Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: July 11th, 2022 | 0 Comments

LOOK-BACK – As of 6/30/2022, the total return of the S&P 500 was down 10.6% for the trailing 1-year, +10.6% per year for the last 3-years, +11.3% per year for the last 5-years and +13.0% per year for the last 10-years. The S&P 500 consists of 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).

DOWN TEN, AND THEN WHAT? – The S&P 500 was down 10.6% (total return) for the year ending 6/30/2022, the 40th time in the last 400 months that the index has been down at least double-digits on a trailing 1-year basis. In the previous 39 times that the index was down at least 10% (total return) for the previous 12 months, the average return for the next 12 months was a gain of +4.2% (total return) (source: BTN Research).

DOWN TWENTY, AND THEN WHAT? – The S&P 500 has been down at least 20% (total return) for the trailing year at the end of 20 months in the last 400 months, most recently as of 6/30/2009. In the 20 times that the index was down at least 20% (total return) for the previous 12 months, the average return for the next 12 months was a gain of +17.1% (total return) (source: BTN Research).

BIG DECLINE – The NASDAQ Composite index has suffered a total return loss in 5 of the first 6 months in calendar year 2022 (only March was up), down 29.2% YTD (total return) as of 6/30/2022. The month of July has provided some performance recovery, up +5.5% (total return) as of last Friday 7/08/2022 (source: BTN Research).

DOUBLE-DOUBLE – The size of the US economy was $718 billion as of 3/31/1965, doubled over the next 9 years to $1.5 trillion as of 3/31/1974, doubled over the next 7 years to $3.1 trillion as of 3/31/1981, doubled over the next 10 years to $6.0 trillion as of 3/31/1991, doubled over the next 11 years to $11.9 trillion as of 3/31/2002 and doubled one last time over the next 20 years to $24.4 trillion as of 3/31/2022 (source: Department of Commerce).

SOMEBODY WAS UP – 13 of the top 14 YTD performers in the S&P 500 as of 6/30/2022 are in the oil and gas business, with YTD performances ranging from up +24.3% YTD to up +103.1% YTD (source: S&P).

RISING COST OF MONEY – The yield on the 10-year Treasury note nearly doubled YTD after the first 6 months of 2022, rising from 1.496% as of the close of trading on 12/31/2021 to 2.973% as of the close of trading on Thursday 6/30/2022. Over the last 60 years (1962-2021), the yield on the 10-year note has never doubled over the course of an entire calendar year (source: Treasury Department).

CRUDE OIL – The highest closing price ever for West Texas Intermediate crude oil (WTI) was $147.27 a barrel, set 14 years ago today on 7/11/2008. WTI crude oil closed at $104.79 a barrel last Friday 7/08/2022, but closed at $123.70 a barrel just 4 months earlier on 3/08/2022 (source: NYMEX).

YOU DON’T GET IT – If you were born on 12/31/1941, by the time you turned 40 years old on 12/31/1981, you had lived through 9 calendar years with at least +7% inflation (as measured by the Consumer Price Index, aka CPI). If you were born on 12/31/1981, by the time you turned 40 years old on 12/31/2021, you had lived through just 1 calendar year with at least +7% inflation, i.e., +7.0% in calendar year 2021 (source: Department of Labor).

THE BARE MINIMUM – The federal minimum wage was last increased to $7.25 an hour nearly 13 years ago on 7/24/2009. 30 states have minimum wage requirements above the federal level while the other 20 states continue to use the $7.25 an hour amount as their wage floor. As of 7/01/2022, San Francisco, CA requires a minimum wage of $16.99 an hour (source: CBS News).

BIG HOUSES – 46% of the 970,000 new single-family homes built nationwide in 2021 (a total of 444,000 homes) have at least 4 bedrooms (source: Census Bureau).

LIVE TOO LONG – 35% of 994 workers interviewed in November 2021 identified their biggest retirement concern was that they may “outlive the retirement savings” accumulated during their working years (source: Principal).

ARE THEY RIGHT? – The average response by 53 economists surveyed in June 2022 puts the chance of a recession in the next 12 months at 44%, up from just 18% in January 2022 (source: WSJ Economic Survey).

ANNOYING PHONE CALLS – 58% of the delinquent debt attempted to be recovered by 3rd party debt collectors in 2021 was outstanding medical debt (source: Consumer Financial Protection Bureau).

PLEASE BUY MY FAVORITE TEAM – Stan Kroenke owns the LA Rams, winners of the 2022 Super Bowl. Kroenke also owns the Colorado Avalanche, winners of the 2022 Stanley Cup. Kroenke, 75 years old later this month, married Ann Walton in 1974. Walton is the niece of Walmart co-founder Sam Walton (source: NFL, NHL).