Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: June 20th, 2022 | 0 Comments

ANOTHER BEAR – When the S&P 500 closed at 3667 last Thursday 6/16/2022, the index was down 23.6% from its all-time closing high of 4797 set on 1/03/2022, i.e., qualifying as a “bear” market decline of at least 20%. The drop was the index’s 11th “bear” since 1950 but its 2nd since the start of the global pandemic. 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).

IT MAY TAKE AWHILE – After suffering 10 separate “bear” markets between 1950 and 2021, the S&P 500 recovered and eventually achieved a new all-time closing high each time. The average length of time it took to retrace its steps from a “bear” market low to a new closing high was 25 ½ months or more than 2 years. The quickest recovery for stocks took place over just 3 months (in 1982) while the longest recovery took 70 months or nearly 6 years (between 1974-1980) (source: BTN Research).

TREASURYS – As of the end of fiscal year 2021 (9/30/2021), the Fed held more than twice the level of Treasury securities ($5.4 trillion) as held by Japan ($1.3 trillion) and China ($1.0 trillion) combined (source: CBO).

WOW – The yield on the 10-year Treasury note has more than doubled YTD, rising from 1.496% as of the close of trading on 12/31/2021 to 3.222% as of the close of trading on 6/17/2022. Over the last 60 years (1962-2021), the yield on the 10-year note has never doubled over the course of a calendar year (source: Treasury Department).

BORROWING FOR DIFFERENT REASONS – Mortgages that were originated during the 1st quarter of 2022 were split between 53% for borrowers who were refinancing an existing debt and 47% for borrowers who were purchasing a home (source: Attom Solutions).

GOING DIGITAL – The weekday daily circulation of US newspapers has fallen 57% over the 2 decades between 2000 (55.8 million) and 2020 (24.2 million) (source: Census Bureau).

NOT A HAPPY CAMPER – “Consumer sentiment” of the American shopper, an indicator of how optimistic consumers feel about their finances, fell in June 2022 to its lowest level “Consumer sentiment” has been tracked monthly since January 1978 (source: University of Michigan).

THIS IS NUTS – 36% of US households making at least $250,000 a year in before-tax income are living “paycheck-to-paycheck” (source: Pymnts.com, LendingClub).

NOT PART OF IT – An estimated 5 million American workers are not covered by Social Security. The group, comprised of state and local government workers, are not required to pay “payroll taxes” but are guaranteed by law to receive “comparable” retirement benefits from their employer (source: Center for Retirement Research).

PLEASE STAY AND TEACH – After losing 1,250 full-time teachers at the end of the most recent school year, Omaha Public Schools decided to pay a $4,500 bonus per year to all full-time teachers in their system for each of the next 2 school years, i.e., 2022-2023 and 2023-2024 (source: Omaha World Herald).

TRIPLED IN TWO YEARS – The price of West Texas Intermediate (WTI) crude oil closed at $37.96 a barrel on 6/17/2020 (i.e., 2 years ago). The price of WTI crude oil closed at $109.56 a barrel on 6/17/2022. The all-time record closing high for WTI crude oil is $147.27 a barrel set on 7/11/2008 (source: NYMEX).

STILL EXPENSIVE – The price of lumber more than quadrupled during the pandemic before falling 65% from a 5/02/2021 high but is still +45% higher today than where the price was at the end of 2019. Lumber was trading at $403.60/thousand board feet (MBF) on 12/29/2019, rose to $1,686/MBF on 5/02/2021, but has since fallen back to $585.70/MBF as of Friday 6/17/2022. One board foot is equal to a piece of lumber that is 1 foot in length, 1 foot in width but just 1 inch in thickness (source: Chicago Mercantile Exchange).

END OF LIFE – The median cost of a semi-private room in a nursing home facility is $7,908 per month or $94,900 per year, based on data collected nationally in August 2021 (source: Genworth Cost of Care Survey).

DOWN ON THE FARM – Soybeans were trading for $17.69 a bushel on Thursday 6/09/2022, the highest price ever for the commodity. That broke the previous record for soybeans of $17.68 a bushel set almost 10 years ago in September 2012 (source: Chicago Board of Trade).

THANKS DAD – Rob Walton, the 77-year old eldest son of Sam Walton, bought the NFL’s Denver Broncos for $4.65 billion on 6/08/2022, an all-time record for an NFL franchise. The previous record purchase price was $2.275 billion paid by David Tepper for the Carolina Panthers in May 2018 (source: NFL).