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Bill’s By The Number$

Posted by: Vanessa Guadiana | Posted on: July 18th, 2016 | 0 Comments

1. EVERY TEN YEARS – The S&P 500 was up +7.4% per year (total return) for the 10-years ending 6/30/16. A decade ago, the S&P 500 was up +8.3% per year (total return) for the 10-years ending 6/30/06. 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).

2. FINALLY ANOTHER RECORD – Before closing at an all-time high of 2137 on Monday 7/11/16, the S&P 500 had gone 285 trading days since its last record close of 2131 that was set on 5/21/15 (source: BTN Research).

3. BULL MARKET – Since bottoming on 3/09/09, the S&P 500 has gained +274% (total return) and set 112 record closing highs through trading on Friday 7/15/16 (source: BTN Research).

4. POST-BREXIT – In the first 2 trading days following the 6/23/16 “Brexit” vote in the UK, the S&P 500 dropped 5.3% (total return). Since then, the S&P 500 has gained +8.2% (total return) in the next 13 trading days through last Friday 7/15/16 (source: BTN Research).

5. PENSION PROBLEMS – The 5 separate New York City pension plans for the city’s civil workers, teachers, police and fire fighters have assumed a 7% annual rate of return (aka the discount rate) on pension assets since 2013. The discount rate is used to calculate the present value of pension liabilities and has historically been benchmarked to high-quality corporate bond yields. If NYC was to lower its discount rate from 7%, that action would produce a higher present value amount of liabilities and would force greater annual pension plan contributions by the city (source: New York State Financial Control Board).

6. IN AND OUT – After 9 months of fiscal year 2016 (i.e., the 9 months ending 6/30/16), Uncle Sam has collected $1 of tax receipts for every $1.16 of outlays, creating a deficit to date of $401 billion (source: Treasury Department).

7. MORE AND MORE OF THE PIE – Social Security and Medicare together accounted for 39% of Federal outlays during the first 9 months of fiscal year 2016, i.e., the 9 months ending 6/30/16. Social Security and Medicare together accounted for 33% of Federal outlays during fiscal year 2006, i.e., the 12 months ending 9/30/2006 (source: Treasury Department).

8. PAYING ON TIME – The percentage of home mortgages nationwide that are “current and performing” is 94.9% as of 3/31/16, i.e., no monthly payments are outstanding (source: Office of the Comptroller of the Currency).

9. BAND-AID APPROACH – The Disability Insurance (DI) Trust Fund had been projected to be depleted by the 4th quarter 2016 per a 7/22/15 Social Security Trustee report. This forced Congress to allocate more of the 12.4% combined payroll taxes collected from employers and employees for 3 years (2016-17-18). The additional funds (from 1.8 percentage points to 2.37 percentage points out of the 12.4 percentage points) has now pushed the DI Trust Fund’s exhaustion date to 2023 or 7 years out (source: Social Security Trustees).

10. DOWNGRADE – There are 8 countries in the world that have been downgraded in 2016 by each of the 3 major credit rating agencies (S&P’s, Moody’s and Fitch Ratings), including Saudi Arabia and Brazil (Financial Times).

11. THEY ARE TEN, WE ARE FIVE – The unemployment rate for the 19 nations that use the Euro as their common currency was 10.1% as of 5/31/16, the lowest level in the Eurozone since 7/31/11. The unemployment rate in the USA as of 6/30/16 was 4.9% (source: Bloomberg).

12. BIGGER AND BIGGER HOMES – The medium square footage of new single family homes built in the United States in 2015 was 2,467 square feet, an increase of 547 square feet over the last 20 years. That’s equivalent to a 23’ x 23’ addition to new homes today when compared to 1995 home construction (source: Joint Center for Housing Studies of Harvard University).

13. NO WONDER THEY BUY AMERICAN DEBT – 80% of the sovereign debt of Germany and Japan has negative yields today (source: Citigroup).

14. GOLD SHINES – The price of gold has increased +26% YTD, i.e., from $1,060.30 per ounce at the close on 12/31/15 to $1,337.58 per ounce at the close on Friday 7/15/16 (source: CME Group).

15. WE LOVE THE LONG BALL – The longest home run hit in a regular season game at PETCO Park (San Diego, CA) is 471 feet by Adrian Gonzalez on 4/26/09 off of pitcher Ross Ohlendorf. Miami Marlin Giancarlo Stanton hit 15 home runs of at least 480 feet in last week’s home run derby competition held at PETCO Park during the 2016 All-Star Game activities, including 3 homes runs of 497 feet each (source: Major League Baseball).

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