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Bill’s By The Number$

  1. A MAJORITY – 52% of US households have investments in US stocks, either through direct ownership of individual stocks or through pooled accounts such as mutual funds (source: Survey of Consumer Finances).
  1. PLAN FOR PRICE INCREASES – As of 8/31/20, the “consumer price index” is up +19% over the last 10 years, up +50% over the last 20 years, and up +98% over the last 30 years. The consumer price index (CPI) is a measure of inflation compiled by the US Bureau of Labor Studies (source: Department of Labor).
  1. THE BANK OWNS IT NOW – Lenders repossessed only 2,035 homes in August 2020. The all-time record for bank repossessions in a single month in US history: 102,134 in September 2010 (source: Attom Data Solutions).
  1. LARGEST EVER – Fiscal year 2020 ends in 9 days (on 9/30/20), completing the largest budget deficit in our nation’s history. Through 8/31/20, the government’s budget deficit had reached $3.007 trillion, more than double the previous red-ink record of $1.413 trillion from fiscal year 2009 (source: Office of Management and Budget).
  1. JUST FIVE YEARS – 55 of the last 60 fiscal years in our country (the 60 years from 1961-2020) have resulted in “outlays” exceeding “receipts.” The 5 surplus years were 1969, 1998, 1999, 2000 and 2001 (source: Office of Management and Budget).
  1. AS LONG AS RATES STAY LOW – The average interest rate that the US government pays on its interest-bearing debt as of 8/31/20 was 795%, down from 2.331% as of 12/31/15. That means our government can borrow 29.9% more money today than it borrowed 5 years ago and still have the same out-of-pocket interest expense cost (source: Treasury Department).
  1. BACK IN BUSINESS – US ports received ships carrying 2.06 million containers loaded with cargo during the month of August 2020. That’s the largest number ever recorded in a monthly survey compiled since 2002 (source: National Retail Federation Global Port Tracker).
  1. A NEW HIGH – After adjusting numerical data from the past for the impact of inflation, the median household income in 2019 ($68,703) is the highest ever recorded in the USA and is the 4th consecutive year (2016-2019) that produced an all-time inflation-adjusted record. Before 2016, the peak for median household income was $62,641 set in 1999 (source: Federal Reserve Bank of St. Louis).
  1. SHOULD WE GET A BITE TO EAT? – 12% of the “sit-down” restaurant chains, i.e., not “fast food,” that were in business before the COVID-19 pandemic hit the United States in February 2020, are now out of business and have closed for good (source: Black Box Intelligence).
  1. GOOD LUCK COLLECTING IT – Riders of New York City’s buses and subways are provided masks if they board the city’s public transportation system without facial covering. As of 9/10/20, if any rider refuses to wear a mask, he/she will be fined $50 (source: Metropolitan Transportation Authority).
  1. MOVING IN THE RIGHT DIRECTION – On 2/08/20, just 2 days after the first US death from the COVID-19 pandemic, 2.1 million out-of-work Americans were receiving unemployment benefits via state programs across the country. That total rose to 22.8 million by 5/09/20 but has fallen to 12.3 million as of 9/05/20 (source: Federal Reserve Bank of St. Louis).
  1. ON FIRE – Of the 10 largest wildfires in the last 10 years in the state of California, 5 of them are taking place right now. The biggest of the 5 is the August Complex fire, the largest in state history (source: Los Angeles Times).
  1. MORE THAN JUST WAGES – For every $1 spent for wages and salaries in the private sector as of June 2020, employers spend an additional 45 cents on benefits, including paid leave, insurance, retirement plans and legally required benefits. Average private sector compensation is $28.24 per hour while the cost of benefits averages an additional $12.75 per hour (source: Bureau of Labor Statistics).
  1. ANNUAL BUMP – 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. g., the COLA that will be applied to benefits paid in January 2021 will be based on the change of prices from the end of the 3rd quarter 2019 to the end of the 3rd quarter 2020.  The COLA increase was +1.6% last year (source: Social Security).
  1. MONDAY NIGHT TV – The first “Monday Night Football” game was played on 9/21/70 or 50 years ago today. The Cleveland Browns beat the New York Jets 31-21.  The TV broadcast team included Keith Jackson, Howard Cosell and Don Meredith.  Jackson was replaced a year later by Frank Gifford (source: Sports Illustrated).

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Copyright © 2020 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. ONE FOLLOWED THE OTHER – In the last 30 years, the best 12-month performance and the worst 12-month performance for the S&P 500 occurred over a single 24-month period. The worst 12-months (a total return loss of 43.3%) was the 1-year from 3/01/08 to 2/28/09 and the best 12-months (a total return gain of +53.6%) was the 1-year from 3/01/09 to 2/28/10.  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. THE DAY THE WORLD CHANGED – The World Health Organization (WHO) declared the COVID-19 outbreak a pandemic on 3/11/20. In the 6 months from 3/11/20 through last Friday 9/11/20, the S&P 500 has gained +23.0% (total return) (source: BTN Research).
  1. ALL THE STOCKS – The total stock market capitalization of US equities peaked at $36.1 trillion as of 2/19/20, fell to $23.4 trillion as of 3/23/20, and has bounced back to $35.6 trillion as of Friday 9/11/20 (source: Wilshire).
  1. BUT THE LARGEST IS OURS – 3 of the 4 largest companies in the world are Chinese corporations. The rankings are based upon annual revenues.  Each of the top 4 companies generate more than $1 billion a day in revenue (source: Fortune).
  1. USUALLY – The bond market was up +6.9% YTD (total return) through the close of trading on 9/10/20. If the bond market produces a positive total return for 2020, it would be 20 of the last 21 years that bonds have been up.  The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: Bloomberg).
  1. TREASURIES – The amount of outstanding Treasury debt issued by the United States has almost doubled in less than a decade, rising from $8.853 trillion on 12/31/10 to $17.154 trillion as of 3/31/20 (source: SIFMA).
  1. FROM A RECORD HIGH – The US has tracked domestic oil production since January 1920, i.e., for 100 years. Domestic oil production first exceeded 10 million barrels a day on 2/02/18, rising to a record 1 million barrels a day on 3/13/20, the day President Trump declared a national pandemic emergency.  Since then, domestic oil production as fallen steadily to 10.0 million barrels a day as of Friday 9/04/20 (source: Department of Energy).
  1. FEWER CHOICES TO PICK FROM – There were 400,000 fewer existing homes for sale nationwide at the end of July 2020 (1.5 million) than there were at the end of July 2019 (1.9 million), a drop of 21% on a year-over-year basis (source: National Association of Realtors).
  1. MOSTLY MORTGAGE DEBT – Total household debt in the United States was $14.27 trillion as of 6/30/20, down slightly from the all-time record of $14.30 trillion set as of 3/31/20. 69% of the $14.27 trillion household debt total ($9.78 trillion) is mortgage debt (source: Federal Reserve Bank of New York).
  1. NO INFLATIONInflation in the Eurozone fell 0.2% on a month-over-month basis in August 2020, i.e., deflation. The last month of deflation in the Eurozone before August occurred in May 2016.  The last calendar year in which the US experienced deflation was 1954 or 66 years ago (source: Eurostat, Bureau of Labor Statistics).
  1. READ ALL ABOUT IT – Jobs in the hardcopy publishing industry (i.e., newspapers, magazines, books, directories, mailing lists, calendars, greeting cards and maps) are projected to drop by 33% between 2019 and 2029, a forecasted loss of 99,200 jobs (source: Bureau of Labor Statistics).
  1. YOU WANT A DISCOUNT? – The schools with the 4 largest college endowments in the United States – Harvard, University of Texas, Yale and Stanford – increased the cost of tuition for their undergraduates for the 2020-21 school year (source: MarketWatch).
  1. WHO KNEW? – The CDC estimated on 7/10/20 that 40% of Americans infected with the COVID-19 virus are asymptomatic, i.e., they never experienced symptoms commonly associated with the virus, including fever, chills, cough, shortness of breath, fatigue and body aches (source: Center for Disease Control).
  1. SOME RELIEF – A maximum $2,500 of interest expense from student loans is deductible annually from taxable income. Please consult a tax expert for details (source: Internal Revenue Service).
  1. NOT THEIR YEAR – The last 2 World Series champs – the Boston Red Sox (2018) and the Washington Nationals (2019) – have the 3rd worst record (the Red Sox were 16-29) and the 6th worst record (the Nationals were 16-26) in MLB out of all 30 teams as of games played through Thursday 9/10/20 (source: MLB).

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Copyright © 2020 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. THROUGH AUGUST – The S&P 500 was up +9.7% YTD (total return) through 8/31/20. The S&P 500 has gained an average of +10.6% per year (total return) over the last 50 years (i.e., 1970-2019).  The stock index has been up during 40 of the last 50 years, i.e., 80% 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).
  1. COMPARING THE STARTS – Since hitting a bear market low on 3/23/20, the S&P 500 has gained +54.5% (total return) in 116 trading days through last Friday 9/04/20. By comparison, the recently ended 11-year bull market for the S&P 500 (lasting from 3/09/09 to 2/19/20) gained +53.3% (total return) during its first 116 trading days on its way to a +529% (total return) overall bull market gain (source: BTN Research).
  1. LUMP-SUM NEEDED – A present value (PV) amount of $195,929 is required to fund a $1,000 per month payment for 20 years with a +3% annual increase for maintenance of purchasing power if a +5% annual rate of return is maintained into the future. The PV amount is $269,006 if the required payment period is 30 years.  The calculations ignore the impact of taxes and are for illustrative purposes only and are not intended to reflect any specific investment alternative (source: BTN Research).
  1. CHEAP MONEY – The yield on the 10-year Treasury note closed at 695% on 8/31/20, down from 1.91% as of 12/31/19. The all-time low close for the 10-year note is 0.501% set on 3/09/20 (source: Treasury Department).
  1. THE MOST PAID – The maximum Social Security benefit paid to a worker retiring at full retirement age in 2020 is $3,011 per month, triple the $975 per month maximum benefit paid 30 years ago (source: Social Security).
  1. GOING FAST – 68% of the 597,000 existing home sales that took place in the United States in July 2020 were listings that were on the market less than 1 month (source: National Association of Realtors).
  1. THEY COUNT QUICKER – The USA released on 7/30/20 its “advanced estimate” on the change of our “Gross Domestic Product” (GDP) for the 2nd Q 2020, followed by a 2nd estimate on 8/27/20 and a final 3rd estimate on 9/30/20. By comparison, China’s target is to report its quarterly GDP results 15 days after the end of the quarter and to revise its quarterly data only following the end of the calendar year (source: Department of Commerce).
  1. TWO TRILLION – As of 3/31/20, the size of the US economy was estimated to be $21.54 trillion. As of 6/30/20, the size of the US economy has been estimated to be $19.49 trillion (source: Department of Commerce).
  1. WE’RE A LITTLE BUSY – Congress is required by federal law to pass 12 spending bills each year before the beginning of the government’s fiscal year that starts on October 1st. The spending bills determine the amount of money to be spent on the nation’s discretionary programs, i.e., not mandatory spending.  However the last year when this work was completed in time by October 1st was in 1997 or 23 years ago (source: Congress).
  1. WASHINGTON IMPASSE – Congress returns from its August recess this week. Negotiations on another stimulus bill  Currently, Democrats would support no less than a $2.2 trillion bill, while Republicans would support no more than a $1.3 trillion bill (source: Congress).
  1. TWICE AS MUCH IN HALF THE TIME – US banks set aside $114.7 billion in the first half of 2020 in loan loss provisions, i.e., an income statement expense that is established in anticipation of loan losses resulting from defaults, bankruptcies and renegotiated loans. US banks set aside $55.5 billion in loan loss provisions during all of calendar year 2019 (source: FDIC).
  1. JUST GOT MORE EXPENSIVE – A homeowner that refinances his/her mortgage after 9/01/20 may be subject to a new charge of ½ of 1% on the total loan value. As of 9/01/20, Fannie Mae and Freddie Mac, government sponsored enterprises that buy mortgages from the lenders that originate the debt, have added a 0.5% fee to refinanced loans they purchase.  Lenders are expected to pass the cost onto consumers (source: Fannie Mae).
  1. PANDEMIC IMPACTEmergency rooms visits nationwide during the month of April 2020 were down 42% when compared to emergency rooms visits from April 2019 (source: Center for Disease Control).
  1. MASSIVE LOSSESHurricane Katrina (2005) caused $75 billion of damages, more than 6 times the estimated $12 billion of damages caused by last month’s Hurricane Laura (source: CoreLogic).
  1. ARE WE PLAYING? – Of the 130 FBS college football teams (Football Bowl Subdivision), 76 are playing a fall 2020 schedule while 54 teams are not playing (source: NCAA).

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Copyright © 2020 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. OFF AND RUNNING AGAIN – From its 3/23/20 low closing value through the close of trading last Friday 8/28/20, the S&P 500 has gained +58.1% (total return) and set 7 all-time closing highs. 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. CONSECUTIVE BEARS – Over the last 75 years, the shortest time period between the end of one bear market and the beginning of another bear market is 2 years and 2 months. The S&P 500 fell 22% during a bear market that ended on 10/07/66.  The next bear market for the stock market, an 18-month long tumble of 36% began its downward slide on 11/29/68 (source: BTN Research).
  1. TOUGH YEAR FOR SOME STOCKS – 29% of the stocks in the S&P 500 are down at least 20% YTD through the close of stock trading on Friday 8/28/20 (source: BTN Research).
  1. WAR CHEST FOR THE FUTURE? – Investment grade companies in the United States borrowed $1.15 trillion in bond offerings during calendar year 2019, below the all-time record of $1.37 trillion set in 2017. That 2017 record will likely fall in 2020 as investment grade companies are projected to borrow $1.6 trillion during the current calendar year (source: Refinitiv, JPMorgan Chase).
  1. SHIFT THE RISK – If a bank loans out money to a business through the “Main Street Lending Program,” the Fed will purchase from the bank 95% of the loan amount in order to reduce the lender’s risk (source: Federal Reserve).
  1. RECORD SPENDING – The 4 months that have produced the greatest government “outlays” in US history have been the last 4 months – April 2020 through July 2020. “Outlays” in June 2020 were $1.1 trillion, more than double the pre-pandemic record of $440 billion set in May 2019 (source: Treasury Department).
  1. MONEY TO HELP – The “Economic Impact Payments” of $1,200 per adult and $500 per child (under the age of 17) that were part of the 3/27/20 CARES Act were the 3rd time the government has issued direct stimulus payments in the last 20 years. The previous payments were made in 2001 and 2008 (source: CARES Act).
  1. ALL THIS DURING A PANDEMIC – The median sales price of existing homes sold in the United States was $304,100 in July 2020, the first time in US history that the median sales price has exceeded $300,000. The $304,100 median price is also a record on an inflation-adjusted basis, besting the $230,200 median sales price from July 2006 (14 years ago), equal to $293,096 in 2020 dollars (source: Nat’l Association of Realtors).
  1. NEED MORE, NOT LESS – The suppliers of lumber cut their production in the 1st quarter 2020 as the pandemic was developing in anticipation of a slowing housing market. Instead, an increased demand for home building and renovation projects has pushed the price of lumber to an all-time record price of $858 per thousand board feet, up +111% from a price of $406 per thousand board feet at the end of 2019 (source: CME Group).
  1. RUNNING OUT OF TIME – Renters were protected from eviction by the 3/27/20 CARES Act through last Monday 8/24/20. An estimated 23 million Americans, i.e., 21% of the 110 million people who live in renter households, are financially strapped and are at risk of eviction by 9/30/20 (source: COVID-19 Eviction Defense Project).
  1. LOVE THE WATER VIEW – Just 8% of the counties in the United States (255 out of 3,142 counties nationwide) touch a coastline, i.e., they touch the Atlantic Ocean, the Gulf of Mexico, the Pacific Ocean, the Bering Sea or the Arctic Ocean. These coastline counties however are home to 29% of the US population or 96 million people out of our 330 million population (source: Census Bureau).
  1. TWO STATES, VERY DIFFERENT IMPACT – The jobless rate in California in February 2020 (pre-pandemic) was 9%, before soaring to 13.3% by July 2020. The jobless rate in Wyoming in February 2020 (pre-pandemic) was 3.7%, before rising to 7.1% by July 2020 (source: Bureau of Labor Statistics).
  1. SO THEY SAY – As of 8/28/20, the top 3 countries in the world for reported deaths from the COVID-19 pandemic are the USA, Brazil and Mexico. China claims to have suffered just 4,718 deaths, or less than 3% of the death total recorded by the United States (source: Center for Systems Science and Engineering at Johns Hopkins).
  1. WHAT A MESS – American consumers’ demand for paper towels is +25% higher today than it was before the COVID-19 pandemic hit the United States in February 2020 or 6 months ago (source: Procter & Gamble Co.).
  1. DEFEATED BY COVID – The AP college football preseason top 25 rankings include 9 teams that will likely not play a fall 2020 schedule, including # 2 ranked Ohio State and # 7 ranked Penn State (source: Associated Press).

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Copyright © 2020 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. A WILD WALL STREET RIDE – The S&P 500 was down 30.4% YTD (total return) as of 3/23/20, but 106 trading days later the index is up +6.5% YTD (total return) as of last Friday 8/21/20. 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 proportionate to its market value (source: S&P Dow Jones Indices).

2. JUST A SELECT FEW – The NASDAQ Composite is up +26.9% YTD (total return) through the close of trading last Friday 8/21/20. Just 5 stocks drive approximately 40% of the return of the cap-weighted index. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).

3. GETTING IT ALL BACK – There have been 6 bear markets in which the S&P 500 has suffered at least a 30% decline in the last 75 years (1945-2020), the latest being a 34% tumble ending 3/23/20. In each case, the stock market eventually recovered 100% of the loss sustained, i.e., it closed above the previous bull market high. The average time the S&P 500 took to recover back to a new record price after the first 5 bears was 43 months, compared to just a 5 month bounce back needed after the 3/23/20 bear market low (source: BTN Research).

4. BAD COMPANY – As of the summer 2019, there were just 4 “advanced economies” in the world with a government “debt-to-GDP” ratio higher than the United States – Japan, Greece, Italy and Portugal. “Advanced economies” are defined as developed, industrialized and mature economies (source: International Monetary Fund).

5. OUR NUMBER – As of 6/30/20, the US government’s “debt-to-GDP” ratio was 137%, i.e., $26.5 trillion of government debt divided by our $19.4 trillion economy (source: Treasury Department).

6. WHEN DEMAND DROPS – The world production of crude oil was 101 million barrels a day in 2019. The pandemic caused a global collapse in oil consumption, forcing the major oil players of OPEC and Russia to implement an output cut of 9.7 million barrels a day in April 2020. The drop in demand forced US oil producers to cut output by 2.4 million barrels a day since mid-March 2020 (source: US Energy Information Administration).

7. IT WILL TAKE TIME – Economists from the 2nd largest bank in the United States predict that the US economy will not recover to its pre-pandemic level until early 2023 (source: Bank of America).

8. FIND A NEW JOB – An estimated 33% of the pandemic-driven layoffs in the United States that occurred from March 2020 through May 2020 will be permanent, i.e., the workers will never return to their old jobs at their former employers (source: Brookings Papers on Economic Activity).

9. ONE HUNDRED – As of 9am ET on 8/21/20, 175,422 Americans had died from the COVID-19 virus. 100 days earlier as of 9am ET on 5/13/20, 83,557 Americans had died from the COVID-19 virus. Thus, 91,865 Americans have died in the last 100 days from the pandemic (source: NBC News, Meet the Press: First Read).

10. MOVING TO THE SUBURBS – The New York metropolitan area had a net loss of 6,786 households during the 2nd quarter 2020, while Los Angeles had a net loss of 6,347 households (source: RealPage).

11. PAYING LESS – Just 5% of US homeowners had implemented a forbearance plan with their lender as of the end of June 2020 allowing them to pause or reduce their monthly mortgage payments for a limited period of time, i.e., 4.2 million out of 86.0 million homeowners (source: Mortgage Bankers Association).

12. NO OTHER CHOICE – New Jersey Governor Phil Murphy signed into law on 7/16/20 an emergency bond act that authorizes the state to borrow $9.9 billion through 6/30/2021, money needed to offset the fiscal impact of the pandemic. The general obligations bonds, agreed to without voter approval, would take New Jersey’s outstanding bond debt from $44.4 billion to $54.3 billion (source: New Jersey Department of Treasury).

13. GATHERED EVERY MONTH – The calculation of our nation’s “consumer price index” is based upon pricing data collected each month from 22,000 retail stores (e.g., department stores, groceries stores, gas stations, and restaurants) across 75 urban areas nationwide (source: Bureau of Labor Statistics).

14. GO BIG RED – Famous stock investor Warren Buffett turns 90 years old next Sunday on 8/30/20. Buffett, a 1951 graduate of the University of Nebraska, is worth $69 billion. Buffett has accumulated 84% of his net worth since he turned 65 years old, i.e., in the last 25 years (source: Fortune).

15. BUCS AND BRADY? – Super Bowl # 55 is scheduled to be held on 2/07/21 in Tampa, FL, the 5th time the city of Tampa has hosted the championship game. No NFL team in history has ever played in the Super Bowl on their home field (source: NFL).

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Copyright © 2020 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. FROM THE MARCH LOW – Since bottoming on 3/23/20, the S&P 500 has rallied and gained +51.9% (total return) through the close of stock trading as of last Friday 8/14/20. 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. NOT A SURPRISE – The top 10% of American wage earners (making at least $145,135 annually in pre-tax income) own 88% of the US stock market (source: BCA Research).

3. MOSTLY UP – The bond market has produced a negative total return in just 3 of the last 44 years, i.e., 1976-2019. The down years were 1994, 1999 and 2013. The bond market was up +6.9% YTD (total return) through the close of trading on Thursday 8/13/20. The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: Bloomberg).

4. UNDER THE PILLOW – Since the beginning of 2020, the size of the money market fund industry in the USA (both taxable and tax-free) has grown from $3.6 trillion to $4.6 trillion as of Wednesday 8/12/20 (source: Investment Company Institute).

5. YOU DON’T HAVE TO – The 3/27/20 CARES Act allows (but does not require) American seniors to skip the “required minimum distribution” (RMD) taken from their retirement accounts in 2020. RMDs began the year in which you reached age 70 ½ if you hit 70 ½ in 2019 or earlier, or they begin in the year that you reach age 72. The change to age 72 as the starting point for distributions was included in the SECURE Act that was signed into law on 12/20/19. Please consult a tax professional for details (source: CARES Act).

6. NEED A LOT OF MONEY – The US government forecasted on Monday 8/03/20 that it will borrow $4.5 trillion during fiscal year 2020, i.e., the 12 months ending 9/30/20. That total exceeds the $3.8 trillion borrowed over the previous 4 fiscal years of 2016-2019 (source: Treasury Department).

7. THE WORLD’S BIGGEST – The size of the US economy was $19.4 trillion as of 6/30/20, down $2.3 trillion from $21.7 trillion recorded as of 12/31/19. 10 years ago (6/30/10), the size of the US economy was $14.9 trillion. 20 years ago (6/30/00), the size of the US economy was $10.2 trillion. 30 years ago (6/30/90), the size of the US economy was $6.0 trillion (source: Bureau of Economic Analysis).

8. THERE’S BAD, THEN THERE’S AWFUL – The US economy fell 10.0% in size between 3/31/20 and 6/30/20. The United Kingdom’s economy fell 20.4% in size between 3/31/20 and 6/30/20 (source: Office for National Statistics).

9. WILL THE PANDEMIC CHANGE THIS? – The US fertility rate, i.e., the number of children that are projected to be born to a woman in her lifetime, has declined in 10 of the last 11 years since 2007. The rate was 2.12 children in 2007, falling to 1.73 children in 2018, the latest year that the data has been calculated (source: World Bank).

10. CALM BEFORE THE STORM? – Banks repossessed 230,305 homes in calendar year 2018. Banks repossessed 143,955 homes in calendar year 2019. Through 7/31/20, banks had repossessed just 40,080 homes YTD (source: Attom Data Solutions).

11. ONLY HALF? – In order to approve a vaccine, the Food and Drug Administration requires that the vaccine must be at least 50% effective, i.e., the “yet to be approved” COVID-19 vaccine must prevent half the people who receive the vaccine from becoming infected with the COVID-19 virus (source: Food and Drug Administration).

12. SOME WILL, SOME WON’T – 49% of 1,056 American adults surveyed in mid-May 2020 plan on getting the COVID-19 vaccine as soon as it becomes available. 51% either will not get the vaccine immediately or are not sure what they will do (source: National Opinion Research Center at the University of Chicago).

13. MOST SUSCEPTIBLE – As of 8/08/20, 58% of American COVID-19 deaths occurred to individuals at least age 75, while just 1% of the victims were under the age of 35 (source: HealthData.gov).

14. NOWHERE TO GO – There are 57 cruise ships either sitting at or anchored near US coastal cities waiting for the Center for Disease Control to lift the suspension of their industry. Many of the ships remain anchored at sea in order to avoid “port fees” that can exceed $10,000 a day (source: US Coast Guard).

15. MATH MAJORS – The Big 10 Conference has 14 teams whereas the Big 12 Conference has 10 teams while the Pac-12 Conference has 12 teams (source: BTN Research).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
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Bill’s By The Number$

1. BIG STOCKS, GOOD PERFORMANCE – The 4 largest capitalized stocks in the S&P 500 index were up between +24% to +71% YTD through 7/31/20. The remaining stocks in the $28 trillion index were down an average of 10% YTD through 7/31/20. 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. COUNTING ALL OF THEM – After peaking at $36.1 trillion on 2/19/20, the total market capitalization of all US equities fell $12.7 trillion to $23.4 trillion as of 3/23/20 but has since added back $12.4 trillion to close last Friday 8/07/20 at $35.8 trillion (source: Wilshire).

3. RECORD LOW – The yield on the 10-year Treasury note closed at 0.514% last Tuesday 8/04/20, within 0.013 percentage points of its all-time record low close of 0.501% from 3/09/20 (source: Treasury Department).

4. REDUCING YOUR MONTHLY COST – 64% of mortgage applications filed during the week ending Friday 7/31/20 were current homeowners refinancing existing mortgage debt as opposed to new home purchases (source: Mortgage Bankers Association).

5. HOTELS AND RESTAURANTS – The number of American workers in “leisure and hospitality” was 16.9 million as of 2/29/20, dropped to 8.5 million as of 4/30/20, and now has rebounded to 12.5 million as of 7/31/20 (source: Department of Labor).

6. GET IT AND SPEND IT – 74% of Americans spent their $1,200 per person stimulus payment from the 3/27/20 CARES Act within 4 weeks of receipt. 159 million Americans received the one-time nontaxable cash payment (source: Money/Morning Consult survey).

7. MIGHT AS WELL STAY – Only 7% of workers “auto-enrolled” in an employer’s 401(k) plan elect to “opt-out” of the plan, i.e., 93% of all employees remain in the plan (source: Vanguard Research).

8. BEING CAUTIOUS – The personal savings rate in the United States was a record 33.5% in April 2020 as Americans reacted to the COVID-19 pandemic outbreak. The personal savings rate in the United States was 7.5% in April 2019 or just 1 year earlier. The personal savings rate is defined as “savings” (i.e., after-tax income less consumption spending) divided by after-tax income (source: Department of Commerce).

9. GET YOUR ACT TOGETHER – Fitch Ratings confirmed the AAA-rating of US debt securities on Friday 7/31/20, but reduced its “outlook” for US debt from “stable” to “negative.” Fitch indicated the “outlook” downgrade on US sovereign debt was a function of the increase in our country’s national debt and projected fiscal deficits. It was 9-years ago last week (8/05/11) that the rating agency S&P downgraded the debt issued by the USA from its top credit rating (Aaa), a ranking that had been held for 70 years (source: Fitch Ratings).

10. DEATHS – The first American death from the COVID-19 pandemic occurred on 2/06/20. As of 9am ET on 8/06/20, i.e., 6 months later, 159,398 Americans had died from the pandemic. 55% of the American death total has occurred in the last 3 months, i.e., since 5/06/20 (source: NBC News, Meet the Press: First Read).

11. HIGH DENSITY CITIES – As of Monday 8/03/20, only 30 counties in the US (or just under 1% of the 3,142 counties nationwide) that make up 17% of our 330 million population have accounted for 46% of all COVID-19 deaths in the country (source: USAFacts.org).

12. SCARY NOTION – Dr. Michael Osterholm, an infectious disease expert at the University of Minnesota, predicted on Sunday 5/10/20, i.e., 3 months ago today, that “we’re going to see 60 to 70% of Americans ultimately infected with this virus” (source: NBC News “Meet the Press” show).

13. VIRUS COST – California is considering implementing an income tax surcharge effective in 2020 that would levy an extra tax of 1% to as much as 3.5% on incomes in excess of $1 million. The extra revenue would offset the state’s additional expenses incurred in response to the COVID-19 pandemic (source: Calif. Assembly Bill 1243).

14. TOUGH YEAR – The number of operating oil rigs in the USA (both on land and offshore) as of last Friday 8/07/20 was 247, down 69% from 805 operating oil rigs as of 12/31/19 (source: Baker Hughes).

15. FRIDAY NIGHTS – As of 8/04/20, 28 states have delayed the start of the 2020 high school football season, including 10 states that will begin play in the spring of 2021. However, 4 of the 6 classes of athletic teams in Texas will begin their regular season on 8/27/20 (source: High School Football America).

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Copyright © 2020 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. STOCK PERFORMANCE – Even though 35% of the stocks in the S&P 500 are down at least 20% YTD through last Friday 7/31/20, the cap-weighted index is up +2.4% YTD. 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. BONDS – The taxable bond market is up +7.7% YTD (total return) through 7/30/20. The last time the bond market had a calendar year performance better than +7.7% was in 2011 or 9 years ago when bonds gained +7.8%. The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).

3. SPENDING SPREE – Since cutting short-term interest rates to near zero on 3/15/20, the Fed has purchased $1.7 trillion of Treasuries through Wednesday 7/29/20. The Fed now owns $4.3 trillion of US government debt or 25% of the total Treasury securities outstanding (source: Treasury Department).

4. UNCLE SAM BORROWS – There was $17.2 trillion of treasury securities outstanding as of 3/31/20. There was just $3.0 trillion of treasury securities outstanding as of 12/31/00 (source: SIFMA).

5. WHATEVER IT TAKES – The 11 emergency lending facilities opened by the Fed over a 2-month period beginning on 3/17/20 were to be in place through 9/30/20. On 7/28/20, the Fed announced that all 11 facilities would remain open through 12/31/20 (source: Federal Reserve).

6. IT’S FOR YOUR OWN GOOD – Effective 7/14/20, Colorado became the 9th US state to offer a pre-tax retirement plan to private sector workers who do not have access to an employer-sponsored plan. Colorado companies lacking a retirement plan are now required to “auto-enroll” its employees in the state-run retirement plan, but workers may “opt-out.” An estimated 40% of Colorado’s workers are employed by companies with no retirement plan (source: National Conference on Public Employee Retirement Systems).

7. THEY WILL HAVE TO CUT BACK – An estimated 55% of working-age households today are not saving enough money before retirement to allow them to maintain their current standard of living into their retirement years (source: Center for Retirement Research).

8. RECORD DROP – The US economy fell a record 32.9% in the 2nd quarter 2020, i.e., quarter-over-quarter change expressed as an annualized result. In reality, the economy as of 6/30/20 is just 9.5% smaller than the size of the economy as of 3/31/20 after removing the impact of inflation. A 9.5% drop occurring for 4 consecutive quarters, i.e., (1.0-0.095) ^ 4 = 0.671, equals a 32.9% annualized tumble (source: Department of Commerce).

9. HOW BAD? – Under a “worst-case” scenario, the United States could lose at much as $19.9 trillion of “potential growth” in its economy over the next 5 years if the COVID-19 pandemic causes a prolonged depression (source: Centre for Risk Studies at the University of Cambridge).

10. FIVE MONTHS TO GO – Our national debt has increased $3.3 trillion YTD through Thursday 7/30/20 to reach $26.5 trillion. Before this year, the largest calendar year addition to the national debt was the $1.7 trillion debt increase that occurred during calendar year 2010 (source: Treasury Department).

11. DEATHS – As of 9am ET on Friday 7/31/20, 8,138 Americans had died from the pandemic over the trailing week. That’s largest Friday-to-Friday death total since 5/22/20 (source: NBC News, Meet the Press: First Read).

12. PLEASE VOTE – The 2020 presidential election will take place on 11/03/20 or 3 months from today. 138 million Americans voted in the 2016 presidential election, equal to 58.1% of the nation’s voting-eligible population, i.e., 100 million voting-eligible Americans did not vote in the 2016 race (source: United States Elections Project).

13. HELP! – As of the 2nd quarter 2020, there were 40.8 million US households that were renters, representing 32% of 126.8 million US households. A July 2020 survey estimates that 23.6 million of the 40.8 million renters (58%) fear they have “no to slight” chance of being able to pay their rent in August (source: Census Bureau).

14. IT’S A WORRY – 68% of 842 small business owners surveyed in May 2020 are “very” or “moderately” concerned about their increased exposure to getting sued as they reopen their businesses (source: National Federation of Independent Business Research Center).

15. OUT OF THE GAME – Major league baseball player Daniel Bard was the winning pitcher in the Colorado Rockies’ 7/25/20 game, his first MLB win since 5/29/12, a 2,979-day gap between wins (source: MLB).

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Copyright © 2020 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. TIME IN THE STOCK MARKET – If you selected any single month at random to invest in the S&P 500 during the 25-years ending 6/30/20, you achieved a positive total return 66% of the time. If you extend your investment time horizon to just 1 year, you achieved a positive total return 80% of the time. If your time horizon was 5 years, you also achieved a positive total return 80% 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).

2. BEFORE ELECTION DAY – The S&P 500 has lost 1.1% on average (total return) over the 3 months leading up to the last 8 presidential elections, i.e., the 3 months of August-September-October over the 8 election years from 1988 through 2016. The stock index was up in 5 of the 8 election years from August-to-October but has been down in 2 of the last 3 election years over the 3-month period (source: BTN Research).

3. NEVER BEEN HIGHER – The NASDAQ Composite closed at an all-time high of 10,767 on Monday 7/20/20, its 12th record close since a national emergency was declared in the United States on 3/13/20. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).

4. T-NOTE – The yield on the 10-year Treasury note last closed above 2% on 7/31/19, i.e., a year ago. Every day since 7/31/19, the yield on the 10-year Treasury note has been below 2% and it has been below 1% each day since 3/19/20. From 1946 to 9/06/11, the yield on the 10-year Treasury note did not close below 2%. 10-year Treasury notes have been traded in the USA since 1790, i.e., 230 years of trading (source: Treasury Department).

5. CHEAP MONEY – The national average interest rate for a 30-year fixed rate mortgage as of 7/16/20 was 2.98%, an all-time record low, producing a $421 monthly “principal and interest” payment per $100,000 borrowed. The national average rate rose slightly to 3.01% on 7/23/20 (source: Fannie Mae).

6. TAKE ADVANTAGE OF LOW RATES – $1.2 trillion of corporate bonds were issued by “investment grade” companies in the first half of 2020, a record volume in US history for top-rated firms during the January-to-June time period (source: Securities Industry and Financial Markets Association).

7. LOST THEIR HOME – Banks repossessed 527,906 single-family homes in the 1st half of 2010 during the global mortgage crisis that began in late 2008. A decade later, banks repossessed just 37,917 single-family homes during the 1st half of 2020 at the beginning of the COVID-19 pandemic (source: Attom Data Solutions).

8. SELLERS’ MARKET – There were 350,000 fewer existing single-family homes for sale in June 2020 vs. June 2019, i.e., 1.57 million for sale this year vs. 1.92 million for sale last year (source: Nat’l Association of Realtors).

9. JUST IN CASE – The 5 largest banks in the USA announced in mid-July 2020 their plans to set aside $35 billion to prepare for what could be a wave of future defaults – mortgages, credit cards, personal loans, auto loans and corporate bankruptcies. The banks estimate that $24 billion of the $35 billion of potential losses could occur over the next 12 months (source: CNN).

10. HOSPITALS – Between 3/01/20 and 6/30/20, American hospitals lost $51 billion per month of revenue due to cancelled and foregone medical services (source: American Hospital Association).

11. IMMENSE IMPACT – The Mayo Clinic furloughed or cut the hours of 29,500 of its 70,000 employees (42%). Mayo estimates the pandemic will cause $3 billion in canceled surgeries for them in 2020 (source: Mayo Clinic).

12. GOOD USE OF MONEY – Every $1 the IRS spends on “examinations and collections” results in $3 of increased tax revenue (source: Congressional Budget Office).

13. DIFFERENT STATES – In both Florida and Texas, general sales tax revenue makes up at least 60% of their total tax revenue collected, the highest percentages in the nation. General sales tax revenue makes up just 12% of Vermont’s total tax revenue. Neither Florida nor Texas has a state income tax (source: Census Bureau).

14. BUMPY SKIES – The 3/27/20 CARES Act allocated $25 billion to 11 US airlines to be used for the payroll and benefits of the individual airline companies. The legislation prohibits the 11 airlines that received CARES Act money from implementing any layoffs until 10/01/20 (source: CARES Act).

15. THE BEST – Jon Rahm won the PGA’s Memorial Tournament on 7/19/20, moving him to # 1 in the World Golf Rankings. Rahm appeared in “Faces in the Crowd” in Sports Illustrated on 10/06/14 while he was in college. He was the world’s # 1 ranked amateur golfer for a record 60 weeks through 6/22/16 (source: BTN Research).

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Copyright © 2020 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. DURING A SLOWDOWN – The USA was in an 18-month recession from the end of December 2007 through the end of June 2009, a 1 ½ year period in which the S&P 500 gained +13.3% (total return). The USA is now in another recession, this latest downturn beginning at the end of February 2020. 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. YEAR-TO-DATE – The S&P 500 lost 30.43% (total return) for the first 56 trading days of 2020 through 3/23/20. Since then, the S&P 500 has gained +45.01% (total return) for the next 81 trading days through 7/17/20. The YTD result for the index is +0.88% (total return), i.e., (1 – 0.3043) x (1.4501) = 1.0088 (source: BTN Research).

3. LAST MONTH, LAST YEAR – The US government suffered an $864 billion budget deficit during June 2020, i.e., $241 billion of tax receipts vs. $1.1 trillion of outlays. The US government had a $984 billion budget deficit for the entire 2019 fiscal year, i.e., the 12 months ending 9/30/19 (source: Treasury Department).

4. SPENDING DECLINES AS WE AGE – The average retired couple spends 23% less money in their 6th year of retirement compared to what they spent in their 1st year of retirement (source: Health and Retirement Survey).

5. SEEMS CRAZY – If a bond investment was offered at a negative interest rate of 0.5%, that means investors (the lenders) would be willing to pay the issuer of the bond (the borrower) a rate of 0.5% per year for the duration of the bond for the privilege of lending the borrower money (source: BTN Research).

6. BLAME IT ON COVID-19 – Crude oil production in the United States has fallen from 13.1 million barrels a day as of Friday 3/13/20 (the day President Trump declared a pandemic-driven national emergency) to 11.0 million barrels a day as of Friday 7/10/20 (source: Department of Energy).

7. THIS FALL – 57% of colleges anticipate they will offer “in-person” class instruction for the upcoming 2020-21 school year, just 9% will offer only online class instruction, while 29% of schools will provide a combination of “in-person” and online class instruction. The remaining 5% of schools have yet to decide as of Friday 7/10/20 (source: Chronicle of Higher Education).

8. ROTTEN THINGS HAPPEN – 46% of 1,500 US adults interviewed online during the first week of July 2020 are “very worried” or “somewhat worried” about losing their job (source: Economist/YouGov Poll).

9. WHO HAS A JOB? – The number of employees of the federal government has increased by 18,000 from the end of February 2020 to the end of June 2020, while the number of employees of local governments has declined by 1.2 million over the same 4-month period (source: Department of Labor).

10. END OF THIS WEEK – The extra $600 per week of federally funded unemployment benefits that was provided in the 3/27/20 CARES Act runs out as of Saturday 7/25/20 or Sunday 7/26/20, depending upon the state of residence of the out-of-work individual. State-funded jobless benefits continue for at least 30 weeks in 46 of the 50 US states (source: CARES Act).

11. IT CAN WAIT – An estimated 40% of American adults at least age 18 have delayed getting medical care over the previous month as of 7/15/20 due to the COVID-19 pandemic. American adults make up 249 million of our 330 million population (source: Census Bureau).

12. CAN’T TOUCH ME – As of 7/09/20, an estimated 25% of the 5.4 million renters in New York City have not made a monthly rental payment since March 2020. A 3/27/20 federal moratorium prevents NYC landlords from evicting delinquent tenants or charging them late fees (source: Community Housing Improvement Program).

13. STATES WILL NEED HELP – From 3/13/20 (the date of President Trump’s declaration of a national emergency) to 6/30/20, the COVID-19 pandemic reduced state revenue across the country (e.g., state income tax and sales tax) by an estimated $75 billion. For the 2021 fiscal year that began on 7/01/20 for most states, the 50 US states will experience an additional revenue reduction of an estimated $125 billion (source: Tax Policy Center).

14. WE NEED JUST ONE – There are 197 vaccines for the COVID-19 pandemic currently in the development stage, none of which has yet to receive FDA approval (source: Milken Institute).

15. BRAD PAISLEY’S BUDDY – Former NFL quarterback Peyton Manning earned $3.4 million from advertisements and royalties for the 1-year ending 2/29/20, more than what any current or former NFL player earned over the same time period. Manning last played on 2/07/16 in Super Bowl # 50 (source: NFL Players’ Association).

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Copyright © 2020 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.