Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: April 18th, 2022 | 0 Comments

DOWN YTD – The S&P 500 is down 7.5% YTD (total return) through the close of trading last Thursday 4/14/2022 (the stock market was closed on Friday), the completion of the first 15 weeks of 2022. 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).

HARD TO CATCH UP – A 30-year old who is investing $500 at the beginning of every month in a tax-deferred 401(k) will accumulate $588,032 by age 60 if the funds grow at +7% per year. If that individual was forced to suspend his/her monthly deferral for just 5 years from ages 35-39, he/she would have to earn +8.8% per year from ages 40-60 to accumulate $588,032 by age 60. This mathematical calculation ignores the impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment. Actual results will fluctuate with market conditions and will vary (source: BTN Research).

HIGH, LOW – For the 9 years from 1973-1981, inflation (using the “Consumer Price Index”) averaged +9.2% per year. For the 9 years from 2012 to 2020, inflation averaged +1.6% per year (source: Bureau of Labor Statistics).

BIG CHANGE – Inflation, using the “Consumer Price Index” as the measurement, was up +8.5% for the 1-year ending 3/31/2022. That’s more inflation than the United States experienced over the 4 years of 2017-2020 when the CPI advanced +7.9% over the entire 4 years (source: Department of Labor).

BLAME IT ON INFLATION – 63% of 2,062 American adults surveyed during the first week of April this year rate the condition of the US economy to be “fairly bad” (32%) or “very bad” (31%). The dominant reason that these individuals were disappointed in the US economy: inflation and the rising cost of goods and services (source: CBS News/YouGov survey).

DISAPPEARING ACT – 60% of American workers born in 1943 were employed by companies that provided a defined benefit pension plan. Just 6% of American workers born in 1964 were employed by companies that provided a defined benefit pension plan (source: Center for Retirement Research).

TIGHT CLUSTER – Less than 4% of the counties in the United States (112 counties out of 3,142 total counties nationwide) are home to 50% of all non-farm jobs in the country (source: Federal Reserve Bank of St. Louis).

HOUSING SHORTAGE – The United States is an estimated 3.8 million homes short of the demand that exists in the country for single-family homes (source: Freddie Mac).

WHO WILL BUY THE LAND? – 70% of the ownership of farmland in the United States will change hands during the next 20 years as the current group of farmers and ranchers retire (source: Department of Agriculture).

SUPPLY OF BONDS TO RISE – After 2 years of adding $120 billion a month of bond purchases, aka “Quantitative Easing,” the Fed will begin “Quantitative Tightening” in May 2022 by allowing $95 billion a month of bonds to “roll-off” its $8.5 trillion balance sheet, i.e., the Fed will not reinvest $95 billion a month of maturing bonds back into newly issued bonds ($60 billion of Treasuries and $35 billion of mortgage-backed securities) (source: Federal Reserve).

MAKE IT SEVEN? – Since payments on federal student loans were suspended for 6 months by the CARES Act on 3/27/2020, Presidents Trump and Biden have extended the original end date 6 times (twice by Trump and 4 times by Biden), most recently on 4/06/2022. The suspension is now good to 8/31/2022 (source: BTN Research).

NOT IN RUBLES – Russia has until Wednesday 5/04/2022 to pay $2.2 billion of foreign debt that was originally due to be paid to an American bank on 4/04/2022. If Russia is unable to repay the debt in US dollars as it is required to do, the default on foreign debt would be Russia’s first since 1917 or 105 years ago (source: AP).

OPEN ARMS – As of Thursday 4/14/2022, 57% of the 4.7 million Ukrainians (2.7 million people) that have fled their country since 2/24/2022 have escaped to Poland, a nation of 38 million people (source: United Nations).

GET A NEW START – Personal bankruptcies in the United States in 2021, i.e., nonbusiness bankruptcies, totaled 399,269, down 24% from 522,808 personal bankruptcy filings from 2020 (source: United States Courts).

JOKER – On Thursday 4/07/2022 Denver Nugget basketball star Nikola Jokic, the reigning NBA MVP, became the first player in league history to achieve 2,000 points, 1,000 rebounds and 500 assists during regular season play. The closest Michael Jordan came to the same feat was during the 1988-89 regular season when MJ recorded 2,633 points, 652 rebounds and 650 assists (source: NBA).