Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: March 15th, 2021 | 0 Comments

STOCKS AND HIGH INFLATION – During the 15 highest inflation years (using the “Consumer Price Index” as the benchmark) over the last 100 years, i.e., 1921-2020, the S&P 500 stock index has been “up” 7 years and “down” 8 years. The index’s average performance for the 15 years is +2.5% per year (total return). 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).

SINCE THEN – President Trump declared the coronavirus pandemic a “national emergency” on Friday 3/13/20. Over the 1-year since that announcement, i.e., Monday 3/16/20 through last Friday 3/12/21, the S&P 500 gained +48.0% (total return), in spite of a horrible 12.0% loss (total return) on Monday 3/16/20 (source: BTN Research).

PUT IT ON THE CARD – In the 1-year since the declaration of a “national emergency” on 3/13/20, the US national debt has increased $4.46 trillion from $23.44 trillion to $27.90 trillion (source: Treasury Department).

RISING RATES – From its all-time closing low of 0.501% on Monday 3/09/20, the yield on the 10-year Treasury note has more than tripled to close at 1.634% as of last Friday 3/12/21 (source: Treasury Department).

ADDING TO CASH – Money market funds in the United States, including retail and institutional funds, both taxable and tax-free, have increased $615 billion (to $4.39 trillion) over the last 12 months through last Friday 3/12/21, an average increase of $12 billion a week (source: Investment Company Institute).

BY PARTY – In the last 100 years (1921-2020), Republicans have a 52-48 edge over the Democrats in “years in the White House.” Inflation (using the “Consumer Price Index” benchmark) has been +1.9% per year during the Republicans’ 52 years, while inflation has been +3.4% per year during the Democrats’ 48 years (source: DOL).

BLAME THE PANDEMIC – Total exports of goods and services by American corporations in calendar year 2020 were $2.13 trillion, down 16% from the year before and the smallest total recorded nationwide since 2010 (source: Bureau of Economic Analysis).

WHO IS RIGHT? – In a 2/10/21 speech to the Economic Club of New York, Federal Reserve Chair Jerome Powell said, “published unemployment rates (from the Department of Labor) during COVID have dramatically understated the deterioration in the labor market.” He speculated an accurate jobless rate as of 1/31/21 was “close to 10%.” As of 1/31/21, the official national jobless rate was 6.3% (source: Federal Reserve).

YEAR-OVER-YEAR IMPROVEMENT – The aggregate earnings per share of the companies in the S&P 500 in the 1st quarter 2021 are forecasted to be +21.5% greater than the actual aggregate earnings per share of the S&P 500 companies from the 1st quarter 2020 (source: FactSet).

NEW BUSINESSES – The 4 top months for “business applications” in US history have occurred since July 2020, i.e., during the pandemic. The all-time monthly record (582,334 applications) was set in July 2020, followed by January 2021 (497,539), September 2020 (463,175) and August 2020 (430,489) (source: Census Bureau).

TAXES – The American Institute of CPAs (AICPA) sent a letter on 3/04/21 to the commissioner of the IRS requesting a 2-month delay of the 2021 tax deadline, i.e., from 4/15/21 to 6/15/21. The organization believes that filing obligations due a month from today are “simply not possible for many taxpayers” (source: AICPA).

REALLY RICH FOLKS – Senator Elizabeth Warren (D-MA) proposed on 3/01/21 the “Ultra-Millionaire Tax Act” that would impose an annual wealth tax on households with at least a $50 million net worth. The tax would begin in 2023 and would impact an estimated 100,000 US households (out of 126 million total US households). The bill’s tax rate is 2% on estates between $50 million and $1 billion, rising to 3% on estates valued in excess of $1 billion. For Jeff Bezos, worth $181 billion as of the close of trading on Friday 3/12/21, the wealth tax would cost him $5.4 billion annually at his current net worth level (source: www.warren.senate.gov).

NOT WHAT IT USED TO BE – To rank in the top 1% of US taxpayers took $85,428 of adjusted gross income (AGI) in 1981. To rank in the top 25% of US taxpayers took $87,044 of AGI in 2018 (source: Internal Revenue Service).

THEY NEED MONEY – Hawaii’s state Senate passed legislation last week (3/09/21) to increase its top marginal tax rate to 16% (from 11% today) on taxable income of more than $200,000. The bill, which would give Hawaii the highest marginal tax rate in the nation, moves onto the Hawaii state House for debate (source: Hawaii Senate).

LIKE FATHER, LIKE SON – Both Cecil Fielder (who played 13 MLB years) and his son Prince Fielder (who played 12 MLB years) each hit 319 home runs in their respective major league baseball careers (source: MLB).