Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: November 2nd, 2020 | 0 Comments

AFTER TEN MONTHS – With just 2 months to go in calendar year 2020, the S&P 500 is up +2.8% YTD (total return) as of the close of trading on Friday 10/30/20. Over the last 30 years (1990-2019), November and December have ranked as the # 1 and # 3 “best months” for the S&P 500. 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).

BONDS BEAT STOCKS? – The bond market was up +6.4% YTD (total return) through last Thursday 10/29/20. Bonds have beaten the performance of stocks (using the S&P 500) in 2 of the last 10 years (2011 and 2018). 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).

OWNERS AND RENTERS – The 126.7 million households in the United States as of 9/30/20 were split 67/33 between 85.4 million owners and 41.3 million renters (source: Census Bureau).

BEST EVER – The US economy rose a record +33.1% in the 3rd quarter 2020, i.e., quarter-over-quarter change expressed as an annualized result. In reality, the economy as of 9/30/20 is only +7.41% larger than the size of the economy as of 6/30/20 after removing the impact of inflation. A +7.41% gain occurring for 4 consecutive quarters, i.e., (1.0741) ^ 4 = 1.331, equals a +33.1% annualized advance (source: Department of Commerce).

BAD, BUT NOT THAT BAD – The 3/27/20 CARES Act included $139 billion of relief for the 50 US states. From 2/29/20 to 8/31/20, the tax revenue collected by all US states is down $30 billion over the same 6-month period from a year earlier. When the CARES Act was being debated in Congress, US governors requested financial support of $500 billion from lawmakers (source: National Governors Association).

RENTING IN THE BIG APPLE – As of 9/01/20, the median rent of apartments in Manhattan (NY), was down 11% on a year-over-year basis. The median rent of Manhattan studio apartments is down 17% year-over-year (source: Miller Samuel Inc. and Douglas Elliman Real Estate).

MORE NOVACANE PLEASE – Americans are projected to spend 38% less at the dentist in 2020 than they did in 2019 (source: American Dental Association).

THE MOST PAID – The maximum Social Security benefit paid to a worker retiring at full retirement age in 2021 is $3,148 per month, more than double the $1,536 per month maximum benefit paid 20 years earlier in 2001 (source: Social Security).

PURE MICHIGAN – The $18 billion of municipal bonds that the city of Detroit defaulted on in 2013 is the largest municipal bond default in US history (source: Federal Reserve Bank of St. Louis).

A LOT LESS RISKY – In the 10 years prior to February 2020, only 5% of municipal bonds offerings (measured by dollar) included insurance coverage purchased by the borrower, i.e., insurance that would make municipal bonds investors whole in the event of a default by the municipality (source: Municipal Market Analytics).

WORK FROM HOME – 65% of Americans surveyed in late June 2020 have internet capabilities that are fast enough to support workable video conferencing (source: Stanford Institute for Economic Policy Research).

THE ONLY GAME THEY PLAY – The breakeven price of oil for Saudi Arabia in 2020 is $78 a barrel. 80% of the total government revenues in Saudi Arabia come from the sale of oil. The price of oil closed at $35.79 a barrel (West Texas Intermediate) on Friday 10/30/20 (source: Statista).

BUCKEYES KNOW – The state of Ohio has correctly backed the winner of the US presidential election in each of the last 14 races for the White House, i.e., 1964-2016 (source: USConstitution.net).

WHOOPS – On the day of the 11/08/16 election, the political website “FiveThirtyEight” projected a 71.4% chance that Hillary Clinton would win the 2016 presidential election with 302 Electoral College votes, 70 votes more than she ultimately received (source: fivethirtyeight.com).

THEY DO GET A FREE EDUCATION – If Alabama was to pay Head Coach Nick Saban $2.37 million in an annual salary and pay every one of the 126 players on the Alabama football roster $55,000, they would be out-of-pocket the same $9.3 million they currently pay Saban and $0 they pay to the 126 players. $2.37 million is the cutoff to rank in the top one-tenth of 1% of all US taxpayers. $55,000 is the cutoff to rank in the top 40% of all US taxpayers (source: University of Alabama, IRS).