Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: May 8th, 2022 | 0 Comments

STOCKS – The S&P 500 is down 13.1% YTD (total return) through 5/06/2022. The split between “up” and “down” trading days YTD is 44/56, compared to the 54/46 split achieved over the years 1950-2021. 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).

CONTRARIANS – The S&P 500 was up +0.2% on a total return basis over the 1-year ending 4/30/2022. The last 7 times (taking place since 2010) that the index recorded a negative total return result over a trailing 12-month period, the index bounced back each time with a positive gain of at least +15% (total return) over the next 12 months. The 1-year average return of all 7 comebacks is +27.6% (total return) (source: BTN Research).

DECLINES HAPPEN – With its closing of 4123 on Friday 5/06/2022, the S&P 500 index is down 14.0% from an all-time closing high of 4797 set on 1/03/2022. The decline is the index’s 21st tumble of at least 10% (but less than 20%) in the last 50 years but is its 5th since 2015. Declines of at least 10% but less than 20% from a previous closing high are called “corrections” (source: BTN Research).

TOOK A BITE OUT OF IT – The largest capitalized stock in the United States was worth $2.57 trillion as of 4/30/2022 even though the stock fell in value 9.7% ($277 billion) in April 2022 (source: BTN Research).

ROARING BEAR – The NASDAQ Composite is down 22.2% YTD (total return) through the close of trading last Friday 5/06/2022, and is down 24.1% (total return) from its all-time closing high set on 11/19/2021. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).

UP AND UP – The yield on the 10-year Treasury note on 5/06/2020 (2-years ago) was 0.71%. The yield on the 10-year Treasury note on 5/06/2022 (last Friday) was 3.12% (source: Treasury Department).

BOND MARKET – The taxable bond market has produced a positive total return gain in 42 of the last 46 years (1976-2021), i.e., 91% of the time, but is on track for its worst year in history, down 10.1% YTD through 5/5/2022. The Bloomberg US Aggregate Bond Index (created in 1986 with backdated history calculated to 1976), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1-year until final maturity, was used as the bond measurement (source: Bloomberg).

FEWER FUTURE TAXPAYERS – The US had 7.27 million births in the back-to-back years 2020-2021, i.e., the pandemic years. That’s the fewest number of American births in back-to-back years in 40 years. The US had 7.24 million births in 1980-1981. 30 years ago (1990-1991), the US had 8.27 million births in back-to-back years (source: National Vital Statistics System).

BANKS – Through the first 4 months of 2022, no US bank had failed and required a financial bailout from the Federal Deposit Insurance Corporation (FDIC). There have been less than 10 banks that have failed in each of the last 7 calendar years, i.e., 2015-2021. 389 banks failed over the 3-year period 2009-2011 (source: FDIC).

HOW WILL THEY RESPOND? – 75% of 3,001 Americans surveyed in February 2022 said that rising inflation “has impacted their finances” (source: Salary Finance Inc.).

MOVE ACROSS THE LINE – California has the highest state marginal tax rate in the nation, with a 13.3% top rate kicking in at $1.25 million of taxable income (joint return) at the state level. Neighboring state Nevada has no federal income tax, 1 of 7 US states with no state income tax (source: Tax Foundation).

VOTING BOOTH – The 2022 midterm elections are 6 months from yesterday (Tuesday 11/08/2022). Republicans lost 42 House seats in the 2018 midterms 2 years into Donald Trump’s presidential term, flipping a 241-194 Republican majority to a 235-199-1 Democratic majority (source: House of Representatives).

A MAJORITY STILL WENT TO COLLEGE – 62.7% of 2020 high school graduates (after the pandemic started) enrolled in college in the fall of 2020. 61.8% of 2021 high school graduates enrolled in college in the fall of 2021 (source: Bureau of Labor Statistics).

IT’S TOO MUCH – 32% of currently enrolled college students have considered withdrawing from school in the past 6 months for at least a semester, primarily due to pandemic stress or monetary pressure (source: Gallup).

LOTS OF OUTS – When the New York Mets beat the Philadelphia Phillies 3-0 on Friday 4/29/2022, 5 Met pitchers threw 159 pitches in no-hitting the Phillies. It was the 20th time in history that the Phillies have been no-hit. That ties the Los Angeles Dodgers for the most times being no-hit in MLB history (source: MLB).