Bill’s By The Number$

Posted by: Kim Vo | Posted on: August 22nd, 2016 | 0 Comments

1. RANGE – The highest closing value YTD (2190 on 8/15/16) for the S&P 500 index is +19.7% higher than the lowest closing value YTD (1829 from 2/11/16) for the index. In the last 50 calendar years (1966-2015), the “high close” has been on average +27.9% greater than the “low close” during the course of the year. The smallest gap between the “high close” and the “low close” in the last 50 years was +9.8% in 1993. 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. AT THE BACK END – The highest closing value during the year for the S&P 500 stock index has occurred in the final 4 months of the year (i.e., September-October-November-December) in 10 of the last 13 calendar years (source: BTN Research).

3. BULL STATS – The ongoing bull market for the S&P 500 (now in its 90th month) has achieved 118 all-time closing highs, the most recent occurring last Monday 8/15/16 (source: BTN Research).

4. THE RISK – The average interest rate paid by the government on its interest bearing debt was 2.259% as of 7/31/16. The average interest rate paid by the government on its interest bearing debt was 4.382% as of 7/31/08 (8 years earlier) or 2% greater than today. Every 1% increase in the cost of debt on our nation’s $14 trillion of publicly held debt is equal to $140 billion per year in additional interest expense (source: Treasury Department).

5. FIRST TRILLION, LAST TRILLION – Our nation’s total outstanding debt as of 8/18/16 was $19.445 trillion. It has taken 293 calendar days (since 10/30/15) to add the latest $1 trillion of debt. It took our country 205 years (from 1776 to November, 1981) to accumulate our first $1 trillion of debt (source: Treasury Department).

6. THE TRUTH – In his July 1984 convention acceptance speech, Democratic nominee Walter Mondale said “Taxes will go up. It must be done.” Mondale lost 49 states in the 1984 election (source: BTN Research).

7. STRONGER REAL ESTATE MARKET – At the end of 2010, 8.2% of mortgages had at least 1-payment past due and another 4.6% of mortgages were in the foreclosure process. At the end of June 2016, 4.7% of mortgages were at least 1-payment past due and another 1.6% of mortgages were in the foreclosure process (source: Mortgage Bankers Association).

8. IMPACTED BY GLOBAL DEMAND – The field production of crude oil in the USA peaked at 9.61 million barrels a day in June 2015, but has fallen off by 1 million barrels since then to 8.60 million barrels a day as of Friday 8/12/16 (source: Department of Energy).

9. PRETTY SHORT-TERM – As of 9/30/16 (i.e., the end of fiscal year 2016), 66.5% of the outstanding debt of the US government will mature in 5 years or less (source: Treasury Department).

10. NOT AS FRUITFUL – Productivity of the average American worker has declined in each of the last 3 quarters through 6/30/16, the first time that has occurred since 12/31/79 (source: Labor Department).

11. GREEN ACRES – The average American “farm real estate value” is $3,010 an acre in 2016, including land and buildings, an increase of +4.5% per year over the last 4 years. The price of farmland averages $7,850 an acre in Iowa but just $1,880 an acre in Kansas (source: Department of Agriculture).

12. MORE AND MORE RENTERS – There were 118.3 million households in the United States as of 6/30/16, split 63/37 between “owners” (74.4 million households) and “renters” (43.9 million households). The “owner” number has been flat over the last 12 months. The “renter” number has increased by 1.0 million over the last 12 months (source: Census Bureau).

13. OVER TIME – 20 years ago (6/30/96), the split between “owners” and “renters” in the USA was 65/35. 10 years ago (6/30/06), the split between “owners” and “renters” was 69/31. Today (6/30/16), the split between “owners” and “renters” is 63/37 (source: Census Bureau).

14. PRICE CONTROL? – Health insurers participating in the New York health insurance exchange for 2017 submitted proposals that included average price increases of +19.3% over actual 2016 rates. The NY state insurance commissioner ultimately approved average rate hikes of +16.6% for 2017 (source: Wall Street Journal).

15. WAY AHEAD – American Olympic swimmer Katie Ledecky won gold in the 800-meter freestyle event on Friday 8/12/16, her 3rd individual gold medal and 4th gold overall (including a relay event) of the Rio Games. Ledecky has the 13 fastest times in the women’s 800-meter freestyle in history (source: BTN Research).

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