Glenn Hegar).

11. IMPACT OF LOW PRICES – US field production of crude oil was 11.1 million barrels a day for the week ending 6/05/20, the 10th consecutive week of declining domestic oil production. The total decline over the 10 weeks was 1.9 million barrels a day from a peak of 13.0 million barrels a day as of 3/27/20 (source: Department of Energy).

12. PANDEMIC DEATHS – As of 6/06/20, 37% of the COVID-19 deaths in the United States had occurred at nursing homes (source: Washington Examiner).

13. WE WANT OUT TOO – 42% of Italians surveyed in late April 2020 would vote in a referendum to leave the European Union, following a similar exit made by the United Kingdom on 1/31/20 (source: Tecne survey).

14. NO DISCOUNT – The University of Southern California has announced its 2020-21 tuition will increase by +3.5% from the prior year regardless of whether classes are to be held in person or online (source: LA Times).

15. FANS WERE MISSING – The world’s top 3 golfers were paired together for the first 2 rounds of the PGA golf tournament in Ft. Worth, TX last Thursday and Friday. The trio, Rory McIlroy (# 1), Jon Rahm (# 2) and Brooks Koepka (# 3) had combined career PGA earnings of $101 million before last week (source: PGA).

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