Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: December 14th, 2020 | 0 Comments

ELECTION YEAR – The S&P 500 was up +15.4% YTD (total return) through Friday 12/11/20. Assuming the index finishes up for the year, the S&P 500 will have recorded a positive total return in 18 of the last 20 presidential election years. The only “down election years” dating back to 1944 were in 2000 and 2008. 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).

ALL WERE TOO LOW – A year ago (12/16/19), Barron’s published the year-end 2020 forecast for the S&P 500 made by 10 Wall Street strategists. The 10 predictions ranged from a low of 3000 to a high of 3500. The index’s 12/31/19 actual close was 3231. The S&P 500 closed last Friday 12/11/20 at 3663 (source: Barron’s).

ALL WERE TOO HIGH – A year ago (12/16/19), Barron’s published the year-end 2020 forecast for the yield on the 10-year Treasury note made by 10 Wall Street strategists. The 10 predictions ranged from a low of 1.50% to a high of 2.20%. The 10-year note’s actual yield close on 12/31/19 was 1.91%. The yield on the 10-year Treasury note closed last Friday 12/11/20 at 0.90% (source: Barron’s).

LATE IN THE YEAR – After closing at an all-time high on Tuesday 12/08/20, the S&P 500 is assured of achieving its calendar year high during the month of December in 6 of the last 8 years (source: BTN Research).

THE FED – 4 of the 6 current members of the Federal Reserve’s Board of Governors were appointed during President Trump’s 4-years in office – Richard Clarida, Randal Quarles, Michelle Bowman and Christopher Waller. There remains 1 vacancy on the 7-member Board of Governors (source: Federal Reserve).

ONE-PERCENTERS – To rank in the top 1% of US taxpayers for the 2018 tax year required adjusted gross income (AGI) of at least $540,009. That highly paid group received 21% of all AGI reported nationwide but they also paid 40% of the federal income tax that was collected (source: Internal Revenue Service).

FIVE-PERCENTERS – To rank in the top 5% of US taxpayers for the 2018 tax year required adjusted gross income (AGI) of at least $217,913. This group received 36% of all AGI reported nationwide but they paid 60% of the federal income tax that was collected (source: IRS).

TAXES – The top 3% of US taxpayers in tax year 2018 reported at least $286,106 of adjusted gross income (AGI) but paid 53% of all federal income tax. The 97% of taxpayers who reported less than $286,106 of AGI paid the remaining 47% of federal income tax that was collected in tax year 2018 (source: IRS).

TAKE THE OTHER GUY’S MONEY – 67% of 3,477 Americans surveyed in early November 2020 believe that federal income taxes should be raised for any taxpayer making $400,000 or more (source: SurveyMonkey.com).

GET OUT THE VOTE – Voter turnout increased in the November 2020 election when compared to voter turnout from November 2016 in 98% of the nation’s 3,142 counties (source: National Election Pool).

COVID-19 DEATHS – Approximately 40% of the American death toll from COVID-19 as of Sunday 12/06/20 are elderly patients in long-term care facilities across the country (source: Dr. Moncef Slaoui, Operation Warp Speed top scientist).

HELP FOR COLLEGE STUDENTS – The Department of Education announced on Friday 12/04/20 a second extension through 1/31/21 of the forbearance period on federal student loans. The forbearance plan, i.e., a pause in required principal and interest payments, began on 3/13/20 and was to expire on 9/30/20, but was extended on 8/21/20 through the end of this year. 92% of all student loans (by dollar) are federal loans, with the remaining 8% being loans that were originated by a private lender (source: Department of Education).

WORSE DURING A PANDEMIC – In the 6 months following the 9/11/01 terrorist attacks on the US, the commercial airline industry in the United States suffered losses of $10.3 billion (stated in 2020 dollars). In the first 6 months of calendar year 2020, i.e., 1/01/20 through 6/30/20, the commercial airline industry in the United States suffered losses of $14.9 billion (source: USA Facts).

IT HAS BEEN AWHILE – Congress has passed 4 separate bills providing $2.8 trillion of pandemic relief, but the last of the 4 bills (HR 6312) was signed into law on 4/24/20 or nearly 8 months ago (source: Congress).

SAFE TO PLAY – The total rounds of golf played by Americans is projected to increase by 50 million rounds in 2020, the largest year-over-year growth in 23 years. In 1997, spurred on by the appeal of a then 21-year old Tiger Woods, the number of rounds increased by 63 million rounds (source: National Golf Foundation).