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Bill’s By The Number$

  1. DOWN FOR THE YEAR – After 20 weeks of calendar year 2022, the S&P 500 is down 17.7% YTD (total return) through the close of trading last Friday 5/20/2022. 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. NEAR-BEAR SIGHTING – The S&P 500 closed at 3901 last Friday 5/20/2022, down 18.7% from its all-time closing high of 4797 set on 1/03/2022. The S&P 500 has closed at least 20% below a previous closing high 6 times in the last 50 years, i.e., since 1972.  The most recent “bear” was a 33-day tumble of 33.9% that bottomed on 3/23/2020 or 26 months ago in the early days of the pandemic (source: BTN Research).
  1. STOCKS AND RATE HIKES – Between 12/16/2015 and 12/19/2018, the Fed raised interest rates 9 times. Each rate hike was 0.25 percentage points, a total increase of 2.25 percentage points.  That took the Fed’s target short-term rate from 0% to 2.25%.  From the close of trading on 12/16/2015 to the close of trading on 12/19/2018, the S&P 500 gained +28.6% (total return) over the 3-years, or +8.7% per year (source: BTN Research).
  1. SIX MONTHS AGO – On 11/17/2021, 27% of investors were “bearish” on the prospects of the stock market for the upcoming 6 months. On 5/18/2022, 50% of investors were “bearish” on the prospects of the stock market for the upcoming 6 months.  Since closing at an all-time high on 11/19/2021, the NASDAQ Composite has fallen 29.0% (total return) through the close of trading last Friday 5/20/2022.  The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).
  1. BIG JUMP – The yield on the 10-year T-note has increased 1.29 percentage points from 12/31/2021 (1.50%) to Friday’s close 5/20/2022 (2.79%). The yield on the 10-year T-note has increased at least 1.29 percentage points over the course of 8 calendar years in the last 50 years, most recently in 2009 (source: Treasury Department).
  1. LOCKDOWN IMPACT ON SUPPLY CHAINS – 20% of China’s international trade is moved through its ports in Shanghai (source: Financial Times).
  1. NOT SO PRODUCTIVEProductivity of the US worker declined 7.5% in the 1Q 2022, i.e., quarter-over-quarter change expressed as an annualized result, the largest quarterly decline since the 3Q 1947. The tumble was blamed on continued supply chain problems and the rising cost of labor (source: Bureau of Labor Statistics).
  1. FOOD – 47% of the world’s production of sunflower oil, a commodity found in margarine and used in cooking, came from Ukraine before the Russian invasion in late February 2022 (source: Department of Agriculture).
  1. FLY AWAY – Airfares increased by +18.6% in April 2022 on a “month-over-month” basis and were up +33.3% on a “year-over-year” basis. The former represents the largest 1-month airfare inflation advance in US history and the latter is the highest annual airfare inflation increase reported since 1980 (source: Department of Labor).
  1. THAT’S INFLATION – Inflation, using the “Consumer Price Index” as the measurement, was up +9.0% in 1978, up +13.3% in 1979, up +12.5% in 1980, and up +8.9% in 1981 (source: Department of Labor).
  1. BOOM TIME – The median sales price of existing homes sold nationwide in April 2022 was $391,200, the highest level recorded in US history both on a nominal basis and on an inflation-adjusted basis. $391,200 is up +47% from the $266,300 median sales price in January 2020 (beginning of the pandemic) and up +125% from the $173,700 median sales price in April 2012, i.e., 10 years ago (source: National Association of Realtors).
  1. HOUSING SUPPLY – The “homeowner vacancy rate,” i.e., the proportion of the homeowner inventory that is vacant and available for sale, was 0.8% at the end of the 1st quarter 2022, the lowest percentage recorded for a statistic tracked for the last 66 years (source: Census Bureau).
  1. DOWN PAYMENT MONEY – The average down payment percentage for first-time US home buyers in 2021 was 9.2% (source: CoreLogic).
  1. WAGERING – The Supreme Court ruled on 5/14/2018 that commercial sports betting was legal in the US. Since then, Americans have bet $125 billion in the 32 states that have established sports betting (source: AP).
  1. NIL – Since July 2021, NCAA student athletes have been permitted to profit from their “name, image and likeness” (NIL). University of Miami booster John Ruiz legally offered transfer basketball player Nijel Pack a NIL deal worth $800,000 over 2-years, plus a car.  Ruiz was not allowed to communicate with Pack “for recruiting purposes” but was allowed to inform the recruit what he/she “might be able to earn at Miami” (source: CBS).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. FROM THE HIGH POINT – In the 91 trading days since closing at an all-time high on 1/03/2022, the S&P 500 has fallen 15.7% (total return) through last Friday 5/13/2022. 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. DO THE MATH – The S&P 500 is a cap-weighted index, i.e., the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation. As of the close of trading on Friday 5/13/2022, the 43 largest stocks in the index carries the same weight as the other 462 stocks in the index.  Note there are 505 stocks in the S&P 500 because 5 different stocks each have 2 share classes (source: S&P).
  1. STOCKS – From 12/31/2019 to 12/31/2021, the value of all US individual stocks increased by $19.5 trillion (+57%) to $53.4 trillion, before falling $5.1 trillion (10%) in the 1Q 2022 to $48.3 trillion (source: Siblis Research).
  1. THE INDEX TO FOLLOW – As of 3/31/2022, the S&P 500 index represented 83% ($40.3 trillion) of the market capitalization of the entire US stock market ($48.3 trillion) (source: S&P).
  1. HOW MUCH? – Fed Chairman Jerome Powell foreshadowed on 5/04/2022 the prospect of rate increases at each of the remaining 5 Fed meetings in 2022, including 0.50 percentage point increases at the next 2 meetings (scheduled for June and July). Powell’s comments equate to 2.5 percentage point increases in 2022, matching the 2.5 percentage point rate hikes implemented by the Fed in 1994 or 28 years ago (source: Federal Reserve).
  1. WHY THEY ACTED – The 1994 Fed rate hikes (6 rate hikes totaling 2.5 percentage points) were implemented because the Fed was concerned about a strengthening economy and an uptick in domestic inflation. Inflation (as measured by the Consumer Price Index) was only +2.7% in 1993, +2.7% in 1994 and +2.5% in 1995 (source: Commerce Department).
  1. WHAT TO DO? – 63% of 1,018 American adults surveyed in April 2022 are “very worried” or “moderately worried” about having enough money accumulated for retirement (source: Gallup).
  1. CHANGE IN DEBT – From 12/31/2019 (pre-pandemic) to 3/31/2022, mortgage debt in the US has increased +17% (to $11.18 trillion), auto loan debt has increased +10% to $1.47 trillion, credit card debt has declined 9% to $840 billion and student loan debt has increased +5% to $1.59 trillion (source: Federal Reserve Bank of NY).
  1. CAMPAIGN PROMISE – President Joe Biden is considering eliminating up to $10,000 of student loan debt per borrower, action that may be done through an executive order issued by him. This would cost US taxpayers an estimated $377 billion, wiping out 24% of the $1.59 trillion of total student loan debt and would eliminate completely the student loan debt held by approximately 33% of all borrowers (source: White House).
  1. RECORD HIGHTax receipts collected by the US in April 2022 were $863.6 billion, creating a monthly surplus of $308.2 billion, both numbers representing all-time monthly records for the US (source: Treasury Department).
  1. WAITING – The median age of American women giving birth was 30 in 2019 (the latest year that data has been released), the oldest age in US history and a number up from age 27 in 1990 (source: Census Bureau).
  1. YOU SNOOZE, YOU LOSE – A buyer of an average-priced existing US home ($266,300) in January 2020 (at the beginning of the global pandemic) who put 10% down would have a $1,078 monthly principal and interest payment on a 51% national average 30-year fixed rate mortgage. A buyer of an average-priced existing US home ($375,300) in March 2022 who put 10% down would have a $1,746 monthly principal and interest payment on a 4.67% national average 30-year fixed rate mortgage (source: Freddie Mac).
  1. CARPENTERS NEEDED3.78 million new single-family homes began construction in the US in the back-to-back months of December 2021 and January 2022, the highest number of new residential construction starts in back-to-back months since 3.90 million single-family homes were started in April and May 2006 (source: Census Bureau).
  1. THE PLACES TO BUY – The 3 most affordable housing markets in the United States today are Pittsburgh, Oklahoma City and Rochester, NY (source: Frontier Centre for Public Policy).
  1. HARD TO BELIEVE – In just his 6th race in his life, “Rich Strike” won the Kentucky Derby on 5/07/2022 as an 80-1 longshot. The 3-year old, purchased for just $30,000 in September 2021, paid $163.60 on a $2 bet to win.  “Rich Strike,” in 17th place out of 20 horses halfway through the race, collected a purse payout of $1.86 million for the win.  IRS Publication 505 discusses tax implications of gambling winnings (source: Sports Illustrated).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. STOCKS – The S&P 500 is down 13.1% YTD (total return) through 5/06/2022. The split between “up” and “down” trading days YTD is 44/56, compared to the 54/46 split achieved over the years 1950-2021.  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. CONTRARIANS – The S&P 500 was up +0.2% on a total return basis over the 1-year ending 4/30/2022. The last 7 times (taking place since 2010) that the index recorded a negative total return result over a trailing 12-month period, the index bounced back each time with a positive gain of at least +15% (total return) over the next 12 months.  The 1-year average return of all 7 comebacks is +27.6% (total return) (source: BTN Research).
  1. DECLINES HAPPEN – With its closing of 4123 on Friday 5/06/2022, the S&P 500 index is down 14.0% from an all-time closing high of 4797 set on 1/03/2022. The decline is the index’s 21st tumble of at least 10% (but less than 20%) in the last 50 years but is its 5th since 2015.  Declines of at least 10% but less than 20% from a previous closing high are called “corrections” (source: BTN Research).
  1. TOOK A BITE OUT OF IT – The largest capitalized stock in the United States was worth $2.57 trillion as of 4/30/2022 even though the stock fell in value 9.7% ($277 billion) in April 2022 (source: BTN Research).
  1. ROARING BEAR – The NASDAQ Composite is down 22.2% YTD (total return) through the close of trading last Friday 5/06/2022, and is down 24.1% (total return) from its all-time closing high set on 11/19/2021. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).
  1. UP AND UP – The yield on the 10-year Treasury note on 5/06/2020 (2-years ago) was 0.71%. The yield on the 10-year Treasury note on 5/06/2022 (last Friday) was 3.12% (source: Treasury Department).
  1. BOND MARKET – The taxable bond market has produced a positive total return gain in 42 of the last 46 years (1976-2021), i.e., 91% of the time, but is on track for its worst year in history, down 10.1% YTD through 5/5/2022. The Bloomberg US Aggregate Bond Index (created in 1986 with backdated history calculated to 1976), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1-year until final maturity, was used as the bond measurement (source: Bloomberg).
  1. FEWER FUTURE TAXPAYERS – The US had 7.27 million births in the back-to-back years 2020-2021, i.e., the pandemic years. That’s the fewest number of American births in back-to-back years in 40 years.  The US had 7.24 million births in 1980-1981.  30 years ago (1990-1991), the US had 8.27 million births in back-to-back years (source: National Vital Statistics System).
  1. BANKS – Through the first 4 months of 2022, no US bank had failed and required a financial bailout from the Federal Deposit Insurance Corporation (FDIC). There have been less than 10 banks that have failed in each of the last 7 calendar years, i.e., 2015-2021.  389 banks failed over the 3-year period 2009-2011 (source: FDIC).
  1. HOW WILL THEY RESPOND? – 75% of 3,001 Americans surveyed in February 2022 said that rising inflationhas impacted their finances” (source: Salary Finance Inc.).
  1. MOVE ACROSS THE LINECalifornia has the highest state marginal tax rate in the nation, with a 13.3% top rate kicking in at $1.25 million of taxable income (joint return) at the state level. Neighboring state Nevada has no federal income tax, 1 of 7 US states with no state income tax (source: Tax Foundation).
  1. VOTING BOOTH – The 2022 midterm elections are 6 months from yesterday (Tuesday 11/08/2022). Republicans lost 42 House seats in the 2018 midterms 2 years into Donald Trump’s presidential term, flipping a 241-194 Republican majority to a 235-199-1 Democratic majority (source: House of Representatives).
  1. A MAJORITY STILL WENT TO COLLEGE – 62.7% of 2020 high school graduates (after the pandemic started) enrolled in college in the fall of 2020. 61.8% of 2021 high school graduates enrolled in college in the fall of 2021 (source: Bureau of Labor Statistics).
  1. IT’S TOO MUCH – 32% of currently enrolled college students have considered withdrawing from school in the past 6 months for at least a semester, primarily due to pandemic stress or monetary pressure (source: Gallup).
  1. LOTS OF OUTS – When the New York Mets beat the Philadelphia Phillies 3-0 on Friday 4/29/2022, 5 Met pitchers threw 159 pitches in no-hitting the Phillies. It was the 20th time in history that the Phillies have been no-hit.  That ties the Los Angeles Dodgers for the most times being no-hit in MLB history (source: MLB).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. SHORT TERM AND LONG-TERM – The S&P 500 lost 8.7% (total return) during April 2022, its worst month since March 2020. Over the long-term, the S&P 500 has gained +12.3% per year (total return) for the 100 months through 4/30/2022, gained +9.8% per year (total return) for the last 200 months, gained +8.8% per year (total return) for the last 300 months, and gained +10.8% per year (total return) for the last 400 months.  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. REDUCING RISK – Since peaking at $936 billion at the end of October 2021, margin debt held by US equity investors has fallen 15% to $800 billion at the end of March 2022 (source: FINRA).
  1. IT’S BAD EVERYWHEREGlobal inflation is projected to rise by +7.4% during calendar year 2022 (source: International Monetary Fund).
  1. ABOUT HALF – US inflation, measured by the “Consumer Price Index,” was up +7.0% during 2021. Three percentage points (out of the 7 percentage points) is a function of direct fiscal support from the US government and how American households spent the pandemic-related money (source: Federal Reserve Bank of SF).
  1. IS INFLATION THE REASON? – The US economy shrunk by an annualized 1.4% during the 1Q 2022, an 8.3 percentage point swing from +6.9% annualized growth recorded in the 4Q 2021. Other than the volatile swings in growth in 2020 during the first year of the pandemic, the US has not seen an 8.3 percentage point quarterly downward swing in the size of the US economy since the 4Q 1981 or 40 years ago when the economy went from a +4.9% growth rate to a 4.3% contraction quarter-over-quarter (source: Commerce Department).
  1. BIGGER THAN USUAL? – The Federal Reserve may raise short-term interest rates by 0.50 percentage points following their 2-day meeting this week (on 5/04/2022), action that was last taken by the central bank on 5/16/2000 or 22 years ago. Since then, the Fed has raised rates 27 times over 22 years, but every rate bump has been a 0.25 percentage point hike (source: Federal Reserve).
  1. SPEND IT NOW – From the end of 2019 (pre-pandemic) to the end of 2021, American households increased their “readily available cash” from $10.6 trillion to $14.7 trillion, an increase of $4.1 trillion of cash accumulated over the 24-month period (source: Federal Reserve).
  1. ADD TO POPULATION3.7 million babies were born in the United States in 2021. Nearly 3 times as many babies (10.6 million) were born in China in 2021, the lowest number of annual Chinese births based on records maintained since 1949 (source: US National Center for Health Statistics, China’s National Bureau of Statistics).
  1. DRAG ME OUT – It took an average of 917 days (2 ½ years) for banks to complete the foreclosure process on the 11,824 homes that were repossessed nationwide during the 1st quarter of 2022 (source: Attom Solutions).
  1. WHAT DID YOU BUY? – Nearly 3 of every 4 sales of “light vehicles” (73%) in America in 2021 were the purchase of trucks and sport utility vehicles, a percentage that rose to 80.5% of all “light vehicle” sales in March 2022, an all-time record (source: Edmunds).
  1. FOR MANY YEARS TO COME – The leasing of federal land in 9 US states (Wyoming, Colorado, Utah, Nevada, Montana, Alabama, New Mexico, North Dakota and Oklahoma) to domestic oil producers that began on 4/18/2022 could generate crude oil production past the year 2030 (source: American Petroleum Institute).
  1. IT PEAKED TWO YEARS AGO – The highest level of crude oil production in US history was 13.1 million barrels a day as of Friday 3/13/2020, the day President Donald Trump declared a national emergency due to the pandemic. As of Friday 4/22/2022, our national production of crude oil was 11.9 million barrels a day (source: Energy Information Administration).
  1. CASH FLOW – The 27 nations that make up the European Union buy an estimated $450 million per day of Russian oil and $400 million per day of Russian natural gas (source: Bruegel Think Tank – Brussels).
  1. YOUR NEW HOME – The United States will accept 100,000 Ukrainians fleeing their war-torn country. As of Friday 4/22/2022, 15,000 Ukrainians had arrived in the USA (source: White House).
  1. TOP PICKS – The first 5 picks in the NFL draft held last Thursday 4/28/2022 were defensive players, beginning with # 1 pick Travon Walker of Georgia. That’s the first time defensive players occupied the top 5 draft picks since 1991 or 31 years ago.  Defensive tackle Russell Maryland of Miami was the # 1 pick in 1991 (source: NFL).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. BEHIND THE AVERAGE– The S&P 500 was up +15.6% (total return) over the 1-year ending 3/31/2022, an average monthly gain of +1.22% (total return). However the index actually fell in 4 of the last 12 months, postings monthly results that ranged from a gain of +7.0% (total return) to a loss of 5.2% (total return).  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 SWINGS – The yield on the 10-year Treasury note was cut in half during the first year of the pandemic (2020), falling from 1.91% on 12/31/2019 to 0.91% on 12/31/2020. That movement in rates has flipped around in the first 16 weeks of 2022 as the yield on the 10-year Treasury note has nearly doubled, rising from 1.50% on 12/31/2021 to 2.91% as of last Friday’s close on 4/22/2022 (source: Treasury Department).
  1. IMPACT OF THE PANDEMIC – The United States had 3.459 million deaths in 2021, up from 3.382 million deaths in 2020, which was up from a pre-pandemic 2.855 million deaths in 2019 (source: Centers for Disease Control and Prevention).
  1. A CHANGE AT THE TOP – A 2020 study from “The Lancet,” an international weekly general medical journal founded 199 years ago in 1823, predicted that by the year 2100 the 4 largest populated countries in the world will be India, Nigeria, China and the United States (source: The Lancet).
  1. MISSING FROM WORK – An estimated 3.4 million American workers dropped out of the US labor force since early 2020 when the global pandemic began and have chosen not to return, i.e., the difference between a projected 167.8 million workers that would have been in the labor force if the pandemic had not occurred vs. 164.4 million workers actually in the labor force as of March 2022 (source: Department of Labor).
  1. THEY SHOULD BE – 41% of 1,168 American retirees surveyed in June 2021 were “very concerned” or “somewhat concerned” that the value of their retirement accounts might not keep pace with inflation (source: Society of Actuaries Research Institute 2021 Retirement Risk Survey).
  1. CHINESE GROWTH GOAL – China’s growth target for its economy in calendar year 2022 is a gain of +5.5%. The US economy has grown at least +5.5% in just 4 of the last 50 years (1972-2021), i.e., 1973, 1978, 1984 and 2021 (source: Bureau of Economic Analysis).
  1. WE’LL SEE – Widely-followed Wall Street analyst Ed Yardeni predicted in early April 2022 that Europe has a 50% chance of suffering a recession in 2022 while the US has a 30% chance (source: Yardeni Research, Inc.).
  1. HIS RESPONSE TO HIGH FUEL COSTS – Reversing a 1/27/2021 executive action taken by President Biden that stopped the leasing of federal land for drilling purposes, the Biden administration last week restarted the leasing program on 144,000 acres of public land across 9 different states, i.e., 225 square miles of land. Oil and gas producers will pay a royalty of 18.75% on the revenue generated from drilling (source: White House).
  1. WHAT THEY’RE PAID – The president of the United States is paid $400,000 a year, while the vice president is paid $230,700 annually (source: White House).
  1. THE ORACLE OF OMAHA – The home at 5202 Underwood Avenue in Omaha, NE where Warren Buffett started his first investment partnership in May 1956 goes on the market tomorrow (4/26/2022) for $799,000. Buffett, the 5th wealthiest person in the world, rented the home for $175 a month in 1956 (source: Omaha World Herald).
  1. DWINDLING SUPPLY – The number of existing homes for sale nationwide at the end of March 2022 was 950,000. The number of existing homes for sale at the end of March 2017 was 1.8 million.  The number of existing homes for sale at the end of March 2012 was 2.32 million.  The number of existing homes for sale at the end of March 2007 was 3.81 million (source: National Association of Realtors).
  1. TAXES – The average property taxes paid on a single family home in the United States in 2021 was $3,719, equal to 0.9% of the fair market value of the average home nationwide (source: Attom Data Solutions).
  1. GO FLY AWAY – The busiest 3 airports in the world (as measured by 2021 passenger traffic) are Atlanta (GA), Dallas-Fort Worth (TX) and Denver (CO) (source: Airports Council International).
  1. HIGH HEATHunter Greene, rookie pitcher for the Cincinnati Reds, made his 2nd MLB start on 4/16/2022. Greene threw 80 pitches in his 5 1/3 innings of work vs. the Dodgers, including 39 fastballs of at least 100 mph.  That’s the greatest number of 100 mph pitches in one game in MLB history (source: MLB).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. DOWN YTD – The S&P 500 is down 7.5% YTD (total return) through the close of trading last Thursday 4/14/2022 (the stock market was closed on Friday), the completion of the first 15 weeks of 2022. 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. HARD TO CATCH UP – A 30-year old who is investing $500 at the beginning of every month in a tax-deferred 401(k) will accumulate $588,032 by age 60 if the funds grow at +7% per year. If that individual was forced to suspend his/her monthly deferral for just 5 years from ages 35-39, he/she would have to earn +8.8% per year from ages 40-60 to accumulate $588,032 by age 60.  This mathematical calculation ignores the impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).
  1. HIGH, LOW – For the 9 years from 1973-1981, inflation (using the “Consumer Price Index”) averaged +9.2% per year. For the 9 years from 2012 to 2020, inflation averaged +1.6% per year (source: Bureau of Labor Statistics).
  1. BIG CHANGE – Inflation, using the “Consumer Price Index” as the measurement, was up +8.5% for the 1-year ending 3/31/2022. That’s more inflation than the United States experienced over the 4 years of 2017-2020 when the CPI advanced +7.9% over the entire 4 years (source: Department of Labor).
  1. BLAME IT ON INFLATION – 63% of 2,062 American adults surveyed during the first week of April this year rate the condition of the US economy to be “fairly bad” (32%) or “very bad” (31%). The dominant reason that these individuals were disappointed in the US economy: inflation and the rising cost of goods and services (source: CBS News/YouGov survey).
  1. DISAPPEARING ACT – 60% of American workers born in 1943 were employed by companies that provided a defined benefit pension plan. Just 6% of American workers born in 1964 were employed by companies that provided a defined benefit pension plan (source: Center for Retirement Research).
  1. TIGHT CLUSTER – Less than 4% of the counties in the United States (112 counties out of 3,142 total counties nationwide) are home to 50% of all non-farm jobs in the country (source: Federal Reserve Bank of St. Louis).
  1. HOUSING SHORTAGE – The United States is an estimated 3.8 million homes short of the demand that exists in the country for single-family homes (source: Freddie Mac).
  1. WHO WILL BUY THE LAND? – 70% of the ownership of farmland in the United States will change hands during the next 20 years as the current group of farmers and ranchers retire (source: Department of Agriculture).
  1. SUPPLY OF BONDS TO RISE – After 2 years of adding $120 billion a month of bond purchases, aka “Quantitative Easing,” the Fed will begin “Quantitative Tightening” in May 2022 by allowing $95 billion a month of bonds to “roll-off” its $8.5 trillion balance sheet, i.e., the Fed will not reinvest $95 billion a month of maturing bonds back into newly issued bonds ($60 billion of Treasuries and $35 billion of mortgage-backed securities) (source: Federal Reserve).
  1. MAKE IT SEVEN? – Since payments on federal student loans were suspended for 6 months by the CARES Act on 3/27/2020, Presidents Trump and Biden have extended the original end date 6 times (twice by Trump and 4 times by Biden), most recently on 4/06/2022. The suspension is now good to 8/31/2022 (source: BTN Research).
  1. NOT IN RUBLES – Russia has until Wednesday 5/04/2022 to pay $2.2 billion of foreign debt that was originally due to be paid to an American bank on 4/04/2022. If Russia is unable to repay the debt in US dollars as it is required to do, the default on foreign debt would be Russia’s first since 1917 or 105 years ago (source: AP).
  1. OPEN ARMS – As of Thursday 4/14/2022, 57% of the 4.7 million Ukrainians (2.7 million people) that have fled their country since 2/24/2022 have escaped to Poland, a nation of 38 million people (source: United Nations).
  1. GET A NEW STARTPersonal bankruptcies in the United States in 2021, i.e., nonbusiness bankruptcies, totaled 399,269, down 24% from 522,808 personal bankruptcy filings from 2020 (source: United States Courts).
  1. JOKER – On Thursday 4/07/2022 Denver Nugget basketball star Nikola Jokic, the reigning NBA MVP, became the first player in league history to achieve 2,000 points, 1,000 rebounds and 500 assists during regular season play. The closest Michael Jordan came to the same feat was during the 1988-89 regular season when MJ recorded 2,633 points, 652 rebounds and 650 assists (source: NBA).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. STOCKS – The S&P 500 is down 5.5% YTD (total return) through the close of trading last Friday 4/08/2022 but the index is up +4.8% (total return) since Russia invaded Ukraine on 2/24/2022. 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. NOTHING – An estimated 57% of US households will ultimately pay no federal income tax in tax year 2021 as pandemic-driven legislation eliminated the tax bill of many American families (source: Tax Policy Center).
  1. FUNNY MATH – In a 3/28/2022 release from the White House accompanying their 10-year budget projection, the Biden administration claims its “budget reduces deficits by more than $1 trillion over the next 10 years.” In reality, the White House’s 153-page release forecasts deficits of $14.4 trillion over the 10 fiscal years 2023-2032, the difference between $58.3 trillion of tax receipts and $72.7 trillion of outlays (source: White House).
  1. WAS THE GRASS GREENER? – 11% of 2,067 American adults surveyed in February 2022 voluntarily resigned within the previous 12 months from a full-time job that they held (source: Harris Poll conducted for CareerArc).
  1. INVERTED YIELD CURVE – About 6 ½ months ago (10/01/2021), the yield on the 10-year US Treasury note (1.48%) was 1.21 percentage points higher than the yield on the 2-year US Treasury note (0.27%). Last Monday (4/04/2022), the yield on the 10-year Treasury note (2.42%) had slipped under that of the yield on the 2-year Treasury note (2.43%).  The last time the yield on the 2-year note exceeded that of the 10-year note was on 8/29/2019, 6 months before a recession began in the USA (source: National Bureau of Economic Research).
  1. COSTS MORE – Since 12/31/2021, the average “principal and interest” (P+I) payment on a 30-year fixed rate mortgage has increased $92/month per $100,000 borrowed. On 12/31/2021, the nationwide average mortgage rate of 3.11% translated into a monthly “P+I” of $428 per $100,000  On 4/07/2022, the average mortgage rate of 4.72% translated into a monthly “P+I” of $520 per $100,000 borrowed (source: Freddie Mac).
  1. HOME BUILDING13 million single-family homes began construction in 2021, the 10th year of increasing home starts since this measurement bottomed at 431,000 in 2011 (source: Census Bureau).
  1. WHO IS THE BUYER?Investors, not homebuyers, are behind 33% of the purchases of single-family homes in the United States in today’s market, up 5 percentage points from the 28% of buyers that investors represented over the past decade (source: John Burns Real Estate Consulting).
  1. TO THE SENATE – The House of Representatives passed HR # 2954 on 3/29/2022 (“Securing a Strong Retirement Act”), now sending the bill to the Senate. The legislation, designed to overhaul the current pre-tax retirement system in the US, includes an expansion of auto-enrollment in retirement plans, an increase in the age at which individuals must begin “required minimum distributions” from age 72 to age 75, and improving the access to employer-sponsored plans to part-time workers (source: HR # 2954).
  1. NOT A LOT – The current session of Congress (the 117th, running from 1/03/2021 to 1/03/2023), has passed only 108 bills with 8 ½ months to go. The fewest number of bills passed in any 2-year session of Congress going back to 1973 is 284 during the 112th session of Congress that ended 1/03/2013 (source: GovTrack.us).
  1. STAYING ALIVE – National health care spending in the United States was $4.3 trillion in 2021, 18% of our nation’s $24.0 trillion economy last year (source: Health Affairs).
  1. MISSED DIAGNOSES – Using historical baseline screening rates, Americans skipped or cancelled 68,000 breast cancer screenings and 27,000 colon cancer screenings during the 10-months of January 2021 through October 2021 due to fears surrounding the COVID-19 pandemic (source: Epic Research).
  1. CAN YOU AFFORD IT NOW? – 24% of 1,168 American retirees surveyed in June 2021 indicated that they had to pay for major home repairs during retirement (source: Society of Actuaries 2021 Retirement Risk Survey).
  1. REPLACED BY WHAT? – The 27-nation European Union announced on 3/08/2022 that it will end its purchase of Russian natural gas “well before 2030.” Russia currently supplies 40% of the EU’s natural gas (source: EU).
  1. COACH K – The first loss in Mike Krzyzewski’s record-setting 47-year head coaching career was a 12/10/1975 loss of Coach K’s Army team to Fairfield. His final loss occurred 16,915 days later on 4/02/2022 when Coach K’s Duke squad fell to North Carolina in the national semifinals.  Overall his teams won 77% of the 1,570 games he coached (1,270) while losing just 368 games or less than 8 losses per year for 47 years (source: NCAA).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. STOCKS – The S&P 500 was up +3.7% in March 2022 (total return), its first up month this year after negative results in January and February. The $40.3 trillion stock index is still down 4.6% YTD through 3/31/2022 (total return) but is up +15.6% for the 12-months ending 3/31/2022. 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. BEST STOCK MONTH – April has been the # 1 best month for the S&P 500 index over the last 30 years, i.e., 1992-2021, gaining an average of +2.34% (total return). The month of November (average gain of +2.03%) is the # 2 best performing month over the last 3 decades (source: BTN Research).
  1. DOUBLE-DIGITS – The S&P 500 index has appreciated at least +10% (total return) in 19 of the last 30 years (1992-2021), including 8 of the last 10 years (source: BTN Research).
  1. TEN PLUS – The average US single family home has appreciated at least +10% in just 4 of the last 30 years (1992-2021). The double-digit years were 2004, 2005, 2020 and 2021 (source: Federal Housing Finance Agency).
  1. A LOT OF SPENDING – President Biden’s 10-year budget proposal released on 3/28/2022 forecast fiscal year 2023 (i.e., the 12 months beginning 10/01/2022) tax receipts of $4.64 trillion, outlays of $5.79 trillion, netting to a $1.15 trillion deficit. Biden’s proposal anticipates annual budget deficits of at least $1.15 trillion for each of the next 10 years, adding up to $14.4 trillion of deficit spending over the decade 2023-2032 (source: White House).
  1. WEALTH TAX – President Biden proposed on 3/28/2022 a minimum income tax rate of 20% on the income and unrealized capital gains of households worth at least $100 million, impacting an estimated 20,000 households. Taxpayers impacted would have 10 years to pay the initial tax resulting from this change and would receive a future credit if the value of their assets dropped over the decade.  If the household’s assets continued to grow in value, the individual would owe taxes of 20% on the annual change of their net worth (source: White House).
  1. WAY UP – Per President Biden’s 3/28/2022 budget projection, Social Security outlays will increase by +79% over the next 10 years, Medicare outlays will rise +118% and interest costs will rise +213% (source: White House).
  1. HEAD SHAKER – The White House forecasted on 3/28/2022 that our national debt will reach $44.8 trillion as of 9/30/2032 (i.e., 10 ½ years down the road), up from $30.3 trillion as of 3/30/2022 (source: White House).
  1. LOW WAGES – 32% of the US workforce make less than $15 an hour, including 40% of women in the workforce and 25% of men (source: Oxfam).
  1. PLANNING AHEAD – 22% of 1,061 pre-retirees (i.e., Americans still in the workforce) surveyed in June 2021 updated their estate planning documents since the pandemic began in the 1st quarter 2020 (source: Society of Actuaries 2021 Retirement Risk Survey).
  1. REALLY DUMB IDEA – President Nixon, faced with rising inflation, implemented what was to be a 90-day freeze on prices and wages on 8/15/1971, controls that were largely kept in place until 4/30/1974. The price control strategy did not work.  From 1974-1981, inflation (using the “Consumer Price Index” as the measurement) averaged +9.3% per year for the 8 years (source: Nixon White House).
  1. POPULATION SHIFT – Per the 1950 US Census, Detroit was the 5th largest US city and Baltimore was the 6th largest US city. Per the 2020 US Census, Detroit is the 27th largest US city and Baltimore is the 29th largest US city (source: Census Bureau).
  1. TWO-YEAR GRACE PERIOD – The 37 million Americans with “direct federal student loans” have not been required to make a student loan payment since March 2020, i.e., since the start of the pandemic. $1.3 trillion of the $1.6 trillion in total student loans are “direct federal student loans,” i.e., a loan made directly by the Department of Education (source: Federal Reserve Bank of New York).
  1. NEED RAIN – The water level at Lake Powell dropped to 3,523.13 feet on Thursday 3/31/2022, its lowest level ever. Lake Powell supplies water to Arizona, Nevada and California (source: Bureau of Reclamation).
  1. HOOPS UNDERDOG – St. Peter’s, the darling of the men’s post season college basketball tournament, played its home opener of the 2021-2022 regular season on 11/23/2021 vs. Long Island University in front of just 434 fans in its 3,200-seat arena. The Peacocks’ final game of its season, a 69-49 loss to the North Carolina Tar Heels, was played before a sold-out 20,235 seat arena in Philadelphia (source: ESPN).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. YEAR-TO-DATE RESULTS – With just 4 trading days remaining in the 1st quarter 2022, the S&P 500 stock index is down 4.3% YTD (total return) through the close of trading as of last Friday 3/25/2022. The index, created in 1957, achieved 1 record closing high this year, reached on the 1st trading day of the year (1/03/2022).  The S&P 500 consists of 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. STOCKS – The US stock market, including 4,266 public-traded companies on the NYSE, AMEX and NASDAQ exchanges, was worth $53.4 trillion as of 12/31/2021 (source: Siblis Research).
  1. BONDS – The US bond market (including treasury, municipal, corporate, mortgage and asset-backed debt) was worth $52.9 trillion as of 12/31/2021. Treasury debt ($22.6 trillion) makes up the largest piece of the US bond market (source: Securities Industry and Financial Markets Association).
  1. BOBBY AXELROD – Next Monday (4/04/2022) is the 10-year anniversary of the signing of “The STOCK Act” by President Barack Obama on 4/04/2012, a bill preventing Washington lawmakers from trading stocks based on nonpublic information they gathered on Capitol Hill. STOCK is an acronym for “Stop Trading on Congressional Knowledge.”  The law does not provide a criminal penalty for violators but can impose a monetary fine.  No member of Congress has ever been prosecuted under “The STOCK Act” (source: Senate Bill # 2038).
  1. BUDGET NUMBERS – President Joe Biden is scheduled to release today (3/28/2022) his fiscal year 2023 budget proposal, i.e., a budget for the 12 months beginning 10/01/2022. In May 2021, a long-range forecast generated by the White House included a budget estimate for fiscal year 2023 that projected receipts of $4.6 trillion and outlays of $6.0 trillion, resulting in an estimated $1.4 trillion deficit (source: Office of Management and Budget).
  1. EATING AT HOME – US grocery prices, i.e., “food at home,” increased by +8.6% over the year ending 2/28/2022. That compares to a +3.5% price increase for groceries for the year ending 2/28/2021 and a +0.8% price increase for the year ending 2/29/2020 (source: Bureau of Labor Statistics).
  1. WE BOUNCED BACK QUICKER – Minutes from the Fed meeting that ended on 3/17/2021 (a year ago) anticipated that there would be no interest rate hikes implemented by the Fed until at least 2023. Instead, the Fed raised short-term rates on 3/16/2022 with indications that it may implement additional rate hikes at each of the remaining 6 Fed meetings scheduled in 2022 (source: Federal Reserve).
  1. THAT WILL COST YOU MORE – 55% of 1,009 American adults surveyed in September 2021 do not pay the full amount of their credit card debt each month (source: GOBankingRates).
  1. SMALL INVENTORY – From 12/31/2019 (pre-pandemic) to 2/28/2022, the number of existing homes for sale in the US have declined from 1.39 million to 870,000, a drop of 520,000 (source: National Association of Realtors).
  1. PANDEMIC – On 3/31/20 (2 years ago) the Donald Trump White House announced that US pandemic deaths could be 100,000 to as high as 240,000 “even if social distancing guidelines are maintained” and that sadly “without strict efforts to control the virus” the death toll from COVID-19 could reach 2.2 million. Pandemic deaths were just 3,000 on 3/31/20.  Pandemic deaths were 976,000 as of Friday 3/25/2022 (source: Trump White House).
  1. JOB MARKET – The unemployment rate in the USA was 3.5% in February 2020 (pre-pandemic) and was 3.8% in February 2022. The number of unemployed Americans was 5.7 million in February 2020 and was 6.3 million in February 2022.  The number of job openings was 6.9 million in February 2020 and was 11.3 million in January 2022 (source: Department of Labor).
  1. WILL THEY BE ABLE TO REPAY? – Russia’s government has a $2 billion bond maturing a week from today (4/04/2022), Russia’s first maturing sovereign bond since its invasion of Ukraine on 2/24/2022 (source: Reuters).
  1. OIL PRICE – In the month following Russia’s invasion of Ukraine, the price of West Texas Intermediate crude oil rose by +21%, i.e., from $92.81 a barrel (2/24/2022) to $112.34 a barrel (3/24/2022) (source: NYMEX).
  1. MILLIONS AT RISK – Ukraine’s population is 43.3 million people. California’s population is 38.9 million (source: Worldometer).
  1. A LOST ART – 40 years ago (1982), Rickey Henderson stole 130 bases, a record for MLB. Last year (2021), the Kansas City Royals led all MLB teams with 124 stolen bases.  The Cincinnati Reds had just 36 stolen bases during the 2021 regular season (source: MLB).

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Copyright © 2022 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. “TIME IN” vs. “TIMING” – The split between “up” and “down” time periods for the S&P 500 index from 1950 to the end of 2021, i.e., the last 72 years, as measured by: Days: 54% up and 46% down; Months: 61% up, 39% down; Quarters: 67% up, 33% down; Years: 74% up, 26% down; 5-Year Rolling Time Periods: 79% up, 21% down; and finally 10-Year Rolling Time Periods: 89% up, 11% down. The S&P 500 consists of 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. SINCE THE WAR STARTED – The S&P 500 has gained +4.2% (total return) since Russia invaded Ukraine on Thursday 2/24/2022 through the close of trading last Friday 3/18/2022 (source: BTN Research).
  1. BEAR, THEN UP – The NASDAQ Composite index closed at an all-time high of 16,057 on Friday 11/19/2021. In the 4 months since then, the tech-oriented index fell 21.5% (total return), closing at 12,581 last Monday 3/14/2022.  However by the end of last week’s trading (as of Friday 3/18/2022), the index rose to 13,894.  The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).
  1. IN THE NEXT YEAR – 2020 was the 10th year in the last 72 years, i.e., 1950-2021, that the US economy contracted. Our economy has rebounded the following year with positive growth 8 out of 10 times, including +5.7% growth in 2021 following its 3.5% contraction in 2020 (source: Commerce Department).
  1. MID-POINT – 49% of the 157.8 million Form 1040s that were filed for tax year 2019 (a total of 77.9 million returns) reported less than $40,000 of adjusted gross income (source: IRS).
  1. IT WAS PAINFUL BUT IT WORKED – The Federal Reserve increased short-term interest rates last Wednesday 3/16/2022, raising the federal funds rate to a target range of 0.25% to 0.50%. From 8/15/1979 to 3/18/1980, the Fed under Paul Volcker’s leadership raised the fed funds rate from 11% to 20% to eradicate the double-digit inflation the US was experiencing at that time (source: Federal Reserve).
  1. BORROWED TOO MUCH? – American lenders repossessed 7,418 homes during the first 2 months of 2022 (January-February), up +150% over the 2,973 repossessions that took place during the first 2 months of 2021 (source: Attom Solutions).
  1. WORKERS NEED A PLAN10 US states have enacted legislation that provide “Auto-IRA” pre-tax retirement accounts for private sector workers who are employed by businesses that do not provide a pre-tax retirement plan option. The 10 states are California, Colorado, Connecticut, Illinois, Maine, Maryland, New Jersey, New York, Oregon and Virginia (source: Georgetown University Center for Retirement Initiatives).
  1. MORE THAN $3 TRILLION – President Joe Biden signed 2 major pieces of legislation in 2021 designed to boost the US economy. The $1.9 trillion American Rescue Plan Act (HR # 1319) was enacted on 3/11/2021 and included $402 billion of stimulus checks for families based on household income.  The $1.2 trillion Infrastructure Investment and Jobs Act (HR # 3684) was enacted on 11/15/2021 and included $559 billion of new infrastructure spending and $650 billion of previously authorized funding (source: White House).
  1. NOT RENEWED THIS YEAR$93 billion in Child Tax Credit payments were paid over the final 6 months of 2021 on behalf of 61 million children from 40 million families (source: Treasury Department).
  1. WHO OWES WHAT – 35% of the 43 million Americans with student loans (15 million borrowers) have less than $10,000 of outstanding student loan debt (source: Committee for a Responsible Federal Budget).
  1. SICK WITH UNPAID BILLS – 13% of the 23 million Americans with medical debt (3 million folks) have more than $10,000 of outstanding medical debt (source: Peterson-KFF Health System Tracker).
  1. WATER NEEDED74% of the land in the western United States (covering 9 US states) is in a “severe drought” as of last Thursday 3/17/2022 (source: US Drought Monitor).
  1. LEGAL OR NOT?18 US states have legalized the recreational use and sale of marijuana, in spite of the fact that the use and sale of marijuana remains illegal at the federal level (source: US News & World Report).
  1. THE BARE MINIMUM – From 2011 to 2021, the minimum salary of a major league baseball player increased by $156,500, i.e., from $414,000 (2011) to $570,500 (2021). The MLB collective bargaining agreement signed on 3/10/2022 increased the minimum salary for the 2022 baseball season by $129,500, i.e., from $570,500 (2021) to $700,000 (2022).  The most Babe Ruth made in any one MLB season was $80,000 in 1931 (source: MLB).

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