Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: August 31st, 2020 | 0 Comments

OFF AND RUNNING AGAIN – From its 3/23/20 low closing value through the close of trading last Friday 8/28/20, the S&P 500 has gained +58.1% (total return) and set 7 all-time closing highs. 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).

CONSECUTIVE BEARS – Over the last 75 years, the shortest time period between the end of one bear market and the beginning of another bear market is 2 years and 2 months. The S&P 500 fell 22% during a bear market that ended on 10/07/66. The next bear market for the stock market, an 18-month long tumble of 36% began its downward slide on 11/29/68 (source: BTN Research).

TOUGH YEAR FOR SOME STOCKS – 29% of the stocks in the S&P 500 are down at least 20% YTD through the close of stock trading on Friday 8/28/20 (source: BTN Research).

WAR CHEST FOR THE FUTURE? – Investment grade companies in the United States borrowed $1.15 trillion in bond offerings during calendar year 2019, below the all-time record of $1.37 trillion set in 2017. That 2017 record will likely fall in 2020 as investment grade companies are projected to borrow $1.6 trillion during the current calendar year (source: Refinitiv, JPMorgan Chase).

SHIFT THE RISK – If a bank loans out money to a business through the “Main Street Lending Program,” the Fed will purchase from the bank 95% of the loan amount in order to reduce the lender’s risk (source: Federal Reserve).

RECORD SPENDING – The 4 months that have produced the greatest government “outlays” in US history have been the last 4 months – April 2020 through July 2020. “Outlays” in June 2020 were $1.1 trillion, more than double the pre-pandemic record of $440 billion set in May 2019 (source: Treasury Department).

MONEY TO HELP – The “Economic Impact Payments” of $1,200 per adult and $500 per child (under the age of 17) that were part of the 3/27/20 CARES Act were the 3rd time the government has issued direct stimulus payments in the last 20 years. The previous payments were made in 2001 and 2008 (source: CARES Act).

ALL THIS DURING A PANDEMIC – The median sales price of existing homes sold in the United States was $304,100 in July 2020, the first time in US history that the median sales price has exceeded $300,000. The $304,100 median price is also a record on an inflation-adjusted basis, besting the $230,200 median sales price from July 2006 (14 years ago), equal to $293,096 in 2020 dollars (source: Nat’l Association of Realtors).

NEED MORE, NOT LESS – The suppliers of lumber cut their production in the 1st quarter 2020 as the pandemic was developing in anticipation of a slowing housing market. Instead, an increased demand for home building and renovation projects has pushed the price of lumber to an all-time record price of $858 per thousand board feet, up +111% from a price of $406 per thousand board feet at the end of 2019 (source: CME Group).

RUNNING OUT OF TIME – Renters were protected from eviction by the 3/27/20 CARES Act through last Monday 8/24/20. An estimated 23 million Americans, i.e., 21% of the 110 million people who live in renter households, are financially strapped and are at risk of eviction by 9/30/20 (source: COVID-19 Eviction Defense Project).

LOVE THE WATER VIEW – Just 8% of the counties in the United States (255 out of 3,142 counties nationwide) touch a coastline, i.e., they touch the Atlantic Ocean, the Gulf of Mexico, the Pacific Ocean, the Bering Sea or the Arctic Ocean. These coastline counties however are home to 29% of the US population or 96 million people out of our 330 million population (source: Census Bureau).

TWO STATES, VERY DIFFERENT IMPACT – The jobless rate in California in February 2020 (pre-pandemic) was 9%, before soaring to 13.3% by July 2020. The jobless rate in Wyoming in February 2020 (pre-pandemic) was 3.7%, before rising to 7.1% by July 2020 (source: Bureau of Labor Statistics).

SO THEY SAY – As of 8/28/20, the top 3 countries in the world for reported deaths from the COVID-19 pandemic are the USA, Brazil and Mexico. China claims to have suffered just 4,718 deaths, or less than 3% of the death total recorded by the United States (source: Center for Systems Science and Engineering at Johns Hopkins).

WHAT A MESS – American consumers’ demand for paper towels is +25% higher today than it was before the COVID-19 pandemic hit the United States in February 2020 or 6 months ago (source: Procter & Gamble Co.).

DEFEATED BY COVID – The AP college football preseason top 25 rankings include 9 teams that will likely not play a fall 2020 schedule, including # 2 ranked Ohio State and # 7 ranked Penn State (source: Associated Press).