Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: February 8th, 2021 | 0 Comments

TEN YEARS – Since 1950, there have been 62 different 10-year periods (i.e., the 10-years from 1950-59, 1951-60, . . ., 2011-2020). The S&P 500 produced a positive total return in 60 of the 62 decade-long periods. 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).

ONE STOCK, ONE MONTH – The top performing individual stock in the S&P 500 index during January 2021 was up +49% for the month (source: S&P).

NOTHING – 76% of 619 millennials surveyed in the 4th quarter 2019 do not believe Social Security will exist when they retire. Millennials were born between 1981-97 and are ages 24-40 in 2021 (source: Transamerica).

HISTORIC NEED FOR MONEY – The Treasury Department is expected to auction this week $126 billion of 3-year notes ($58 billion), 10-year notes ($41 billion) and 30-year bonds ($27 billion), an all-time quarterly debt auction record amount (source: Treasury Department).

JOBS – The Congressional Budget Office forecasted on 2/01/21 that the number of employed Americans (150.0 million as of 1/31/21) will not recover to its pre-pandemic level of 158.7 million until 2024 (source: CBO).

WILL CONGRESS AGREE? – The $1.9 trillion COVID-relief plan as outlined by the Biden administration includes $350 billion in aid to state and local governments, $400 billion for pandemic vaccination, testing, tracing and for the reopening of schools, $600 billion in direct aid to families (the $1,400 per person stimulus payments), $400 billion in jobless benefits, and $150 billion in “Paycheck Protection Program” (PPP) loans/grants for small businesses (source: The Brookings Institution).

IT HAS BEEN DONE BEFORE – Congressional Democrats are using “budget reconciliation” to move President Joe Biden’s $1.9 trillion COVID-relief plan through the Senate. “Reconciliation bills” are not subject to the “filibuster rule” that ends debate on a piece of legislation only after 60 senators agree to do so, i.e., it would take just 51 senators (instead of 60) to approve the COVID-relief bill. Congress has used the “budget reconciliation” process to enact 21 bills in the last 40 years (source: Center on Budget and Policy Priorities).

NEGOTIATING WITH THE BANK – As of the end of October 2020, just 3.0 million homeowners with mortgages were in a forbearance plan with their lender, representing 5.6% of all homeowners with mortgages and only 3.6% of all homeowners (source: Black Knight Mortgage Monitor).

THOUGHT IT WOULD BE HIGHER – 522,808 Americans filed bankruptcy in 2020, down 30% from 752,160 bankruptcy filings in 2019 (source: United States Courts, Table F-2, Bankruptcy Filings).

WERE YOU IN ON THIS? – 5.6 million existing homes were sold in 2020, the highest number recorded in the United States since 2006 (source: National Association of Realtors).

GREATER THAN INFLATION – Wages and salaries in the private sector increased +2.8% during calendar year 2020. Wages and salaries in the public sector (i.e., local and state government workers) increased +1.8% during calendar year 2020. Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020. (source: Department of Labor).

JUST ONE OF FIFTY STATES IMPROVED – The unemployment rate in 49 of 50 US states increased between December 2019 and December 2020. Hawaii had the greatest jobless rate jump (up 6.6 percentage points from 2.7% to 9.3%). South Dakota was the only state to report a lower jobless rate last year, dropping from 3.4% to 3.0% (source: Bureau of Labor Statistics).

HUNT FOR HIGHER YIELD – The average current yield on “CCC” rated corporate bonds (as rated by S&P) was 7.6% in January 2021, within 0.3 percentage points of the lowest average yield ever recorded for this “junk bond” rated category, i.e., an all-time low of 7.3% was set in 2014. The current yield of bonds drops as investors bid up the price of the bonds (source: Ice Data Services).

GENTLEMAN FARMER – Bill Gates is the largest private owner of farmland in the United States with 242,000 acres. His largest holdings are in Louisiana, Arkansas and Nebraska (source: The Land Report).

SPRING (AND SNOW) IS IN THE AIR – Training camps for major league baseball teams open this month. The minimum salary for a major league baseball player for 2021 is $570,500. To rank in the top 1% of all US taxpayers (based upon 2018 tax data) required an adjusted gross income level of at least $540,009 (source: MLB).