Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: March 22nd, 2021 | 0 Comments

“TIME IN” vs. “TIMING” – The split between “up” and “down” time periods for the S&P 500 index from 1950 to the end of 2020, i.e., the last 71 years, as measured by: Days: 54% up and 46% down; Months: 60% up, 40% down; Quarters: 67% up, 33% down; Years: 73% up, 27% down; 5-Year Rolling Time Periods: 79% up, 21% down; and finally 10-Year Rolling Time Periods: 89% up, 11% down. The S&P 500 consists of 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).

MULTIPLIER – The “American Rescue Plan Act of 2021” includes $1,400 cash payments made to 110 million households. If each taxpayer that received $1,400 had a “marginal propensity to consume” of 60%, the initial taxpayer would save $560 and spend $840, and then in turn the party that received the $840 would save $336 and spend $504, and the next party would save $202 and spend $302, and so on. Ultimately the original $1,400 cash payment would result in $2,100 of economic activity, i.e., $840 + $504 + $302 + . . . (source: BTN Research).

MONEY THAT THEY WILL SPEND – 42% of the $1.9 trillion “American Rescue Plan Act of 2021,” i.e., $800 billion out of the $1.9 trillion, is direct support that will be distributed to households in the form of stimulus payments, unemployment benefits and child tax credits (source: American Rescue Plan Act of 2021).

TRILLIONS TO HELP – The 6 bills (totaling $5.6 trillion of aid) passed by Congress to combat the impact of the pandemic in the last 13 months are 1) HR # 6074 ($8.3 billion in March 2020); 2) HR # 6201 ($3.5 billion in March 2020); 3) HR # 748 aka the CARES Act ($2.3 trillion in March 2020); 4) HR # 6312 aka CARES # 2 Act ($484 billion in April 2020); 5) HR # 133 ($900 billion in December 2020); and 6) HR # 1319 aka the American Rescue Plan Act ($1.9 trillion in March 2021) (source: Congress).

ALMOST HALF OF ADULTS – 46% of American adults experienced a loss of income or they live with someone that experienced a loss of income in the nearly 1-year following President Donald Trump’s declaration of a pandemic-driven “national emergency,” i.e., from 3/13/20 to 2/28/21 (source: Census Bureau).

SAME NUMBER ABOVE AND BELOW – 50% of the 153.8 million Form 1040s that were filed for tax year 2018 (a total of 76.9 million returns) reported less than $40,000 of adjusted gross income (source: IRS).

AND IN THE NEXT YEAR – 2020 was the 10th year in the last 70 years, i.e., 1951-2020, that the US economy had contracted. Our nation’s “gross domestic product” (GDP) shrunk by 3.5% last year. Following the 9 previous “down” years, the US economy has rebounded in the next year with positive growth 7 out of 9 times, growing by an average of +3.3% per year for all 9 “bounce back” years (source: Commerce Department).

AN OPINION – Jamie Dimon, JPMorgan Chase CEO, forecasted on 3/01/21 that “there’s a very good chance you’re going to have a gangbuster economy for the rest of 2021 and easily into 2022” (source: Bloomberg TV).

FED THINKS – The median forecast (released on Wednesday 3/17/21) made by the 11 members of the Federal Open Market Committee (FOMC) for “change in real GDP” during 2021 was +6.5%. Actual GDP (gross domestic product) annual growth has been at least +6.5% just once (1984) in the last 50 years (source: Federal Reserve).

LESS BABIES – The global “total fertility rate” has been cut in half (down 51%) in the last 50 years, falling from 4.922 “births per woman” in 1968 to 2.415 “births per woman” in 2018 (source: The World Bank).

TEN YEARS APART – Banks repossessed just 1,428 homes nationwide in January 2021. Banks repossessed 78,133 homes nationwide in January 2011 (source: Attom Data Solutions).

RIGHT DIRECTION – As of 9am ET on Friday 3/19/21, 8,327 Americans had died from the COVID-19 virus over the previous 7-day period. That’s the 7th consecutive week of declining US death totals from the pandemic and represents a 64% drop in weekly deaths since Friday 1/29/21 (source: NBC News).

LONG OVERDUE – The federal gas tax is 18.4 cents per gallon today, but the tax has not been raised since 10/01/93 or nearly 27 ½ years ago. However 37 US states have raised their respective state gas tax since 2010. Gas taxes are used to fund improvements to highways and bridges (sources: Amer. Society of Civil Engineers).

NOT GOING – 2.17 million freshmen started college in the fall of 2020, down 13% (327,513 fewer students) from the 2.50 million freshmen that began college in the fall of 2019 (source: National Student Clearinghouse).

NICE JOB – Justin Thomas, the # 2 ranked golfer in the world, won $2.7 million on Sunday 3/14/21 with his win at The Players Championship in Florida, the largest payout from a single golf tournament in history (source: PGA).