Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: April 26th, 2021 | 0 Comments

THEN WHAT? – The S&P 500 was up +6.2% (total return) in the 1Q 2021, the 42nd time the index has gained at least +6% in a calendar quarter since 1990, i.e., 42 out of 125 quarters (34%). The index has gained an average of +11.6% (total return) in the 12 months following a calendar quarter that was up at least +6%. 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).

AFTER A BIG YEAR – The S&P 500 was up +56.4% (total return) for the 12 months ending 3/31/21, the 8th time the index has gained at least +40% over any 12-month period since 1990. The index has gained an average of +16.3% (total return) in the year following a 12-month period that was up at least +40% (source: BTN Research).

IT’S WHY THEY’RE CALLED JUNK – 1 out of 7 high yield bonds defaulted in 2009 (14%). 1 out of 19 high yield bonds defaulted in 2020 (5.2%). “Junk” or “high yield” bonds are rated below “Baa” by Moody’s or rated below “BBB” by S&P and Fitch (source: Fitch Ratings).

VERY FEW – As of 4/15/21, only 1 out of every 13,000 fully vaccinated Americans contracted the COVID-19 virus after receiving all their shots (source: Centers for Disease Control and Prevention).

IN THE RIGHT DIRECTION – US deaths from all causes (e.g., natural causes, cancer, heart disease, COVID, etc.) for the week ending Saturday 1/02/21 peaked at 84,192 (12,027 per day), but has since fallen for the next 14 weeks to 32,343 deaths for the week ending Saturday 4/10/21 or 4,620 per day (source: CDC).

HOPE HE’S RIGHT – The first of 3 releases by the government on the change in the size of the US economy during the 1st quarter 2021 will be announced on Thursday 4/29/21, aka the “Advance Estimate.” Fed Governor Christopher Waller said on 4/16/21 that the US economy “is ready to rip.” He forecasted that annual growth could be as high as +6.5% in 2021, a growth rate last achieved in 1984 (source: Commerce Department).

HOW IT WAS USED – Households that received stimulus payments via the March 2020 CARES Act (HR # 478) spent 29% of the funds on “consumption,” as opposed to paying down debt, investing or saving the money. Households that received stimulus payments via the December 2020 relief legislation (HR # 133) spent 26% of the funds on “consumption.” Households that have received stimulus payments via the March 2021 “American Rescue Plan Act” (HR # 1319) spent 25% of the funds on “consumption” (source: Federal Reserve Bank of NY).

ALMOST ALL SENT OUT – As of 4/14/21, 159 million stimulus payments totaling $376 billion have been disbursed under the 3/11/21 “American Rescue Plan Act.” 22% of the $1.9 trillion bill, or $411 billion, was scheduled to be paid to eligible Americans in the form of $1,400 payments (source: American Rescue Plan Act).

TAX CHEATERS – The government projected in September 2019 that our nation’s “tax gap,” i.e., the difference between what all taxpayers should have paid compared to what they actually paid, was $441 billion per year. On 4/13/21, IRS Commissioner Charles Rettig testified before the Senate Finance Committee that the “tax gap” could be as high as $1 trillion annually, or more than double the previous estimate (source: IRS).

STATE MONEY – The average US state receives 48% of its tax revenue from sales taxes, 41% from income taxes, 6% from license taxes, and 5% from other taxes (source: Census Bureau).

PANDEMIC IMPACT – New York City tax officials are projecting a $1 billion reduction in property tax revenue to be collected in 2022 vs. 2021, largely due to a drop in the market value of its apartments and commercial real estate (source: New York City Independent Budget Office).

A RECORD – The median sales price of existing homes sold in the United States was $329,100 in March 2021, an all-time record both on a nominal basis (i.e., not adjusted for inflation) and on an inflation-adjusted basis (source: National Association of Realtors).

HARD TO GET OUT – Banks repossessed 7,320 homes nationwide during the first quarter 2021, but it took an average of 930 days (more than 2 ½ years) for a repossession to be completed (source: Attom Data Solutions).

THEY ALL NEED BATTERIES – Electric vehicles sales represented 5% of all passenger car sales globally in 2020. That percentage is projected to increase to 26% in 2030 and 72% in 2040 (source: Statista).

COME PLAY WITH US – The NCAA announced on 4/15/21 that all collegiate athletes will have a “1-time transfer” ability without having to sit out a season. The transfer right previously was not automatically available to football and basketball athletes. The ruling is effective for all college sports beginning this fall (source: NCAA).