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Bill’s By The Number$

  1. STOCKS AND INFLATION – During the 16 highest inflation years over the last 100 years, i.e., 1922-2021, the S&P 500 has been “up” 8 years and “down” 8 years. The index’s average return for all 16 years is a gain of +3.9% per year (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.  The “Consumer Price Index” was used as the inflation benchmark (source: BTN Research).
  1. SINCE THEN – President Donald Trump declared the coronavirus pandemic a “national emergency” on Friday 3/13/2020. Over the 2-years since then, i.e., Monday 3/16/2020 through Friday 3/11/2022, the S&P 500 gained +60.0% (total return), in spite of a 12.0% loss (total return) on Monday 3/16/2020 (source: BTN Research).
  1. ADDING TO CASHMoney market funds in the United States (including retail and institutional funds, both taxable and tax-free) have increased $799 billion (to $4.6 trillion from $3.8 trillion) over the trailing 24 months as of last Friday 3/11/2022, an average increase of $1.1 billion a day. President Donald Trump declared a national emergency as a result of the pandemic on Friday 3/13/2020 (source: Investment Company Institute).
  1. FIRST OF MANY? – The Federal Reserve is widely expected to raise short-term interest rates this Wednesday (3/16/2022), in what would be its first rate hike since 12/19/2018. The rate hike on 12/19/2018 was the Fed’s 8th rate increase implemented over a 2-year period that began on 12/14/2016 (source: Federal Reserve).
  1. LESS THAN WHAT YOU THINK – The average single family home in the United States has appreciated just +4.7% per year over the 25 years from 12/31/1996 to 12/31/2021 (source: Federal Housing Finance Agency).
  1. READY FOR A CHANGE – 27.1 million Americans moved last year, 8.4% of the US population. That’s the lowest percentage of Americans that reported living at a different residence based on an annual survey conducted since 1948.  Of the 27.1 million movers in 2021, just 4.4 million people moved out-of-state.  25 years earlier (1996), 16.3% of Americans moved in the prior 12 months (source: Census Bureau).
  1. THE AVERAGE WORKER – Average hourly earnings in the private sector (nonfarm) reached $31.58 an hour as of 2/28/2022, up +5.1% on a year-over-year basis. 10 years earlier (2/29/2012), average hourly earnings in the private sector were $23.27 an hour (source: Bureau of Labor Statistics).
  1. WORKING FULL-TIME – The number of Americans with full-time jobs peaked at 5 million as of 2/29/2020 (pre-pandemic), fell to 130.5 million as of 4/30/2020, and has since rebounded to 150.4 million as of 2/28/2022 (source: Bureau of Labor Statistics).
  1. MAXED OUT – Only 8.5% of workers who have access to an employer-sponsored defined contribution plan, e.g., 401(k) plan, contribute the maximum amount permitted by law (source: Congressional Research Service).
  1. EDUCATION – 62% of American adults have received education beyond high school, including adults with some college credits all the way to those adults who have earned a doctoral degree (source: Census Bureau).
  1. HIGHEST PRICE FOR CRUDE OIL – The price of West Texas Intermediate (WTI) crude oil reached its highest level ever at $147.27 a barrel on 7/11/2008, less than a month before Russian forces invaded the former Soviet republic of Georgia on 8/08/2008. That conflict lasted just 5 days.  WTI crude closed at $123.70 a barrel last Tuesday 3/08/2022, 12 days after Russia invaded Ukraine (source: Atlantic Council).
  1. IMPORTS FROM RUSSIA AND CHINA – US consumers imported $29.7 billion of goods from Russia in 2021. US consumers imported $506.4 billion of goods from China in 2021 (source: Department of Commerce).
  1. DO THE CALCULATION – An individual turning age 72 during calendar year 2022 can delay his/her first “required minimum distribution” (RMD) from pre-tax retirement plans until 3/31/2023, but then he/she will need to take a 2nd RMD as of 12/31/2023. The 12/20/2019 SECURE Act changed the age requirement to begin RMDs from age 70 ½ to age 72.  See a tax expert for details (source: SECURE Act).
  1. CRYPTO – President Joe Biden signed an executive order on Wednesday 3/09/2022 that sets in motion the research and development of an American “Central Bank Digital Currency” (CBDC). 19% of US small businesses expect to offer cryptocurrencies as a payment option in 2022 (source: White House).
  1. GOLFERS2 of the top 3 male golfers in the world are not Americans, i.e., # 1 ranked Jon Rahm (Spain) and # 3 ranked Viktor Hovland (Norway). 2 of the top 3 female golfers in the world are not American, i.e., # 1 ranked Jin Young Ko (Korea) and # 3 ranked Lydia Ko (New Zealand) (source: Official World Golf Rankings, Rolex Rankings).

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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. DOWN AND DOWNER – The S&P 500 was down 3.0% (total return) in February 2022, following its 5.2% drop in January 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. ROUGH START TO THE YEAR – As of the close of trading on Monday 2/28/2022, 308 individual stocks in the S&P 500 were down YTD (source: BTN Research).
  1. DEFAULT – Russia announced on 8/17/1998 that it was unable to service its government debt (both short-term and long-term) with a face value of $45 billion, causing ripples in the global economy. The S&P 500 fell 11.6% (total return) within 2 weeks (to 8/31/1998) before recovering.  From 8/17/1998 to 2/17/1999 (6 months), the S&P 500 was up +13.8% (total return), continuing a bull run that would end on 3/24/2000 (source: BTN Research).
  1. HIS OPINION – In his 2/27/2021 annual investor newsletter (i.e., a year ago), Warren Buffett opined that “bonds are not the place to be these days. Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future.”  Taxable bonds were down 3.4% (total return) over the 1-year from 2/27/2021 to 2/27/2022.  The Bloomberg Barclays US Aggregate Bond Index, 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.  The widely followed bond index was created in 1986 but has released backdated performance history calculated to 1976 (source: Berkshire Hathaway, Bloomberg Barclays).
  1. MOST DON’T MAKE A LOT OF MONEY – 31.5% of the 148.2 million tax returns that were filed nationwide for tax year 2019 (the latest year for which data has been released) did not pay any federal income tax, a total of 46.7 million tax returns. 83.5% of these “non-taxable” returns (39.0 million returns) reported adjusted gross income of less than $44,269 (source: Internal Revenue Service).
  1. I’M GOING ELSEWHERE47.4 million Americans quit their full-time jobs in 2021, the highest annual number recorded in the United States based on data tracked since 2001 (source: Department of Labor).
  1. PLEASE? – 49% of 639 small business owners surveyed in December 2021 report they have job openings that they are unable to fill (source: National Federation of Independent Business).
  1. SIX MILLIONWorldwide deaths from COVID-19 were 5.98 million as of Friday morning 3/04/2022, while US deaths were 956,000 (source: Johns Hopkins University).
  1. INTERNATIONAL TRANSACTIONS – The Society for Worldwide Interbank Financial Telecommunications (SWIFT) was formed 49 years ago in 1973. The non-profit cooperative formed by European bankers operates worldwide in 193 countries and electronically moves transactions between 11,000 financial institutions (source: SWIFT).
  1. COULD THE INVASION IMPACT THESE EXPORTS? – 12% of the world’s wheat exports and 16% of the world’s corn exports come from Ukraine (source: Department of Agriculture).
  1. TOO MUCH SUPPLY? – The Federal Reserve owned $1.37 trillion of mortgage-backed securities (MBS) on 3/11/2020, 2 days before President Trump declared a national emergency due to the global pandemic. 2 years later (3/02/2022), the Fed has doubled its MBS to $2.69 trillion.  To implement its plan to reduce its MBS, the Fed will sell MBS outright or allow the MBS to mature.  Either plan may result in an increasing supply of MBS in the bond market which may drive prices of MBS lower and push mortgage yields higher (source: Federal Reserve).
  1. BRAND NEW HOMES – The median sales price of a new home sold in the USA in January 2022 was $423,300, an all-time record high both on a nominal basis and on an inflation-adjusted basis (source: Census Bureau).
  1. NOT ALWAYS UP – For 17 consecutive quarters (from 3/31/2007 through 6/30/2011), the average price of American single-family homes fell in value (source: Federal Housing Finance Agency).
  1. NEW VOICES WANTED – Senator Rick Scott (R-FL) introduced on 2/22/2022 “An 11 Point Plan to Rescue America,” including a recommendation to enact a 12-year term limit for members of Congress. As of Tuesday 3/01/2022, 123 members of the House (out of 435) and 53 members of the Senate (out of 100) have served in Washington at least 12 years (source: GovTrack.us).
  1. BLUE BLOODS – On 2/26/2022, the top 6 men’s teams in the AP basketball poll – Gonzaga, Arizona, Auburn, Purdue, Kansas and Kentucky – all lost games on the same day for the first time in history (source: ESPN).

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Bill’s By The Number$

  1. CORRECTION – The S&P 500 closed at 4226 on 2/23/2022, down 11.9% from its 1/03/2022 closing high, the index’s 8th “correction” in the last 20 years, i.e., a fall of at least 10% but less than 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).
  1. WHERE? – The average single-family home in the USA appreciated +54.5% for the 5 years ending 12/31/2021. Homes in Idaho (+118.2%) have experienced the greatest growth while homes in North Dakota (+23.5%) have seen the least percentage increase in value (source: Federal Housing Finance Agency).
  1. SMALLER HOMES – The average size of a single-family home built in the US in 2020 was 2,480 square feet, the 5th consecutive year that the national average size has declined (source: Census Bureau).
  1. HIGHEST NUMBERS EVER – Mortgage debt ($10.93 trillion) and auto loan debt ($1.46 trillion) reached all-time record highs as of 12/31/2021, while student loan debt ($1.58 trillion) at the end of 2021 was just $8 billion below its all-time high (source: Federal Reserve Bank of New York).
  1. WIDELY EXPECTED – If the Fed does raise short-term interest rates as expected following its March 15-16 meeting, it will be the first Fed rate hike since 12/19/2018 or 39 months earlier (source: Federal Reserve).
  1. MAKES IT HARDER TO BUY – The average 30-year fixed rate mortgage nationwide was 3.89% last Thursday (2/24/2022), resulting in a $471 monthly “principal and interest” payment per $100,000 borrowed. The lowest average 30-year fixed rate mortgage in US history was 2.65% on 1/07/2021 (14 months ago), resulting in a $403 monthly “principal and interest” payment per $100,000 borrowed (source: Freddie Mac).
  1. NOT A GREAT RETURN – A high-income American couple who retired in 2020 is projected to pay $828,000 (stated as a 2021 present value number) in lifetime Social Security payroll taxes and is projected to receive $849,000 (stated as a 2021 present value number) in lifetime Social Security benefits, i.e., for every $1 paid in taxes, the couple will receive $1.03 in benefits (source: Tax Policy Center).
  1. WHEN IT COMES TO HEALTH CARE – A high-income American couple who retired in 2020 is projected to pay $223,000 (stated as a 2021 present value number) of lifetime Medicare payroll taxes and is projected to receive $510,000 (stated as a 2021 present value number) of Medicare benefits, i.e., for every $1 paid in taxes, the couple will receive $2.29 in benefits (source: Tax Policy Center).
  1. OUR DEMAND OUTPACES OUR PRODUCTION – The United States became a “net exporter of petroleum products” for the first time ever in 2020, i.e., we exported more than we imported. Due to America’s rapidly increasing demand for crude oil in 2022, the US is forecasted to be a “net importer of petroleum products” this year, i.e., we will import more than we export (source: Energy Information Administration).
  1. SUPPLIED BY RUSSIA – 41% of the natural gas imported by the 27 nations that make up the European Union is supplied by Russia, along with 25% of the region’s crude oil (source: Eurostat).
  1. GAS AND OIL – Revenue from Russia’s crude oil and natural gas production generates more than 40% of the total revenue of the Russian government. Russia is the # 2 global producer of natural gas and the # 3 global producer of crude oil (source: Council on Foreign Relations).
  1. DEFENSE – In President Biden’s State of the Union address tomorrow (3/01/2022), he is expected to ask for a fiscal year 2023 defense budget of $770 billion, i.e., for the 12 months beginning 10/01/2022. Our actual defense spending 10 years earlier in fiscal year 2013 was $633 billion (source: Office of Management and Budget).
  1. THE LAST ELECTION – Even though 154.6 million Americans voted in the November 2020 presidential election, an all-time record, there were another 77 million Americans in our nation’s “citizen voting-age population” who were eligible to vote and did not (source: Census Bureau).
  1. CORNHUSKER – The cost of fertilizer makes up 36% of the operating cost for a US farmer growing corn. The price of nitrogen-based fertilizers, a key input into corn production, is in part driven by the rising price of natural gas in the United States (source: Department of Agriculture).
  1. WILL THERE BE AN OPENING DAY THIS YEAR? – Even though the average salary for a major league baseball player was $4.17 million on opening day 2021, 62% of the baseball players in the league on opening day were making less than $1 million and 35% were making less than $600,000 (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. SOME TURN INTO BEARS – As of the close of trading on Friday 2/18/2022, the S&P 500 is down 9.3% from its all-time closing high set on Monday 1/03/2022. 6 of the index’s 26 tumbles of at least 10% that have occurred in the last 50 years were “bear” markets falling at least 20% from a previous closing high.  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. ONE WAS JUST LUCKY – A person with $1 million invested 100% in the S&P 500 as of 1/01/1973 who was withdrawing an inflation-adjusted $100,000 per year would be out of money in just 9 years, i.e., as of 12/31/1981. The very next day, a 2nd person also with $1 million invested in the S&P 500 as of 1/01/1982 who is withdrawing an inflation-adjusted $100,000 per year would have $7.72 million remaining after 40 years, i.e., as of 12/31/2021.  This calculation ignores the ultimate 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 or performance.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).
  1. START RIGHT AWAY – A child born in February 2000 (22 years ago) who started college in the fall of 2018 is scheduled to graduate from an average 4-year public in-state college in May 2022. If the child’s parents had invested $150 per month beginning at the child’s 2000 birth and had earned an annualized +8% on all invested dollars, the parents would have been able to pay for their child’s 4-year college expenses of tuition, fees, room and board (the 4-year cost was $88,330).  This calculation ignores the ultimate impact of taxes on the investment account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: College Board).
  1. THE PRICE OF ELITE – The average 1-year cost of tuition, fees, room and board at a private 4-year American college for the 2021-2022 school year was $50,580 (source: College Board).
  1. FEWER BABIES – The United States had 3.611 million births in 2020, a total that is projected to fall by 300,000 to 3.3 million when the final 2021 birth total is reported. US births were 3.96 million in 2011 (source: CDC).
  1. THE BIGGEST – The 4 largest monthly budget deficits in US history occurred over a 12-month stretch beginning in April 2020. The 4 months were April 2020 ($738 billion deficit), May 2020 ($399 billion deficit), June 2020 ($864 billion deficit) and March 2021 ($660 billion) (source: Treasury Department).
  1. PAY FOR IT LATERStudent loan debt in the United States was 84% larger than credit card debt nationwide as of 12/31/2021, i.e., $1.58 trillion to $860 billion (source: Federal Reserve Bank of New York).
  1. A TAX THAT IMPACTS VERY FEW – 3,382,000 Americans died in 2020 or 9,240 a day. But of that 2020 death total, just 1,275 Americans paid federal estate taxes in 2020, down from 139,000 in 1976 (source: IRS).
  1. SPENDING WHAT YOU DON’T HAVE – Americans added $1 trillion of household debt in 2021, increasing from $14.56 trillion as of 12/31/2020 to $15.58 trillion as of 12/31/2021 (source: Federal Reserve Bank of NY).
  1. WE’RE STILL PRODUCTIVE58% of 10,737 workers surveyed worldwide during November 2021 are working part-time in an office environment and part-time at home, an increase of 12 percentage points from 46% who were functioning this way in May 2021 (source: Future Forum Pulse).
  1. SIDE HUSTLE27% of American adults earn money from “gig activities,” e.g., childcare, house cleaning, ride sharing, selling goods online or renting property (source: Report on the Economic Well-Being of US Households).
  1. MAKING MONEY – The breakeven price of crude oil that an American oil producer requires to be profitable on a new well is between $46 to $58 per barrel, depending on where the drilling occurs. The price of West Texas Intermediate crude oil closed at $91.07 a barrel on Friday 2/18/2022 (source: Federal Reserve Bank of Dallas).
  1. NEW WHEELS – The average price of a new vehicle purchased in the United States in December 2021 was $45,743, an all-time record (source: J.D. Power).
  1. WHEN’S THE NEXT? – The US has suffered through 11 recessions in the last 70 years. The last recession lasted only 2 months, the shortest in history, and ended in April 2020 (source: Nat’l Bureau of Econ. Research).
  1. NO PLACE LIKE HOME – In the first 54 Super Bowls (1967-2020), no NFL team played and won the game on their home field. But in the last 2 Super Bowls (# 55 and # 56), the winning team (Tampa Bay in 2021 and the Los Angeles Rams in 2022) played and won the game on their home field (source: NFL).

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Bill’s By The Number$

  1. BIG SHOES – There are 505 individual stocks in the S&P 500. The 41 largest capitalized stocks in the index as of the close of trading last Friday 2/11/2022 had a larger collective market cap than the remaining 464 stocks.  Since the S&P 500 is a cap-weighted index, the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation.  The S&P 500, consisting of 500 stocks chosen for market size, liquidity and industry group representation, was used as the stock measurement.  It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).
  1. INTEREST RATES RISING – Between 12/14/2016 and 12/19/2018 (a 2-year period), the Federal Reserve raised short-term interest rates 8 times, with each hike increasing rates 0.25 percentage points (an overall increase of 2 percentage points). Over the same 2-year period, the yield on the 10-year Treasury note rose from 2.54% to 2.77% (source: Treasury Department).
  1. TREASURY NOTE – The yield on the 10-year Treasury note closed at 2.03% last Thursday 2/10/2022, ending a streak of 633 trading days of closing yields for the 10-year note below 2%, i.e., 8/01/2019 through 2/09/2022. From 1946 to 9/06/2011, the yield on the 10-year Treasury note did not close below 2%.  10-year Treasury notes have been traded in the United States since 1790, i.e., 232 years of trading (source: Treasury Department).
  1. BAD GUESS – As part of a 10-year budget projection made by the Congressional Budget Office in January 2012 (i.e., 10 years ago), our national debt, which was $15.223 trillion as of 12/31/2011, was forecasted to reach $21.665 trillion as of 9/30/2022. Our actual national debt is $30.036 trillion as of 2/10/2022 (source: CBO).
  1. FINALLY IN THE BLACK – The US government ran a $119 billion surplus in January 2022, breaking a streak of 27 consecutive months of deficits, and its first surplus month during the pandemic (source: BTN Research).
  1. SURPRISE! – When the government reported on 2/04/2022 the jobs number from January (a gain of +467,000 new jobs), they also revised November’s job gains (from +249,000 to +647,000) and December’s job gains (from +199,000 to +510,000), resulting in +709,000 “new” jobs from the 2 months (source: Department of Labor).
  1. DREAM HOME – Ground was broken in the United States on the construction of 111,600 single-family homes in June 2021, the largest monthly total nationwide since September 2006. The 1.12 million housing starts in all of calendar year 2021 was the largest US total reported since 2006 (source: Census Bureau).
  1. HOW WE LIVE – Of the 8.8 million US households created in the 5 years ending 12/31/2021, 90% were “owner” households while 10% were “renter” households, i.e., “owner” households grew by +7.9 million to 83.5 million, while “renter” households grew by +914,000 to 44.0 million (source: Census Bureau).
  1. NO GASOLINE NEEDEDElectric vehicle sales globally increased by +112% in calendar year 2021, rising from 3.0 million to 6.3 million worldwide (source: Benchmark Mineral Intelligence).
  1. ARE YOU REALLY HUNGRY? – A “food price index” that measures the change in food prices internationally was up +19.6% on a year-over-year basis as of 1/31/2022 (source: Food and Agricultural Org. of the U.N.).
  1. A LOT MORE IN THAN OUT – For every $1 of goods that US companies exported to Chinese buyers in 2021, American consumers imported $3.35 of goods from Chinese manufacturers (source: Department of Commerce).
  1. FORTY YEARS – Inflation, as measured by the Consumer Price Index, was up +7.48% year-over-year as of 1/31/2022, the highest annual rate recorded in the US since February 1982 when year-over-year inflation was up +7.62%. Just 1-year ago (1/31/2021), year-over-year inflation was up +1.40% (source: Department of Labor).
  1. CREDIT TECHNOLOGY – An average American worker has increased his/her productivity by +52% in the last 22 years, i.e., an average worker can complete in 1 hour, 58 minutes as of 12/31/2021 the same amount of work that it took him/her 3 hours to finish as of 12/31/1999 (source: Department of Labor).
  1. STATE-BY-STATE – The unemployment rate in 12 of the 50 US states dropped to their lowest levels ever in December 2021 based on statewide data tracked since January 1976. The 2 states with the lowest jobless rate were Nebraska (1.7%) and Utah (1.9%)California’s 6.5% jobless rate is the highest in the nation as of December 2021 (source: Bureau of Labor Statistics).
  1. YOUTH MOVEMENTSuper Bowl # 56, yesterday’s football matchup between the underdog Bengals and the favorite Rams was the first Super Bowl in history to feature head coaches who are both under the age of 40. The Bengals’ Zac Taylor is 38 while the Rams’ Sean McVay is 36 (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. TEN YEARS – Since 1950, there have been 63 different 10-year periods (i.e., the 10-years from 1950-59, 1951-60, . . ., 2012-2021). The S&P 500 produced a positive total return in 61 of the 63 decade-long periods.  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. LOUSY MONTH65% of the stocks in the S&P 500 were down in January 2022, including 35 individual stocks that lost at least 15% (source: BTN Research).
  1. HIGH RETURN, HIGH RISK – The NASDAQ Composite fell 9.0% (total return) in January 2022, its worst monthly drop since the tech-heavy index lost 10.0% (total return) in March 2020 at the beginning of the global pandemic. The NASDAQ Composite gained +142.0% (total return) over the 3-years 2019-2020-2021.  The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).
  1. DURING HIS FIRST FOUR-YEAR TERM – Subject to Senate approval, Jerome Powell will serve a 2nd 4-year term as the Federal Reserve Chairman. In the 1,009 trading days since Powell began as chairman on 2/05/2018, the S&P 500 has gained +15.0% per year (total return) over the 4-years (source: BTN Research).
  1. CONSECUTIVE YEARS? – The taxable bond market was down 2.2% YTD (total return) as of 1/31/2022. This is following a 1.5% loss (total return) in 2021.  In the last 46 years, the taxable bond market was down just 4 years and never down in back-to-back years.  The Bloomberg Barclays US Aggregate Bond Index, 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.  The widely followed bond index was created in 1986 but has released backdated performance history calculated to 1976 (source: Bloomberg Barclays).
  1. SOONER THAN EXPECTED? – The Congressional Budget Office forecasted on 2/01/2021 (a year ago) that the number of employed Americans (157.2 million as of 1/31/2022 and up +7.2 million in the last year) would not recover to its pre-pandemic level of 158.9 million (from 2/29/2020) until 2024 (source: CBO).
  1. BROKE399,269 Americans filed for personal bankruptcy in 2021, down 24% from 522,808 personal bankruptcy filings in 2020 (source: United States Courts, Table F-2, Bankruptcy Filings).
  1. HOUSING COSTS GO UP – The cost to rent housing nationwide increased by an average of +14.1% in 2021. The average monthly mortgage payment paid by a new US homeowner who put 5% down at purchase increased by +21.6% in 2021 (source: Redfin).
  1. HOUSEHOLDS – During 2021, the number of US renter households increase by 981,000 to 44.0 million, while the number of US owner households increased by 700,000 to 83.5 million (source: Census Bureau).
  1. TRUSTING THE FED – In spite of inflation (measured by the Consumer Price Index) that was up +7.0% in 2021, the long-term inflation expectations of the bond market as of Tuesday 2/01/2022 are for inflation of just +2.43% per year over the next 10 years (source: Federal Reserve Bank of St. Louis, 10-Year Breakeven Inflation Rate).
  1. PASSED ONTO THE CONSUMER – The cost of transporting freight on the ocean route between Asia and the US West Coast for the week of 1/17/2022 was $15,171 per container, an increase of +250% compared to the same week in 2021 (source: Freightos Baltic Index).
  1. WHAT IF? – The average interest rate paid by the US government on its interest-bearing debt was 1.565% as of 12/31/2021, was 2.429% as of 12/31/2019, and was 4.508% as of 12/31/2004 (source: Treasury Department).
  1. NEED FOR MONEY – The Treasury Department will auction this week $110 billion of 3-year notes ($50 billion), 10-year notes ($37 billion) and 30-year bonds ($23 billion), down from the $120 billion of debt that was sold during the government’s November 2021 quarterly auction (source: Treasury Department).
  1. TEACHING CRISIS – A high school graduate at least age 18 who can pass a background check can obtain an “emergency substitute license” to teach in Kansas high schools effective 1/12/2022 through 6/01/2022, waiving the normal requirement of 60 semester credit hours needed from a college (source: Kansas St. Bd. of Education).
  1. DEUCES ARE WILD – On Wednesday 2/02/2022 in a pro basketball game the New York Knicks, Memphis Grizzlies NBA player Desmond Bane (jersey # 22), shot 4 of 18 from the field (22.22% shooting percentage), had 2 assists, 2 turnovers, 2 steals and 2 blocked shots. Bane is in his 2nd NBA season.  He made the All-Rookie Second Team following his first year in the league (source: Adam Price Research).

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Bill’s By The Number$

  1. JANUARY – The S&P 500 is down 6.9% YTD (total return) with just 1 trading day left in the month. That’s the worst January performance since the index lost 8.4% (total return) in January 2009.  The tumble in 2009 continued through 3/09/2009 when the S&P 500 reached a 24.6% YTD loss.  The next day (3/10/2009) began an 11-year bull market that ran until 2/19/2020 when the global pandemic struck.  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. DECLINES HAPPEN – When the S&P 500 closed at 4327 on Thursday 1/27/2022, the stock index was down 9.7% from an all-time closing high of 4793 set just a month ago on 12/29/2021. A decline of 10% would be the index’s 21st tumble of at least 10% (but less than 20%) in the last 50 years but would be its 6th since 2015.  Declines of at least 10% but less than 20% from a previous closing high are called “corrections” (source: BTN Research).
  1. BEARS TOO – In addition to stock “corrections,” the S&P 500 has suffered 7 “bears” in the last 50 years, i.e., declines of at least 20% from a previous closing high. The last S&P 500 “bear” was a 33.9% fall between 2/19/2020 and 3/23/2020, i.e., early during the global pandemic (source: BTN Research).
  1. REBOUND – After declining by 3.4% in 2020, the US economy rebounded with a +5.7% growth rate in 2021. The 3.4% shrinkage in 2020 was our 4th down year in the last 40 years (1982-2021), while the +5.7% growth rate last year was our best year since 1984 (source: Department of Commerce).
  1. MURPHY’S LAW – The total of “rainy day” funds held by our 50 states doubled from the end of fiscal year 2018 to the end of fiscal year 2021, i.e., from $68 billion to $113 billion (source: Nat’l Assoc. of State Budget Officers).
  1. BOUNCE BACK – After peaking at $58.6 trillion on 9/30/2007, household net worth fell 14% to $50.4 trillion as of 3/31/2009 (global mortgage crisis). It took another 3 years (to 3/31/2012) before household net worth exceeded the previous peak of $58.6 trillion.  After peaking at $118.4 trillion on 3/31/2020, household net worth fell 6% to $110.8 trillion (global pandemic).  It took just 3 months (to 6/30/2020) before household net worth exceeded the previous peak of $118.4 trillion (source: Federal Reserve).
  1. SELLING HOMES – The sale of existing homes nationwide peaked at 7.1 million in 2005, then fell for the next 3 years before bottoming at 4.1 million in 2008 but has climbed back to 6.1 million sales in 2021 (source: National Association of Realtors).
  1. NO DEBT – As of 9/30/2021, 26% of all US households (both renter households and owner households) are homeowners who have no mortgage debt on their primary residence, i.e., 33.3 million debt-free households out of 126.9 million households nationwide (source: MBA).
  1. WELCOME BACK TO WORK89% of the 25.5 million American jobs lost during the first 2 months of the global pandemic (i.e., between February 2020 and April 2020) have been hired back by employers as of the end of December 2021 (source: Department of Labor).
  1. UP – Compensation (wages and benefits) for civilian workers, i.e., all US workers except federal workers, military personnel and agricultural workers, rose +4.0% in 2021, its highest advance in 20 years (source: DOL).
  1. DRIVERS NEEDED73% of freight transported within the United States (by dollar) is moved by trucks (source: American Trucking Associations).
  1. PLUS TEN TRILLION – The US national debt reached $20 trillion on 9/08/2017. The US national debt reached $29.924 trillion on Thursday 1/27/2022 or less than 4 ½ years later (source: Treasury Department).
  1. PRINT AND PURCHASE TO END – The Fed’s balance sheet reached $8.38 trillion as of 1/26/2022, up from $3.76 trillion as of 1/08/2020. The first US pandemic death occurred in the week before 1/11/2020.  At last week’s Federal Reserve meeting, officials confirmed its asset purchase program, i.e., Quantitative Easing, will end in March 2022 (source: Federal Reserve).
  1. FUTURE OF CURRENCY?9 countries in the world have launched a digital currency. The Federal Reserve began a review of the pros and cons of a US digital currency in early October 2021 (source: Atlantic Council).
  1. TOM OR AARON? – The NFL conference championships football games that were played over the weekend – Chiefs vs. Bengals and Rams vs. 49ers – breaks a streak of 11 consecutive years (regular seasons 2010-2020) in which either Tom Brady or Aaron Rodgers (or both) have played in the championship round (source: NFL).

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Bill’s By The Number$

  1. STOCK CORRECTION – After closing at an all-time high of 16,057 on 11/19/2021, the NASDAQ Composite index has fallen 14.2% (total return) over the next 2 months to close at 13,769 on Friday 1/21/2022. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).
  1. UP/DOWN – The S&P 500 index has been up 40 of the last 50 years, i.e., 1972-2021, gaining an average of +11.1% per year (total return).  The stock index has produced an average annual gain of +18.8% (total return) during the 40 “up” years while losing an average of 14.8% per year (total return) during the 10 “down” years. The S&P 500 is down 7.7% YTD (total return) through Friday 1/21/2022.  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. WAS IT A BUBBLE? – The US stock market was worth $53.4 trillion as of 12/31/2021, 3 times the size of our $23.2 trillion economy. At the peak of the “Dot-Com” stock bubble in March 2000, the US stock market was worth 1.4 times the size of the US economy (source: Fund Manager Julien Bittel).
  1. COUNTED IN BOTH INDEXES – All 30 individual stocks in the Dow Jones Industrial Average are part of the S&P 500 index. The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy (source: BTN Research).
  1. WHICH SHOULD YOU FOLLOW? – As of 12/31/2021, the S&P 500 represents 79% of the stock market capitalization of the entire US stock market, i.e., $42.4 trillion of $53.4 trillion. As of 12/31/2021, the 30 stocks that make up the Dow Jones Industrial Average represents just 22% of the stock market capitalization of the entire US stock market, i.e., $12.0 trillion of $53.4 trillion (source: BTN Research).
  1. A MILLION LESS – In the fall of 2019 (pre-pandemic), 15.47 million undergraduates were enrolled in college. In the fall of 2021, 14.44 million undergraduates were enrolled (source: Nat’l Student Clearinghouse Research Ctr.).
  1. NOT DONE YET – In 2008-2009, Congress authorized spending of $983 billion to alleviate the impact of the global mortgage crisis, an amount equal to 6% of the size of the $15.2 trillion US economy. In 2020-2021, Congress authorized spending of $5.73 trillion to alleviate the impact of the global pandemic, an amount equal to 25% of the size of the $23.2 trillion US economy (source: Committee for a Responsible Federal Budget).
  1. POLITICAL TREND12 of the last 13 US presidents going back to World War II, i.e., Truman through Trump, saw his party lose House seats in the midterm elections during his 1st term in office. g., 40 Republican seats were lost in the House in November 2018 (Donald Trump’s midterm) while 63 Democratic seats were lost in the House in November 2010 (Barack Obama’s first midterm) (source: The American Presidency Project).
  1. FED JOBS – President Biden nominated 3 individuals – Sarah Bloom Raskin, Lisa Cook and Philip Jefferson – on Friday 1/14/2022 to fill vacant positions on the Fed’s 7-member Board of Governors (source: White House).
  1. RISING PRICES, BOTH IN AND OUT – US import prices rose +10.4% in 2021, the largest year-over-year percentage increase since 2007. US export prices rose +14.7% in 2021, the largest year-over-year percentage increase in history based on data tracked since 1984 (source: Bureau of Labor Statistics).
  1. CARS IN DEMAND – The price of “new vehicles” increased +11.8% in 2021, dwarfed by the +37.3% increase in the price of “used cars and trucks” last year (source: Bureau of Labor Statistics).
  1. OIL USAGE – The government predicted on 1/11/2022 that US oil production of crude oil will reach 12.4 million barrels a day in 2023, setting an all-time record high. US oil production was 11.8 million barrels a day as of the final week of calendar year 2021, the highest level achieved last year (source: Energy Info. Admin.).
  1. THE AVERAGE AMERICAN WORKER – US private sector workers earned an average of $31.31 per hour as of December 2021 (source: Bureau of Labor Statistics).
  1. GOING MY WAY? – The 3 most popular states to move into during 2021 were Texas, Florida and Tennessee. The 3 states with the greatest outflow of people during 2021 were California, Illinois and Pennsylvania.  The rankings are based on more than 2 million rentals of moving trucks last year that involved a “1-way” interstate movement of furnishings, personal belongings and clothing (source: U-Haul Migration Trends 2021).
  1. MAYBE THIS YEAR? – Of the 8 NFL teams remaining in the playoffs as of Friday 1/21/2022, 3 football teams have never won a Super Bowl – the Buffalo Bills, the Tennessee Titans and the Cincinnati Bengals (source: NFL).

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Bill’s By The Number$

  1. INVEST FOR THREE YEARS – Since 1926, 84% of the rolling 3-year periods for the S&P 500 index (i.e., the 94 separate 3-years beginning 1926-28, then 1927-29, . . . 2019-21) have produced a positive 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. YEAR TWO IN THE WHITE HOUSE – This year (2022) is the 2nd year of Joe Biden’s 1st 4-year presidential term. The S&P 500 index has been positive on a total return basis during 15 of the last 24 “presidential 2nd-years,” i.e., 2nd-years dating back to 1929.  The average performance for the S&P 500 index during the last 24 “presidential 2nd-years” has been a gain of just +6.7% (total return) (source: BTN Research).
  1. YOU’RE HIRED – US employers added 6.45 million new jobs in 2021, an average gain of 537,000 new jobs created each month. The smallest monthly jobs gains took place in December 2021 when just 199,000 new jobs were reported.  By year-end 2021, 149.0 million Americans had full-time jobs (source: Department of Labor).
  1. POWER TO THE WORKERAverage hourly earnings of employees in the private sector rose by +4.7% in 2021, on top of a +5.5% gain in 2020. This advancement of wages during a nationwide pandemic, a 2-year average wage gain of +5.1% per year, was double the +2.5% annual gain in average hourly earnings over the preceding 13 years, i.e., 2007-2019 (source: Department of Labor).
  1. HASN’T BEEN ENOUGH – Only 1 out of every 6 workers surveyed in December 2021 (17%) believe they received pay raises during 2021 that allowed them to “keep up with inflation.” 5,365 workers were interviewed for this survey (source: Momentive Poll December 2021).
  1. WAS LOW BEFORE – Inflation, as measured by the “Consumer Price Index” (CPI), was up +7.0% in 2021 after rising just +1.4% in 2020. The +7.0% annual inflation was the highest calendar year inflation since 1981 and was the highest year-over-year inflation since June 1982 (source: Department of Labor).
  1. RUSH TO BUY – Americans borrowed a record $1.61 trillion from mortgage lenders in 2021 to purchase homes, breaking the previous record high for purchase loans of $1.51 trillion set in 2005. The purchase loan total does not include individuals who refinanced existing mortgages (source: Mortgage Bankers Association).
  1. THEY OWN IT NOW – Banks foreclosed on just 25,662 homes nationwide in 2021, down 49% from 50,238 foreclosures in 2020 and down 82% from 143,955 foreclosures in 2019. The worst single year of foreclosures in US history was 1,050,500 foreclosures in calendar year 2010 (source: ATTOM Data Solutions).
  1. A LOT FEWER – There were 1.53 million homes for sale nationwide as of 12/31/2018. Nearly 3 years later, there were 1.11 million homes for sale nationwide as of 11/30/2021 (source: National Association of Realtors).
  1. BRAND NEW CAR – Americans bought 15 million new vehicles in 2021, down from 17 million purchases completed pre-pandemic in 2019. Automakers have blamed a semiconductor chip shortage as a key factor behind their manufacturing problems (source: Cox Automotive).
  1. LEGAL EXCLUSION – Employees that obtain health insurance coverage through their employer do not pay federal income taxes (or payroll taxes) on the economic benefit of that part of their health insurance that is paid for by the employer. The exclusion from taxation of this economic benefit saves US taxpayers $280 billion a year, the largest tax expenditure in the US tax code (source: Congressional Budget Office).
  1. TOP TEN AND EVERYONE ELSE – The top 10% of US taxpayers in tax year 2019 made at least $154,589 of adjusted gross income (AGI), received 47% of all AGI nationwide and paid 71% of all federal income tax (FIT) collected for the 2019 tax year. The bottom 90% of US taxpayers in tax year 2019 made less than $154,589 of AGI, received 53% of all AGI nationwide and paid 29% of all FIT collected for the 2019 tax year (source: IRS).
  1. ESTATE TAXES – The maximum amount that a deceased individual may pass onto his/her heirs federally estate-tax free (with proper planning) rose to $12.06 million in 2022, up from $11.7 million in 2021. The limit was $1 million in 2002 or 20 years ago.  Please consult a tax expert for details (source: Internal Revenue Service).
  1. SAFE MONEY – From 1/01/20 (before the pandemic) to 1/05/22, the size of the money market fund industry in the USA (both taxable and tax-free) rose from $3.6 trillion to $4.7 trillion (source: Investment Co. Institute).
  1. GO DAWGS – ESPN college football analyst David Pollack predicted on 8/28/21 that Alabama would beat Georgia in the SEC Championship game, but Georgia would beat Alabama in the national title game (source: ESPN).

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Bill’s By The Number$

  1. WASHINGTON AND WALL STREET – Democrat Joe Biden began his second calendar year as POTUS # 46 last week. Democrats also maintain their control of Congress with a voting majority in the House and Senate.  Over the last 60 years (1962-2021), the S&P 500 has gained +11.9% per year (total return) when one party controls the White House, the Senate and the House.  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. AFTER THAT – The S&P 500 was up +11.0% (total return) for the 4th quarter 2021, the 19th time in the last 30 years (1992-2021) that the index has had at least a +10% gain (total return) in a quarter. Following the previous 18 quarters when the index was up double-digits, the next quarter was up 17 of 18 times (source: BTN Research).
  1. WORTH MANY TRILLIONS – The US stock market grew by $12 trillion in calendar year 2021, from $41 trillion as of 12/31/2020 to $53 trillion as of 12/31/2021. 10 years ago (12/31/2011), the US stock market was worth just $16 trillion (source: Siblis Research).
  1. A SINGLE STOCK – The largest capitalized individual stock in the US reached $3 trillion on 1/03/2022. 40 years ago (1982), the total market capitalization of all stocks in the world was $2.7 trillion (source: Wordbank.org).
  1. PROTECTING THE DOWNSIDE – There were more put option contracts outstanding (more than 200 million) at the end of 2021 on US individual stocks, ETFs (exchange-traded funds) and stock indices than at any time in history based on records maintained since 2009 (source: CBOE Global Markets).
  1. ONE RIGHT, ONE WRONG – Savita Subramanian, Head of US Equity and Quantitative Strategy at Bank of America, predicted on 12/21/20 that the S&P 500 would end calendar year 2021 at 3800 and that the yield on the 10-year Treasury note would finish the year at 1.50%. As of 12/31/2021, the S&P 500 closed at 4766 and the closing yield on the 10-year note was 1.496% (source: Barron’s).
  1. NOT DOING A LOT – The current session of Congress (the 117th, running from 1/03/2021 to 1/03/2023), has passed only 81 bills with a year 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 ran from 2011-2012 (source: GovTrack.us).
  1. DEBT – The United States increased its national debt by $9.64 trillion in the last 5 years, i.e., 2017-21, rising from $19.977 trillion (12/31/2016) to $29.617 trillion (12/31/2021) (source: Treasury Department).
  1. DOWN FROM A TOP5,079 retail stores closed nationwide in 2021, down from an all-time record 12,200 store closures in 2020 (source: CoStar Group).
  1. PAY NOTHING – 32% of the 148.2 million tax returns that were filed for tax year 2019 (the latest year for which data has been released) did not pay any federal income tax, a total of 46.7 million tax returns (source: IRS).
  1. DUE IN APRIL – Tesla founder Elon Musk claims that as a result of exercising stock options in 2021 that were awarded to him in 2012, he will pay over $11 billion in federal income tax when he files his 2021 individual income tax return, the largest federal income tax bill for any individual in US history. Musk received 26.4 million non-qualified stock options in 2012, allowing him to buy his company’s stock at $6.24 a share at any time before August 2022.  Musk is the richest person in the world, worth $263 billion as of 1/07/2022 (source: CNBC).
  1. NECESSARY SKILLS – Utah has the top financial literacy requirement for its high school students of any of the 50 US states. Utah requires all of its high school students to take a half-year course dedicated to personal finance, and then to take a final exam administered by the state.  Ohio is the latest US state to add some form of financial literacy instruction at the high school level, effective 1/27/2022 (source: Champlain College Inc.).
  1. MAYBE, MAYBE NOT – 37 states do not tax Social Security benefits, while the other 13 states may or may not tax Social Security benefits dependent on other facts, e.g., an individual’s total income (source: USA Today).
  1. HAS NEVER BEEN LOWER – 5 states (Georgia, Nebraska, Oklahoma, Utah and West Virginia) recorded their lowest unemployment rates ever in November 2021. State jobless rates have been tracked nationwide since 1976 (source: Bureau of Labor Statistics).
  1. WHO WINS? – It’s Alabama vs. Georgia in college football’s national championship game tonight (1/10/2022). An Alabama victory would give Nick Saban his 8th national title as a head coach.  His 7 current titles (6 with Alabama and 1 with LSU) is the most in college football history (source: NCAA).

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