Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: August 3rd, 2020 | 0 Comments

1. STOCK PERFORMANCE – Even though 35% of the stocks in the S&P 500 are down at least 20% YTD through last Friday 7/31/20, the cap-weighted index is up +2.4% YTD. 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. BONDS – The taxable bond market is up +7.7% YTD (total return) through 7/30/20. The last time the bond market had a calendar year performance better than +7.7% was in 2011 or 9 years ago when bonds gained +7.8%. The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).

3. SPENDING SPREE – Since cutting short-term interest rates to near zero on 3/15/20, the Fed has purchased $1.7 trillion of Treasuries through Wednesday 7/29/20. The Fed now owns $4.3 trillion of US government debt or 25% of the total Treasury securities outstanding (source: Treasury Department).

4. UNCLE SAM BORROWS – There was $17.2 trillion of treasury securities outstanding as of 3/31/20. There was just $3.0 trillion of treasury securities outstanding as of 12/31/00 (source: SIFMA).

5. WHATEVER IT TAKES – The 11 emergency lending facilities opened by the Fed over a 2-month period beginning on 3/17/20 were to be in place through 9/30/20. On 7/28/20, the Fed announced that all 11 facilities would remain open through 12/31/20 (source: Federal Reserve).

6. IT’S FOR YOUR OWN GOOD – Effective 7/14/20, Colorado became the 9th US state to offer a pre-tax retirement plan to private sector workers who do not have access to an employer-sponsored plan. Colorado companies lacking a retirement plan are now required to “auto-enroll” its employees in the state-run retirement plan, but workers may “opt-out.” An estimated 40% of Colorado’s workers are employed by companies with no retirement plan (source: National Conference on Public Employee Retirement Systems).

7. THEY WILL HAVE TO CUT BACK – An estimated 55% of working-age households today are not saving enough money before retirement to allow them to maintain their current standard of living into their retirement years (source: Center for Retirement Research).

8. RECORD DROP – The US economy fell a record 32.9% in the 2nd quarter 2020, i.e., quarter-over-quarter change expressed as an annualized result. In reality, the economy as of 6/30/20 is just 9.5% smaller than the size of the economy as of 3/31/20 after removing the impact of inflation. A 9.5% drop occurring for 4 consecutive quarters, i.e., (1.0-0.095) ^ 4 = 0.671, equals a 32.9% annualized tumble (source: Department of Commerce).

9. HOW BAD? – Under a “worst-case” scenario, the United States could lose at much as $19.9 trillion of “potential growth” in its economy over the next 5 years if the COVID-19 pandemic causes a prolonged depression (source: Centre for Risk Studies at the University of Cambridge).

10. FIVE MONTHS TO GO – Our national debt has increased $3.3 trillion YTD through Thursday 7/30/20 to reach $26.5 trillion. Before this year, the largest calendar year addition to the national debt was the $1.7 trillion debt increase that occurred during calendar year 2010 (source: Treasury Department).

11. DEATHS – As of 9am ET on Friday 7/31/20, 8,138 Americans had died from the pandemic over the trailing week. That’s largest Friday-to-Friday death total since 5/22/20 (source: NBC News, Meet the Press: First Read).

12. PLEASE VOTE – The 2020 presidential election will take place on 11/03/20 or 3 months from today. 138 million Americans voted in the 2016 presidential election, equal to 58.1% of the nation’s voting-eligible population, i.e., 100 million voting-eligible Americans did not vote in the 2016 race (source: United States Elections Project).

13. HELP! – As of the 2nd quarter 2020, there were 40.8 million US households that were renters, representing 32% of 126.8 million US households. A July 2020 survey estimates that 23.6 million of the 40.8 million renters (58%) fear they have “no to slight” chance of being able to pay their rent in August (source: Census Bureau).

14. IT’S A WORRY – 68% of 842 small business owners surveyed in May 2020 are “very” or “moderately” concerned about their increased exposure to getting sued as they reopen their businesses (source: National Federation of Independent Business Research Center).

15. OUT OF THE GAME – Major league baseball player Daniel Bard was the winning pitcher in the Colorado Rockies’ 7/25/20 game, his first MLB win since 5/29/12, a 2,979-day gap between wins (source: MLB).

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Bill’s By The Number$

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