Bill’s By The Number$

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

WHEN THE FED LAST RAISED RATES – Between 12/14/16 and 12/19/18, the Fed raised short-term interest rates 8 times (0.25 percentage points each time). Between 12/14/16 and 12/19/18, the S&P 500 increased +15.8% (total return) in aggregate over the 2-years. 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).

TWO OPINIONS – Morgan Stanley predicted on Monday 11/15/21 that the S&P 500 would fall to 4400 by 12/31/22, while the next day (11/16/21) Goldman Sachs forecasted that the S&P 500 would rise to 5100 by 12/31/22. The S&P 500 closed last week (Friday 11/19/21) at 4698 (source: Morgan Stanley, Goldman Sachs).

USE TIME TO YOUR ADVANTAGE – $522 invested at the beginning of every month for 40 years earning 6% per year will accumulate to $1 million. $1,021 invested at the beginning of every month for 30 years earning 6% per year will accumulate to $1 million. The calculations ignore the impact of taxes and are for illustrative purposes only and are not intended to reflect any specific investment alternative (source: BTN Research).

TAXES – HR # 5376, aka “The Build Back Better Act,” is estimated to raise taxes on the top 1% of US taxpayers and lower taxes on the other 99% of taxpayers. The top 1% of taxpayers, approximately 1.4 million tax returns, would see an average annual federal tax increase of $54,360 (source: Tax Policy Center).

THE HIGHEST RATE TO PAY – The highest individual marginal tax rate in 2022 (37% under current law) comes into play for single taxpayers at $539,000 of taxable income and at $647,850 of taxable income for married filing jointly taxpayers (source: IRS).

AT LEAST A FEW DAYS AT HOME – 25% of 2,050 full-time workers surveyed in September 2021 say they would quit their job if their employer completely eliminated the “work-from-home” option in a post-pandemic world (source: 2021 State of Remote Work).

DIFFERENT PIECES OF THE PIE – The “Consumer Price Index” (CPI) increase of +6.2% on a year-over-year basis as of 10/31/21 included a “food” increase of +5.3%, a “gasoline” increase of +49.6%, an “electricity” increase of +6.5%, a “used cars and trucks” increase of +26.4%, and a “medical care services” increase of just +1.7% (source: Bureau of Labor Statistics).

HAVE TO MOVE QUICKLY – For the 12 months ending 6/30/21, US homes for sale were on the market for a median period of just 7 days before going under contract. That’s the shortest period recorded nationwide in data that has been tracked since 1989 or more than 3 decades (source: National Association of Realtors).

WHAT CHOICE DID THEY HAVE? – 63% (i.e., 5 out of every 8) of home buyers in the United States and Canada during calendar year 2020 made at least 1 offer to buy a home based only on a “virtual” tour of the home, i.e., they never step foot in the home before making that offer (source: New York Times).

THAT’S NOT NORMAL – The average home in the United States has appreciated +23.4% in the 17 months from 3/31/20 (as the pandemic was beginning) to 8/31/21. For the 8 “Mountain” states tracked (Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico), the average price increase over the 17 months has been +30.9% (source: Federal Housing Finance Agency).

QUESTION THE STATUS QUO – 71% of 1,025 high school teenagers (ages 14-18) surveyed in May 2020 were “likely to pursue” a 4-year college degree. Just 48% of 1,052 high school teenagers surveyed in September 2021 were “likely to pursue” a 4-year college degree. Many teenagers want to “forge their own educational path” and are seeking information on other post high school career options (source: ECMC Group).

JUST AN AVERAGE CAR – The average new car purchased in the United States in September 2021 cost $45,031, an all-time record price and up +12.1% from $40,159 as of September 2020 (source: Kelley Blue Book).

SLOW MOVING – Ships carrying containers traveling from China to the United States travel at a speed of 16-18 mph (source: Freightos).

SUPPLY CHAIN – The average product purchased by an American consumer today has internal components that are manufactured in 10 different countries (source: Jeremy Nixon, CEO of Ocean Network Express).

COLLEGE FOOTBALL – The Cincinnati Bearcats football team was ranked # 3 by AP as of 11/15/21. Cincinnati has finished a season in the AP’s top 10 poll just twice (2009 and 2020) in its history (source: AP).