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Bill’s By The Number$

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

  1. MISS A LITTLE, MISS A LOT – Over the last 30 years, i.e., 8/01/1992 to 7/31/2022, the S&P 500 gained +10.0% per year (total return). If you remove the best 22 trading days over the entire 3 decades, i.e., 22 trading days out of 7,554 trading days, the return for the S&P 500 drops in half to +5.0% per year (total return).  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).
  1. DO THE MATH – The S&P 500 is a cap-weighted index, i.e., the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation. As of the end of July 2022, the 42 largest stocks in the index carry the same weight as the other 462 stocks in the index.  Note there are 504 stocks in the S&P 500 today because 4 different stocks each have 2 share classes (source: S&P).
  1. DOWN BUT STILL UP – The cost of shipping a 40-foot container from China to the west coast of the USA has gone from $2,500 (June 2020) to $20,000 (September 2021) to $9,500 (June 2022) (source: Freightos).
  1. THE DOLLAR RULES40% of the world’s imports and exports are invoiced in US dollars (source: Patterns in Invoicing Currency in Global Trade).
  1. FINALLY SOME INFLATIONOver the decade from 7/01/2011 to 6/30/2021, US export prices (i.e., all commodities including agricultural products) rose just +4.6% (in total, not per year). Over the 1-year from 7/01/2021 to 6/30/2022, US export prices rose +18.2% (source: Bureau of Labor Statistics).
  1. THE VERY WEALTHY – On Thursday 7/28/2022, House members Steve Cohen (D-TN) and Don Beyer (D-VA) introduced the “Billionaire Minimum Income Tax Act.” The proposed legislation would impose a 20% annual tax on the “total income” of households worth at least $100 million.  “Total income” as defined by the bill includes unrealized capital gains.  Any taxes paid as a result of unrealized capital gains would serve as a credit against any future capital gains taxes owed when the asset is sold (source: Congress).
  1. REALLY BIG – The annual increase applied to Social Security retirement benefits as of 1/01/2023 is based on “Consumer Price Index” inflation over the 12 months ending 9/30/2022. Inflation over the 9 months from 10/01/2021 through 6/30/2022 has been reported and is +8.7%.  The Social Security “cost-of-living” adjustment has been at least +10% just twice in history: +14.3% in 1980 and +11.2% in 1981 (source: Department of Labor).
  1. SHORT OF MONEY – Social Security benefits are 96% funded by payroll taxes and 4% funded by income taxes paid on Social Security benefits. Payroll taxes have been 6.2% for employees and 6.2% for employers since 1990, i.e., no change for the last 32 years (source: Congressional Budget Office).
  1. WORSE OVER THERE – Consumer inflation in Turkey on a trailing 1-year basis as of 6/30/2022 was up +78.6% (source: Turkish Statistical Institute).
  1. LOWEST EVER – In June 2022, 8 states (Alabama, Georgia, Kentucky, Louisiana, Minnesota, Mississippi, Missouri and New Hampshire) each recorded their lowest state jobless rate in history (source: Bureau of Labor Statistics).
  1. WE’LL NEED MORE CHAIRS – When the Federal Open Market Committee (FOMC) unanimously voted 12-0 to raise short term interest rates by 0.75 percentage points on 7/27/2022, it was the first time in 9 years (7/31/2013) that the FOMC was fully staffed by 12 voting members (source: Federal Reserve).
  1. WILL POTUS MAKE IT SEVEN? – Since repayments of federal student loans were suspended for 6 months by the CARES Act on 3/27/2020, Presidents Trump and Biden have extended the initial end date 6 times (twice by Trump and 4 times by Biden), most recently just 4 months ago by President Biden on 4/06/2022. The suspension of repayments is effective through the end of this month, i.e., to 8/31/2022 (source: BTN Research).
  1. WHO NEEDS STATE INCOME TAXES? – Nevada took in more than $1 billion of gaming revenue each month during fiscal year 2022, i.e., July 2021 through June 2022, a total of $14.63 billion for the 2022 fiscal year (source: Nevada Gaming Commission).
  1. PLAN ON VOTING – The 2022 midterm elections are 3 months from today (11/08/2022). All 435 House seats and 34 of 100 Senate seats are up for reelection (source: Congress).
  1. GREAT VOICEVin Scully, the voice of the Los Angeles Dodgers for 67 years before retiring at the end of 2016 regular season at age 88, died on 8/02/2022 at age 94. Scully was in the broadcast booth for 21 no-hitters during his career, including 14 thrown by Dodger pitchers (source: Los Angeles Daily News).

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