Bill’s By The Number$

Posted by: Kim Vo | Posted on: November 21st, 2016 | 0 Comments

1. LATE IN THE YEAR – The S&P 500 index has closed at its calendar year high during the month of December in 17 of the last 31 years, i.e., 1985-2015. The index’s high close (so far) during 2016 (2190.15) was achieved on Thursday 8/15/16. 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. FOUR – 2016 is the 4th year of Barack Obama’s 2nd 4-year presidential term. The S&P 500 has been positive on a total return basis during 17 of the last 20 “presidential 4th years.” The S&P 500 is up +8.9% YTD (total return) through the close of trading on Friday 11/18/16 (source: BTN Research).

3. ELECTION RESULTS – Hillary Clinton (D) won the popular vote in the 2016 presidential election by 1.11 million votes over Donald Trump (R). Secretary Clinton won the state of California by 3.23 million votes and President elect Trump won by 2.12 million votes in all states but California (source: Washington Examiner).

4. ONE HUNDRED VOTE SWING – The 6 states that President Obama won in the 2012 presidential election but Hillary Clinton lost in the 2016 race were Florida, Pennsylvania, Ohio, Michigan, Wisconsin and Iowa (worth 99 Electoral College votes). Clinton also lost the 2nd congressional district in Maine (1 Electoral College vote), a district that President Obama carried in 2012. Maine splits its 4 votes by district (source: BTN Research).

5. LESS THAN HALF THE AVERAGE – The average 30-year fixed rate mortgage over the last 45 years is 8.26%. The average 30-year fixed rate mortgage as of 11/17/16 was 3.94% (source: Freddie Mac).

6. WE TEACH THE WORLD – 59% of the 1,043,839 foreign students studying at American colleges during last year’s school year (2015-16) are natives of China, India, Saudi Arabia or South Korea. New York University (NYU) and the University of Southern California (USC) have the most foreign students in the United States (source: Institute of International Education).

7. WE SELL, THEY BUY – US exports of goods and services to China have increased tenfold since 1999, rising from $17 billion in 1999 to $165 billion in 2015 (source: Commerce Department).

8. WHAT ADVICE WOULD YOU GIVE? – A survey of 2,000 American adults found that their “best financial decision ever made” was “getting a college education” while their “worst financial decision ever made” was “not saving enough for retirement” (source: Claris Finance).

9. BORROW AND SPEND – President elect Donald Trump’s plan to invest in American infrastructure (e.g., highways, bridges and airports) has prompted global investors to price an increased US debt level and higher domestic inflation into bond prices. The yield on the 10-year Treasury note has increased from 1.83% on 11/07/16 (the day before the presidential election) to 2.36% on Friday 11/18/16 (source: Treasury Department).

10. DECAYING – The United States will need to spend $3.32 trillion over the next decade to fix our nation’s infrastructure, including $2.04 trillion in roads and bridges (source: American Society of Civil Engineers).

11. PENSION BACKSTOP – The Pension Benefit Guaranty Corporation (PBGC) was forced to take over an average of 10 failed pension plans per month over the last 14 fiscal years (2003-2016), a total of 1,685 pension plans over the entire 14 years. The PBGC protects defined benefit pension plans in the private (non-government) sector (source: Pension Benefit Guaranty Corporation).

12. STRONGER BANKING SYSTEM – Only 5 banks have failed in the United States YTD through 11/15/16, on pace to be the fewest number of bank failures in our country since 2007 when just 3 banks failed. Over the 7 years from 2008-14, 507 banks failed, an average of 72 per year (source: Federal Deposit Insurance Corporation).

13. STILL AT HOME – 32% of Millennials are living with a parent. “Millennials” are defined as the 75 million Americans ages 19-35 in 2016, i.e., individuals born from 1981-1997 (source: Pew Research Center).

14. IMPROVING TREND – American banks have repossessed 318,000 homes YTD through 10/31/16. Banks repossessed 450,000 homes in 2015 and 671,000 homes in 2012 (source: RealtyTrac).

15. COLLEGE FOOTBALL UPSETS – On Saturday 10/19/85, AP # 2 ranked Michigan lost to Iowa, # 3 ranked Oklahoma lost to Miami and # 4 ranked Arkansas lost to Texas. On Saturday 11/12/16, AP # 2 ranked Michigan lost to Iowa, # 3 ranked Clemson lost to Pitt and # 4 ranked Washington lost to USC. Jim Harbaugh was the Michigan QB in 1985 and the Michigan head coach in 2016 (source: CBS Sports).

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