Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: June 21st, 2021 | 0 Comments

STOCKS AND POLITICS – In the last 60 years (1961-2020), the S&P 500 has been up +17.5% per year (total return) under a Democratic President and a Republican-led Congress, nearly 4 times the +4.5% annual return achieved under a Republican President and a Congress controlled by the Democrats. The stock index gained +11.8% per year when the White House and Congress were controlled by the same political party, as is the present situation in Washington in 2021. When the House and the Senate were controlled by different parties (regardless of which party is in the White House), the S&P 500 has been up +11.3% per year. 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).

STOCKS AND INFLATION – In the last 70 years (1951-2020), inflation as measured by the “Consumer Price Index” (CPI) was been at least +5% in 12 different years, most recently in 1990. The S&P 500 has been equally split over the 12 high-inflation years, advancing in 6 years and falling in 6 years (on a total return basis). The average return for the S&P 500 over all 12 years is a gain of just +3.2% (total return) (source: BTN Research).

IT’S NOT THE FOREIGNERS THAT ARE BUYING – Between March 2020 and March 2021, foreign investors increased their holdings of Treasury securities just slightly, going from $6.9 trillion to $7.0 trillion. Between March 2020 and March 2021, the Federal Reserve increased their holdings of Treasury securities by just short of $2 trillion, going from $3.0 trillion to $4.9 trillion (source: Federal Reserve).

AT A MINIMUM – The Treasury Department maintains a “checking account,” aka the Treasury General Account with a minimum balance of $150 billion. As of Wednesday 6/09/21, the Treasury General Account had a balance of $730 billion. The US government is forecasted to spend $20 billion a day during fiscal year 2021, i.e., the 12 months ending 9/30/21 (source: Treasury Department).

BIT OF A LAG TIME – The USA has officially been in a recession since February 2020. The next most recent US recession ran for 18 months from December 2007 to June 2009. The official declaration that the 2007-2009 recession had ended was made on 9/20/10 or nearly 15 months after the recession’s official end date (source: National Bureau of Economic Research).

HALF – 51% of the $64.2 trillion forecasted by the Biden White House that the US government will spend over the next 10 fiscal years, i.e., fiscal year 2022 through and including fiscal year 2031, are outlays for Social Security, Medicare and Medicaid (source: Budget of the U.S. Government released 5/28/21).

A THIRD – 33% of the $7.25 trillion that the US government is forecasted to spend in the 2021 fiscal year are outlays for Social Security, Medicare and Medicaid (source: Budget of the U.S. Government released 5/28/21).

FEWER CHOICES – There were 1.16 million existing homes for sale nationwide as of 4/30/21. The 1.03 million “for sales” as of 2/28/21 was the lowest level ever reported for a statistic that has been tracked since 1999 (source: National Association of Realtors).

NOW WHAT HAPPENS? – The renter eviction moratorium originally issued by the Centers for Disease Control and Prevention (CDC) on 9/04/20 will expire in 9 days on 6/30/21 unless extended to a later date (source: CDC).

ASKED TO LEAVE – US landlords of rental properties file an average of 3.7 million eviction notices against renter households in a calendar year (source: The Eviction Lab at Princeton University).

PANDEMIC – US deaths from COVID-19 over the prior week (measured Friday-to-Friday) were 2,231 as of last Friday 6/18/21, down 90% from the 23,180 weekly deaths recorded as of Friday 1/15/21 (source: NBC News).

NO TURNING BACK – 42% of 1,046 full-time American workers surveyed in early March 2021 said they would quit their jobs if their employer did not allow them to continue to “work from home” permanently and they would seek new employment with a company that does (source: Prudential’s Pulse of the American Worker Survey).

YOU THINK YOU’RE RICH – As of the close of trading last Friday 6/18/21, 8 Americans are worth more than $100 billion each. The richest of the 8 mega-billionaires was worth $200.5 billion (source: Forbes).

JUST KEEPS RUNNING – The average car on the road in the USA at the end of 2020 was 12.8 years old, up from 10.2 years old as of the end of 2005 (source: IHS Markit).

HOOPS HISTORY – The most recent NBA title among the 7 remaining teams in the NBA playoffs (as of Friday morning 6/18/21) is the 1983 championship won by the Philadelphia 76ers or 38 years ago (source: NBA).