Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: July 25th, 2022 | 0 Comments

TIME IN THE STOCK MARKET – If you selected any single month at random to invest in the S&P 500 during the 30-years ending 6/30/2022, you achieved a positive total return 67% of the time. If you extend your investment time horizon to just 1 year, you achieved a positive total return 83% of the time. If your time horizon was 5 years, you achieved a positive total return 84% of the time. 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).

NEXT TWO MONTHS – The next 2 months (August and September) have been the 2 worst performing months for the S&P 500 over the last 30 years, i.e., 1992-2021. August and September are the only months that have a negative average total return over the last 3 decades, losing 0.15% and 0.30% on average since 1992 (source: BTN Research).

BACK IN BUSINESS – The number of active oil and natural gas drilling rigs in the USA was 792 as of Friday 3/13/2020, the day President Trump declared a national emergency due to COVID-19. That number fell to a pandemic-low of 244 operating rigs just 5 months later (8/14/2020) but has rebounded to 758 operating rigs as of last Friday 7/22/2022 (source: Baker Hughes).

STRONG BANKS – As of 7/20/2022, the last bank in the United States to require a bailout from the Federal Deposit Insurance Corporation (FDIC) was the Almena State Bank of Almena, KS on 10/23/20 or 21 months ago. That’s the 2nd longest stretch without a bank failure in the country in the last 20 years (source: FDIC).

ZOMBIES – An estimated 1 out of every 6 companies (17%) domiciled in industrialized economies worldwide have been able to stay in business throughout the pandemic (and avoid bankruptcy) to a great degree because of low interest rate debt that was made available to them (source: Committee on the Global Financial System).

BIG BUMP – The bond market was priced on 7/22/2022 to reflect a 78.7% chance that the Fed will raise short-term interest rates by 0.75 percentage points on 7/27/2022 following its upcoming 2-day meeting (source: CME Group).

ANNUAL INCREASE – The “cost of living adjustment” (COLA) made to Social Security benefits is calculated based upon the year-over-year increase in prices from the 3rd quarter of subsequent years. The COLA that will be applied to benefits paid in January 2023 will be based on the change of prices from the end of the 3rd quarter 2021 to the end of the 3rd quarter 2022. The COLA increase implemented at the start of 2022 was +5.9%, Social Security’s largest increase since 1982 (source: Social Security).

WORKERS NEEDED – The Social Security Administration estimates it needs a “worker-to-beneficiary” ratio of 2.8 for the system to function on a “pay-as-you-go” basis. The ratio was 3.3 in 2005 but has slipped to 2.8 in 2021 and is forecasted to be just 2.1 workers per beneficiary by the year 2040 (source: Social Security).

YOU TOO? – Inflation in the Eurozone, i.e., the 19 countries that use the Euro as their common currency, is forecasted to be +7.6% in 2022, up from a spring 2022 prediction of +6.1% (source: European Commission).

CHINA – The 2 worst quarters for China’s economy in the last 30 years have occurred since the pandemic began: a decline of 6.8% in the 1Q 2020 and a gain of +0.4% in the 2Q 2022 (source: Nat’l Bureau of Statistics).

TOP SPOT – China and India are 1-2 in terms of population today, a ranking that is projected to flip-flop next year (2023) when India becomes the world’s most populous nation with nearly 1.5 billion people (source: UN).

MORE IN THAN OUT – The USA’s $845 billion trade deficit in 2021, i.e., $3.40 trillion of imports in excess of $2.56 trillion of exports, was our country’s 46th consecutive year of trade deficits (1976-2021). Between 1960 and 1970, the US ran a trade surplus every year (source: Department of Commerce).

TIME TO BUY MAY BE NOW – Of the 10 major US cities where the housing market is “cooling off” the quickest, 6 cities are in California. The San Jose market tops this analysis based on price drops and the length of time that a listing is staying on the market. Sacramento and Oakland are ranked # 2 and # 3 (source: Redfin).

PAY YOUR MORTGAGE – Lenders repossessed 20,750 properties during the first 6 months of 2022, up +113% from 9,739 repossessions in the first half of 2021. Just 5 years ago (2017), 169,124 properties were repossessed in the first half of the year (source: ATTOM Data Solutions).

SON OF MATT – Jackson Holliday, the # 1 pick in the MLB Draft on 7/17/2022, is the son of former big leaguer Matt Holliday. Matt played 15 years for 4 teams, earning $159.9 million in salary (source: Baseball Reference).