Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: October 5th, 2020 | 0 Comments

STOCKS AND THE WHITE HOUSE – Based upon performance data from 1936-2019, the S&P 500 has averaged +6.7% per year (total return) during the 1st year of a 4-year presidential term, +8.7% per year during the 2nd year, +18.5% per year during the 3rd year, and +9.4% per year during the 4th year. Next year (2021) will be year # 1 of a 2nd-term Trump administration or year # 1 of a 1st-term Biden administration. 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).

BIG NUMBERS – The NASDAQ Composite is up +25.3% YTD (total return) through the close of trading on 9/30/20. The NASDAQ Composite has gained at least +20% in 4 of the last 11 years, i.e., 2009-2019. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).

REALLY GOOD AND REALLY BAD – As of the close of stock trading on Wednesday 9/30/20, 13 individual stocks within the S&P 500 were up at least +50% YTD while 34 individual stocks were down at least 50% YTD. The return measurement was based upon the change of the individual stock price over a 9-month period and does not include any reinvestment of dividends (source: BTN Research).

GLOOMY – 51% of 1,154 Americans surveyed in early September 2020 fear that the US stock market will decline at least 20% over the upcoming 6 months (source: SimplyWise Retirement Confidence Index).

BONDS – The taxable bond market was up +6.8% YTD (total return) through 9/30/20. The bond market has averaged a gain of +7.5% per year (total return) over the last 40 years, i.e., 1980-2019. 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).

BEING CAREFUL – Since the beginning of 2020, the size of the money market fund industry in the USA (both taxable and tax-free) has grown from $3.63 trillion as of 1/01/20 to $4.40 trillion as 9/30/20, a YTD increase of $770 billion or $20 billion a week (source: Investment Company Institute).

MAYBE NEVER – 31% of 1,018 American workers surveyed in January 2020 anticipate that they will retire at age 70 or later (source: Employee Benefit Research Institute – 2020 Retirement Confidence Survey).

SIMPLER – As a result of the expansion in the size of the standard deduction that was part of the “2017 Tax Cuts and Jobs Act,” only 10% of tax filers itemized in 2018, down from 30% in 2017 (source: Tax Foundation).

WHERE IT COMES FROM – Even though crude oil is produced in 32 US states, just 2 states (North Dakota and Texas) are responsible for 52% of the nation’s crude oil production (source: Energy Information Administration).

BETTER THAN EXPECTED – There are an estimated 7 million college students (both undergraduates and graduate students) attending college for the school year that began in the fall of 2020. Unexpectedly, that total is down just 2% from the prior school year (source: National Center for Education Statistics).

WHAT STATE IS NEXT? – The highest marginal tax rate for state income taxes in New Jersey in 2019 was 75%, effective at taxable income levels above $5 million. On 9/24/20, state legislators lowered the threshold when the top rate of 10.75% comes into play to taxable incomes in excess of $1 million. The change is expected to raise an additional $390 million per year in state tax revenue for New Jersey (source: New Jersey Legislature).

ALL IN THE FAMILY – One political party has controlled the White House, the Senate and the House of Representatives in 22 of the last 60 years, i.e., 1961-2020. Republicans last controlled the White House, the Senate and the House in 2018. Democrats last controlled all 3 in 2010 (source: BTN Research).

DEATHS BY COUNTY – 50% of US counties (1,562 out of 3,142) have experienced 6 or fewer COVID-19 related deaths as of Wednesday 9/23/20. 27% of US counties (839 out of 3,142) have had zero or just 1 COVID-19 death as of Wednesday 9/23/20 (source: USAFacts).

A BIG PERCENTAGE EVEN BEFORE – The pandemic pushed the percentage of adults age 18-29 living with a parent to 52% as of the end of July 2020. Surprisingly, the percentage of adults age 18-29 living with a parent as of the end of January 2020, i.e., before the 1st US COVID-19 death, was 46% (source: Pew Research Center).

HE CAN HIT – New York Yankee DJ LeMahieu won the AL batting title this season, hitting .364. He also won the NL batting title in 2016 with a .348 batting average. It has been 118 years since anyone has won a batting title in both leagues. Ed Delahanty was the top hitter in 1899 in the NL and in 1902 in the AL (source: MLB).