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Bill’s By The Number$

  1. WHAT A DAY!12 years ago tomorrow (on Monday 10/13/08), the single-best trading day for the S&P 500 in the last 70 years (since 1950) took place – a gain of +11.6% in just 1 trading day. 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 value (source: BTN Research).
  1. PEAK – The highest close for the S&P 500 so far this year (3581) was on 9/02/20. The highest close for the index has occurred in September or December in 7 of the last 8 years, i.e., 2012-2019 (source: BTN Research).
  1. PREDICTING IS HARD – 3 years ago (9/20/17), the Federal Reserve released a forecast for the end of 2020 for its key short-term interest rate and for our country’s unemployment rate. Their predictions: The Fed funds rate would be 2.9% and our jobless rate would be 4.2%.  The actual numbers as of today: The Fed funds rate is 0% to 0.25% and our jobless rate is 7.9% (source: Federal Reserve).
  1. CAN’T SPEND WHAT WE DON’T HAVE – “Personal income” in the United States, i.e., all pre-tax income created from employment and investments, declined 2.7% on a month-over-month basis from July 2020 to August 2020, its 4th down month in the last 6 months. “Personal income” had declined on a month-over-month basis only 5 times in the previous decade, i.e., 5 times in the previous 120 months (source: Department of Commerce).
  1. CUTOFFS FOR AGI – For tax year 2017, the latest tax year that the IRS has released data, 143,295,160 tax returns were filed. 98% of the 143.3 million returns reported adjusted gross income less than $339,478.  99% of the 143.3 million returns reported adjusted gross income less than $515,371 (source: Internal Revenue Service).
  1. HEALTH INSURANCE – For workers that access their health insurance through an employer, the average annual cost for health insurance coverage for a family plan in 2020 is $20,514, with the employer paying 67% of the total ($13,717) and the employee paying 33% ($6,797) (source: US Bureau of Labor Statistics).
  1. WANT TO LIVE FOREVER?Healthcare spending per person in the USA in 2018 was +92% greater than the average health care spending per person in 9 major countries. US spending of $10,637 per person, including hospital care, prescription drugs, long-term care and preventative care, nearly doubled the $5,527 per person spending average compiled from Austria, Belgium, Canada, France, Germany, the Netherlands, Sweden, Switzerland and the UK (source: OECD Health Statistics).
  1. LESS FROM CHINA – The US imported $452 billion of goods from China in 2019. Through the first half of 2020, the US had imported $181 billion of goods from China (source: Department of Commerce).
  1. PAY THE PIPER – The moratorium imposed by the state of New York on commercial foreclosures and evictions ends in 8 days on Tuesday 10/20/20. Tenants and borrowers may face financial obligations that may have been accumulating since March 2020 (source: Thomas P. DiNapoli, New York State Comptroller).
  1. NO INFLATIONInflation in the Eurozone fell 0.3% on a month-over-month basis in September 2020, after falling 2% in August 2020, i.e., deflation has taken place in the last 2 months. The Eurozone, which began in 1999, has never had an entire calendar year that experienced deflation.  The last calendar year in which the US recorded deflation was 1954 (source: Eurostat, Bureau of Labor Statistics).
  1. CASHING IN – The median sales price of an existing home sold in the United States in August 2020 ($310,600) is the highest ever recorded and is up +11% in the last 12 months (source: National Association of Realtors).
  1. INCLUDE A GREAT BIG HOME OFFICE – 273,100 single family homes began construction nationwide in the last 3 months (June-July-August), the largest trailing 3-month total since August 2007 (source: Census Bureau).
  1. I’M LEAVING ON A (PRIVATE) JET PLANE – The California Legislature is debating a bill introduced on 7/27/20 that would retroactively (to January 2020) raise the state’s top marginal tax rate from 13.3% up to 14.3% at taxable income levels above $1 million, up to 16.3% on taxable income above $2 million and up to 16.8% on taxable income above $5 million. The tax increase would impact the estimated ½ of 1% of California taxpayers who currently pay 40% of the income tax revenue collected within the state (source: Assembly Bill 1253).
  1. FAMILY MONEY – Jeff Bezos is ranked # 1 as the richest person in the world (worth $188 billion as of 10/08/20), but the 7 living heirs of Sam Walton (he died in 1992) are worth $239 billion (source: Forbes).
  1. THEY GOT HOT – The Louis Cardinals beat the Detroit Tigers in the 2006 World Series but had the worst regular season record (83-78) for a World Series champion in baseball’s 145-year history (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. STOCKS AND THE WHITE HOUSE – Based upon performance data from 1936-2019, the S&P 500 has averaged +6.7% per year (total return) during the 1st year of a 4-year presidential term, +8.7% per year during the 2nd year, +18.5% per year during the 3rd year, and +9.4% per year during the 4th year. Next year (2021) will be year # 1 of a 2nd-term Trump administration or year # 1 of a 1st-term Biden administration.  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. BIG NUMBERS – The NASDAQ Composite is up +25.3% YTD (total return) through the close of trading on 9/30/20. The NASDAQ Composite has gained at least +20% in 4 of the last 11 years, i.e., 2009-2019.  The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).
  1. REALLY GOOD AND REALLY BAD – As of the close of stock trading on Wednesday 9/30/20, 13 individual stocks within the S&P 500 were up at least +50% YTD while 34 individual stocks were down at least 50% YTD. The return measurement was based upon the change of the individual stock price over a 9-month period and does not include any reinvestment of dividends (source: BTN Research).
  1. GLOOMY – 51% of 1,154 Americans surveyed in early September 2020 fear that the US stock market will decline at least 20% over the upcoming 6 months (source: SimplyWise Retirement Confidence Index).
  1. BONDS – The taxable bond market was up +6.8% YTD (total return) through 9/30/20. The bond market has averaged a gain of +7.5% per year (total return) over the last 40 years, i.e., 1980-2019.  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).
  1. BEING CAREFUL – Since the beginning of 2020, the size of the money market fund industry in the USA (both taxable and tax-free) has grown from $3.63 trillion as of 1/01/20 to $4.40 trillion as 9/30/20, a YTD increase of $770 billion or $20 billion a week (source: Investment Company Institute).
  1. MAYBE NEVER – 31% of 1,018 American workers surveyed in January 2020 anticipate that they will retire at age 70 or later (source: Employee Benefit Research Institute – 2020 Retirement Confidence Survey).
  1. SIMPLER – As a result of the expansion in the size of the standard deduction that was part of the “2017 Tax Cuts and Jobs Act,” only 10% of tax filers itemized in 2018, down from 30% in 2017 (source: Tax Foundation).
  1. WHERE IT COMES FROM – Even though crude oil is produced in 32 US states, just 2 states (North Dakota and Texas) are responsible for 52% of the nation’s crude oil production (source: Energy Information Administration).
  1. BETTER THAN EXPECTED – There are an estimated 7 million college students (both undergraduates and graduate students) attending college for the school year that began in the fall of 2020. Unexpectedly, that total is down just 2% from the prior school year (source: National Center for Education Statistics).
  1. WHAT STATE IS NEXT? – The highest marginal tax rate for state income taxes in New Jersey in 2019 was 75%, effective at taxable income levels above $5 million. On 9/24/20, state legislators lowered the threshold when the top rate of 10.75% comes into play to taxable incomes in excess of $1 million.  The change is expected to raise an additional $390 million per year in state tax revenue for New Jersey (source: New Jersey Legislature).
  1. ALL IN THE FAMILY – One political party has controlled the White House, the Senate and the House of Representatives in 22 of the last 60 years, i.e., 1961-2020. Republicans last controlled the White House, the Senate and the House in 2018.  Democrats last controlled all 3 in 2010 (source: BTN Research).
  1. DEATHS BY COUNTY – 50% of US counties (1,562 out of 3,142) have experienced 6 or fewer COVID-19 related deaths as of Wednesday 9/23/20. 27% of US counties (839 out of 3,142) have had zero or just 1 COVID-19 death as of Wednesday 9/23/20 (source: USAFacts).
  1. A BIG PERCENTAGE EVEN BEFORE – The pandemic pushed the percentage of adults age 18-29 living with a parent to 52% as of the end of July 2020. Surprisingly, the percentage of adults age 18-29 living with a parent as of the end of January 2020, i.e., before the 1st US COVID-19 death, was 46% (source: Pew Research Center).
  1. HE CAN HIT – New York Yankee DJ LeMahieu won the AL batting title this season, hitting .364. He also won the NL batting title in 2016 with a .348 batting average.  It has been 118 years since anyone has won a batting title in both leagues.  Ed Delahanty was the top hitter in 1899 in the NL and in 1902 in the AL (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. FINAL QUARTER – Over the last 30 years (1990-2019), the S&P 500 stock index has gained an average of +4.7% (total return) over the final 3 months of the year (October-November-December). 24 of the last 30 fourth quarters (80%) have produced a positive total return gain.  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. COULD HAVE BEEN WORSE – The 9.1% drop in the size of the US economy between the 2nd quarter of 2019 and the 2nd quarter of 2020 was a smaller decrease than the decline that took place in India (down 25.2%), the UK (down 20.4%), Mexico (down 17.1%), France (down 13.8%), Italy (down 12.8%) and Canada (down 11.5%) (source: Organization for Economic Cooperation and Development).
  1. BANKS21 banks have failed in the last 5 years (through 9/25/20), requiring a financial bailout from the Federal Deposit Insurance Corporation, about 4 failures per year. By comparison, 127 banks had failed YTD through this point in calendar year 2010, i.e., YTD through 9/25/10, about 3 failures per week (source: FDIC).
  1. ARE THEY READY? – Stress tests conducted on 34 major US banks project that the pandemic could result in as much as $700 billion of bank losses. The forecast, released on 6/25/20, stated that US banks “can remain strong in the face of even the harshest shocks” (source: Federal Reserve).
  1. LOTS OF PEOPLE – 22% of Americans (74 million people) are on Medicaid, the nation’s health care program for low-income Americans that is jointly funded by the federal government and all 50 states (source: Medicaid).
  1. BIG DEBT – Our national debt has grown from $22.623 trillion on 9/24/19 to $26.786 trillion on 9/24/20, an increase of $4.163 trillion. That’s equivalent to adding $11.4 billion of new debt per day, or $475 million per hour, or $7.9 million per minute, or $132,000 per second over the past year (source: Treasury Department).
  1. DEBT LIMIT – Legislation signed by President Donald Trump in July 2019 suspended our country’s debt ceiling limit until 7/31/21, i.e., there is no statutory limit on our nation’s borrowing for the next 10 months. The debt ceiling has been raised, temporarily extended or suspended 87 times since 1960 (source: Treasury Department).
  1. 14-YEAR HIGH – New residential construction in the US totaled 139,100 housing units in July 2020, its highest monthly total recorded since September 2006. The total includes 93,100 single family homes, 700 apartment buildings with 2-4 units and 45,300 apartment buildings with 5 or more units (source: Census Bureau).
  1. LARGER LOAN – On 1/02/20, the national average interest rate for a 30-year fixed rate mortgage was 3.72%, producing a $461 monthly “principal and interest” payment per $100,000 borrowed. The same $461 payment at last week’s 2.90% national average would allow a home buyer to borrow $110,855 (source: Fannie Mae).
  1. JOBS IMPACT – Before the COVID-19 pandemic hit the United States, the number of out-of-work Americans as of 2/29/20 was 5.79 million. As of 8/31/20, the number of out-of-work Americans was 13.55 million.  Thus in the last 6 months, the pandemic is in part behind 7.76 million people losing their jobs (source: Department of Labor).
  1. VOTING – The 2020 elections in the US take place 36 days from today. On 11/03/20, Americans will vote for a President, all 435 members of the House and 33 members (out of 100) of the Senate (source: Congress).
  1. HOPE THEY ARE RIGHT – 159 of 224 global money managers surveyed (71%) in September 2020 anticipate that a “credible vaccine” for the COVID-19 pandemic will be found by 1/30/21 or within 4 months. The 224 managers oversee $600 billion of assets (source: Bank of America’s Global Fund Manager Survey).
  1. DEATHS – The White House announced on 3/31/20 (6 months ago) that the death toll from the pandemic could be 100,000 to as high as 240,000. As of Friday 9/25/20, the death count was 204,057 (source: Johns Hopkins).
  1. WHEN IS YOUR BIRTHDAY? – With 57 people in a room, there is a 99% chance that 2 people in the group have the same birthday. With 32 people in a room, there is a 75% chance that 2 people in the group have the same birthday.  With just 23 people in a room, there is a 51% chance that 2 people in the group have the same birthday (source: BTN Research).
  1. GOLF ON TV – Fox Sports bought the rights for $1.1 billion (or $93 million per year) to telecast the US Open golf major for the 12 years from 2015-26. When the pandemic pushed the US Open from mid-June to mid-September this year, Fox was faced with scheduling conflicts due to its existing college and pro football TV schedule.  The solution: NBC Sports bought the broadcasting rights for the 7 years from 2020-26 (source: NBC).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2020 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

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).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
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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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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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).

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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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