Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: September 28th, 2020 | 0 Comments

FINAL QUARTER – Over the last 30 years (1990-2019), the S&P 500 stock index has gained an average of +4.7% (total return) over the final 3 months of the year (October-November-December). 24 of the last 30 fourth quarters (80%) have produced a positive total return gain. 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).

COULD HAVE BEEN WORSE – The 9.1% drop in the size of the US economy between the 2nd quarter of 2019 and the 2nd quarter of 2020 was a smaller decrease than the decline that took place in India (down 25.2%), the UK (down 20.4%), Mexico (down 17.1%), France (down 13.8%), Italy (down 12.8%) and Canada (down 11.5%) (source: Organization for Economic Cooperation and Development).

BANKS – 21 banks have failed in the last 5 years (through 9/25/20), requiring a financial bailout from the Federal Deposit Insurance Corporation, about 4 failures per year. By comparison, 127 banks had failed YTD through this point in calendar year 2010, i.e., YTD through 9/25/10, about 3 failures per week (source: FDIC).

ARE THEY READY? – Stress tests conducted on 34 major US banks project that the pandemic could result in as much as $700 billion of bank losses. The forecast, released on 6/25/20, stated that US banks “can remain strong in the face of even the harshest shocks” (source: Federal Reserve).

LOTS OF PEOPLE – 22% of Americans (74 million people) are on Medicaid, the nation’s health care program for low-income Americans that is jointly funded by the federal government and all 50 states (source: Medicaid).

BIG DEBT – Our national debt has grown from $22.623 trillion on 9/24/19 to $26.786 trillion on 9/24/20, an increase of $4.163 trillion. That’s equivalent to adding $11.4 billion of new debt per day, or $475 million per hour, or $7.9 million per minute, or $132,000 per second over the past year (source: Treasury Department).

DEBT LIMIT – Legislation signed by President Donald Trump in July 2019 suspended our country’s debt ceiling limit until 7/31/21, i.e., there is no statutory limit on our nation’s borrowing for the next 10 months. The debt ceiling has been raised, temporarily extended or suspended 87 times since 1960 (source: Treasury Department).

14-YEAR HIGH – New residential construction in the US totaled 139,100 housing units in July 2020, its highest monthly total recorded since September 2006. The total includes 93,100 single family homes, 700 apartment buildings with 2-4 units and 45,300 apartment buildings with 5 or more units (source: Census Bureau).

LARGER LOAN – On 1/02/20, the national average interest rate for a 30-year fixed rate mortgage was 3.72%, producing a $461 monthly “principal and interest” payment per $100,000 borrowed. The same $461 payment at last week’s 2.90% national average would allow a home buyer to borrow $110,855 (source: Fannie Mae).

JOBS IMPACT – Before the COVID-19 pandemic hit the United States, the number of out-of-work Americans as of 2/29/20 was 5.79 million. As of 8/31/20, the number of out-of-work Americans was 13.55 million. Thus in the last 6 months, the pandemic is in part behind 7.76 million people losing their jobs (source: Department of Labor).

VOTING – The 2020 elections in the US take place 36 days from today. On 11/03/20, Americans will vote for a President, all 435 members of the House and 33 members (out of 100) of the Senate (source: Congress).

HOPE THEY ARE RIGHT – 159 of 224 global money managers surveyed (71%) in September 2020 anticipate that a “credible vaccine” for the COVID-19 pandemic will be found by 1/30/21 or within 4 months. The 224 managers oversee $600 billion of assets (source: Bank of America’s Global Fund Manager Survey).

DEATHS – The White House announced on 3/31/20 (6 months ago) that the death toll from the pandemic could be 100,000 to as high as 240,000. As of Friday 9/25/20, the death count was 204,057 (source: Johns Hopkins).

WHEN IS YOUR BIRTHDAY? – With 57 people in a room, there is a 99% chance that 2 people in the group have the same birthday. With 32 people in a room, there is a 75% chance that 2 people in the group have the same birthday. With just 23 people in a room, there is a 51% chance that 2 people in the group have the same birthday (source: BTN Research).

GOLF ON TV – Fox Sports bought the rights for $1.1 billion (or $93 million per year) to telecast the US Open golf major for the 12 years from 2015-26. When the pandemic pushed the US Open from mid-June to mid-September this year, Fox was faced with scheduling conflicts due to its existing college and pro football TV schedule. The solution: NBC Sports bought the broadcasting rights for the 7 years from 2020-26 (source: NBC).