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Bill’s By The Number$

  1. FOR THE YEAR – The S&P 500 gained +18.4% (total return) during 2020, the 13th year in the last 25 years that the $33.4 trillion index has returned at least +15% (total return) for the calendar year. 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. LONG-TERM – The S&P 500 has gained an average of +10.9% per year (total return) over the last 50 years (i.e., 1971-2020). The index has been positive in 16 of the last 18 years.  Over the long-term, the S&P 500 has been up during 40 of the last 50 years, i.e., 80% of the time (source: BTN Research).
  1. HIGH-FLYERS – The NASDAQ Composite gained +44.9% (total return) in 2020 and has gained +98.1% (total return) over the last 2 years (2019-2020), its best 2-year run since 1998-1999. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).
  1. BOND INDEX – The taxable bond market was up +7.5% in 2020 (total return) and has gained +7.6% per year (total return) over the last 40 years (1981-2020). The Bloomberg Barclays US Aggregate Bond Index (created in 1986), 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 index is a major benchmark for US bond investors (source: Bloomberg Barclays).
  1. MOST OF THE TIME – The +7.5% total return for Bloomberg Barclays US Aggregate Bond Index in 2020 follows its +8.7% gain in 2019, the best “back-to-back” years for the index since 2001-2002. The widely followed bond index, created in 1986 with backdated history calculated to 1976, has produced a negative total return for the calendar year in just 3 years of the last 40 years, i.e., in 1994, 1999 and 2013 (source: Bloomberg Barclays).
  1. TIME IN THE MARKET – Since 1950 (i.e., 1950-2020), the S&P 500 index has been up 54% of 17,866 trading days, 60% of 852 months, 67% of 284 quarters and 73% of 71 years (source: BTN Research).
  1. MISSING THE BEST – The total return for the S&P 500 over the last 30 years (1991-2020) was a gain of +10.7% per year (total return). If you missed the 24 best percentage gain days over the last 30 years (i.e., 24 days in total, not 24 days per year), the +10.7% annual gain falls in half to a +5.3% annual gain (source: BTN Research).
  1. AVOID THE WORST – The total return for the S&P 500 over the last 30 years (1991-2020) was a gain of +10.7% per year (total return). If you avoided the 24 worst percentage days over the last 30 years (i.e., 24 days in total, not 24 days per year), the +10.7% annual gain rises to a +17.1% annual gain (source: BTN Research).
  1. JOBLESS – The lowest (3.5%) and the highest (14.7%) unemployment rates in the United States in the last 50 years (since 1970) both occurred in 2020, and they took place just 2 months apart (source: Department of Labor).
  1. BIRTHS, DEATHS AND IMMIGRATION – Between 7/01/19 and 7/01/20, the Census Bureau estimated that the US population grew by just +0.35%, i.e., approximately one-third of 1% growth rate between 2019-2020. That’s the lowest year-over-year growth rate in the USA based upon records maintained since 1900 or 120 years of data (source: Census Bureau).
  1. LIVING LONG – The life expectancy at birth of an American baby in 1971, i.e., 50 years ago, was 71.1 years. The life expectancy at birth of an American baby today is 78.7 years.  Thus, life expectancy in the United States has increased 7.6 years over the last half century, i.e., American life expectancy at birth is increasing at the rate of 1 ½ years every decade (source: Center for Disease Control).
  1. TEN-YEAR TREASURY NOTE – The yield on the 10-year Treasury note ended 2020 at 0.91%, its lowest calendar year close ever and down 1 percentage point from its 12/31/19 close of 1.91%. The 10-year Treasury note yield was 0.50% on Monday 3/09/20, its lowest closing yield ever.  10-year notes have been traded in the USA since 1790, i.e., 230 years of trading (source: Treasury Department).
  1. HOUSING – The average interest rate nationwide on a 30-year fixed rate mortgage was 2.76% at the end of 2020. The all-time record low national average is 2.66%, set just 1 week earlier on 12/24/20 (source: Freddie Mac).
  1. OIL PRICES – The price of oil ended 2020 at $48.52 a barrel, down 20.5% from its 2019 close of $61.06 a barrel. Oil’s all-time closing high price is $147.27 a barrel as of 7/11/08 (source: CME Group).
  1. OVERSPENDING – The national debt of the United States was $27.56 trillion as of the close of business on Wednesday 12/30/20, an increase of $4.36 trillion during calendar year 2020 (source: Treasury Department).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. ALL THE OTHER STUFFAdministrative costs make up 34% of total US health care expenditures (i.e., expenses not related to direct patient care) including medical billing, the scheduling of appointments, and hiring of an office staff (source: Annals of Internal Medicine). # 11, 1/13/20.
  1. ADVANTAGE: SELLERS – The number of existing single-family homes for sale has been tracked nationally since July 1982, i.e., for nearly 4 decades. The total peaked in July 2007 at 3.4 million but has now fallen to its all-time low of 1.22 million in December 2019 (source: National Association of Realtors).  # 7, 1/27/20.
  1. MILLIONS DIED – The most lethal health epidemic in the last 500 years was the worldwide flu outbreak that occurred in the fall of 1918 that killed 50 million people globally, including 675,000 Americans. 195,000 Americans died in October 1918, the deadliest month in our nation’s history (source: CDC).  # 14, 2/24/20.
  1. THE SICKEST AMONG US – Just 1% of the US population is responsible for 22% of total health care spending in the country, i.e., 1% of our 329 million population (3.3 million people) create $800 billion of health care expenses or an average of $242,000 per person per year (source: Brookings). # 9, 3/16/20.
  1. NO JOB – First-time jobless claims for the week ending 2/01/20 were 201,000, its lowest level since 11/15/69. Just 7 weeks later, jobless claims for the week ending 3/21/20 were 3.283 million, a US record (source: Department of Labor).  # 8, 3/30/20.
  1. YOUR LIFE – If you were born in 1987 and you turn age 33 in 2020, you have lived through 5 bear markets and 3 recessions, the 1987 “Black Monday” stock market crash, the 9/11 terrorist attacks, the 2008 global real estate crisis, and now the 2020 pandemic. You have also lived through 4 bull markets (including the 11-year bull that ended on 2/19/20), 4 economic expansions and you have benefited from the lowest interest rates in history.  Your life expectancy as of today: 47.3 additional years on earth (source: BTN Research).  # 3, 4/13/20.
  1. RAINING NOW – All 50 US states maintain a “rainy day” fund that may be accessed as a result of an economic emergency. As of 7/01/19, California had $19.2 billion set aside, Texas had $7.8 billion, New York had $2.5 billion while Illinois had just $4 million (source: National Association of State Budget Officers).  # 5, 4/20/20.
  1. JUST HERE FOR THE DAY – 48% of hospital revenue in 2018 came from outpatient procedures (source: Deloitte Center for Health Solutions). # 9, 5/11/20.
  1. ALL FOR EXACTLY THE SAME SERVICES – Private US health insurance pays on average $241 for health care services for every $100 that Medicare pays and for every $72 that Medicaid pays (source: RAND, Health Affairs). # 12, 5/25/20.
  1. OUT OF THIN AIR – From the end of 2008 to the end of 2010, the Fed “digitally created” $1.4 trillion of new money that was used to purchase Treasury bonds as part of its “Quantitative Easing” program. From Thursday 3/12/20 through Friday 6/12/20, the Fed “digitally created” $2.9 trillion of new money that was used to purchase Treasury bonds and corporate bonds (source: Federal Reserve).  # 5, 6/22/20.
  1. PRINTING TOO MUCH? – Some, but not all economists, feared that our “digital creation” of money in 2008-14 and again in 2020 could lead to hyperinflation, something that occurred in Germany in 1921-23, in Argentina in 1975-1990, and in Zimbabwe in 2007-09 (source: BTN Research). # 13, 6/29/20.
  1. YOU WANT A DISCOUNT? – The schools with the 4 largest college endowments in the United States – Harvard, University of Texas, Yale and Stanford – increased the cost of tuition for their undergraduates for the 2020-21 school year (source: MarketWatch). # 12, 9/14/20.
  1. BAYOU MISERY – 4 of the 10 tropical storms or hurricanes that made landfall in the USA in 2020 – Cristobal, Laura, Marco and Delta – made landfall in Louisiana. The 10 tropical storms or hurricanes to make US landfall broke the record of 9 set in 1916 or 104 years earlier (source: Insurance Information Institute).  # 14, 10/19/20.
  1. WE VOTED! – An estimated 159.8 million Americans voted in the 2020 presidential race, representing 66.8% of the 239.2 million “voting-eligible” Americans. The 159.8 million voters are an all-time US record and the 66.8% is the highest “percentage turnout” in 120 years (source: NBC News).  # 3, 11/09/20.
  1. ONE-PERCENTERS – To rank in the top 1% of US taxpayers for the 2018 tax year required adjusted gross income (AGI) of at least $540,009. That highly paid group received 21% of all AGI reported nationwide but they also paid 40% of the federal income tax that was collected (source: Internal Revenue Service).  # 6, 12/14/20.

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

Bill’s By The Number$

  1. ELECTION YEAR – The S&P 500 was up +15.4% YTD (total return) through Friday 12/11/20. Assuming the index finishes up for the year, the S&P 500 will have recorded a positive total return in 18 of the last 20 presidential election years.  The only “down election years” dating back to 1944 were in 2000 and 2008. 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. ALL WERE TOO LOW – A year ago (12/16/19), Barron’s published the year-end 2020 forecast for the S&P 500 made by 10 Wall Street strategists. The 10 predictions ranged from a low of 3000 to a high of 3500.  The index’s 12/31/19 actual close was 3231.  The S&P 500 closed last Friday 12/11/20 at 3663 (source: Barron’s).
  1. ALL WERE TOO HIGH – A year ago (12/16/19), Barron’s published the year-end 2020 forecast for the yield on the 10-year Treasury note made by 10 Wall Street strategists. The 10 predictions ranged from a low of 1.50% to a high of 2.20%.  The 10-year note’s actual yield close on 12/31/19 was 1.91%.  The yield on the 10-year Treasury note closed last Friday 12/11/20 at 0.90% (source: Barron’s).
  1. LATE IN THE YEAR – After closing at an all-time high on Tuesday 12/08/20, the S&P 500 is assured of achieving its calendar year high during the month of December in 6 of the last 8 years (source: BTN Research).
  1. THE FED – 4 of the 6 current members of the Federal Reserve’s Board of Governors were appointed during President Trump’s 4-years in office – Richard Clarida, Randal Quarles, Michelle Bowman and Christopher Waller. There remains 1 vacancy on the 7-member Board of Governors (source: Federal Reserve).
  1. ONE-PERCENTERS – To rank in the top 1% of US taxpayers for the 2018 tax year required adjusted gross income (AGI) of at least $540,009. That highly paid group received 21% of all AGI reported nationwide but they also paid 40% of the federal income tax that was collected (source: Internal Revenue Service).
  1. FIVE-PERCENTERS – To rank in the top 5% of US taxpayers for the 2018 tax year required adjusted gross income (AGI) of at least $217,913. This group received 36% of all AGI reported nationwide but they paid 60% of the federal income tax that was collected (source: IRS).
  1. TAXES – The top 3% of US taxpayers in tax year 2018 reported at least $286,106 of adjusted gross income (AGI) but paid 53% of all federal income tax. The 97% of taxpayers who reported less than $286,106 of AGI paid the remaining 47% of federal income tax that was collected in tax year 2018 (source: IRS).
  1. TAKE THE OTHER GUY’S MONEY – 67% of 3,477 Americans surveyed in early November 2020 believe that federal income taxes should be raised for any taxpayer making $400,000 or more (source: SurveyMonkey.com).
  1. GET OUT THE VOTE – Voter turnout increased in the November 2020 election when compared to voter turnout from November 2016 in 98% of the nation’s 3,142 counties (source: National Election Pool).
  1. COVID-19 DEATHS – Approximately 40% of the American death toll from COVID-19 as of Sunday 12/06/20 are elderly patients in long-term care facilities across the country (source: Dr. Moncef Slaoui, Operation Warp Speed top scientist).
  1. HELP FOR COLLEGE STUDENTS – The Department of Education announced on Friday 12/04/20 a second extension through 1/31/21 of the forbearance period on federal student loans. The forbearance plan, i.e., a pause in required principal and interest payments, began on 3/13/20 and was to expire on 9/30/20, but was extended on 8/21/20 through the end of this year.  92% of all student loans (by dollar) are federal loans, with the remaining 8% being loans that were originated by a private lender (source: Department of Education).
  1. WORSE DURING A PANDEMIC – In the 6 months following the 9/11/01 terrorist attacks on the US, the commercial airline industry in the United States suffered losses of $10.3 billion (stated in 2020 dollars). In the first 6 months of calendar year 2020, i.e., 1/01/20 through 6/30/20, the commercial airline industry in the United States suffered losses of $14.9 billion (source: USA Facts).
  1. IT HAS BEEN AWHILE – Congress has passed 4 separate bills providing $2.8 trillion of pandemic relief, but the last of the 4 bills (HR 6312) was signed into law on 4/24/20 or nearly 8 months ago (source: Congress).
  1. SAFE TO PLAY – The total rounds of golf played by Americans is projected to increase by 50 million rounds in 2020, the largest year-over-year growth in 23 years. In 1997, spurred on by the appeal of a then 21-year old Tiger Woods, the number of rounds increased by 63 million rounds (source: National Golf Foundation).

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Bill’s By The Number$

  1. GOOD NEWS HAS HELPED – In the 22 trading days following the 11/03/20 election through last Friday 12/04/20, the S&P 500 has gained +10.0% (total return) and set 7 all-time record closings. 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. THIRTY-YEARS – 2 of the 3 best months (by total return) for the S&P 500 over the last 30 years, i.e., the 360 months ending 11/30/20, occurred during the pandemic. April 2020 ranks # 1 (+12.82% gain) while November 2020 ranks # 3 (+10.95% gain).  December 1991 (+11.44% gain) was the # 2 best month (source: BTN Research).
  1. NOT A GREAT RETURN – An American male retiring at age 65 in 2020 who has earned the maximum taxable wage for Social Security taxes every year during his working career ($137,700 in 2020) is projected to have paid $741,000 (stated as a 2020 present value number) in lifetime Social Security taxes but is projected to receive just $533,000 (stated as a 2020 present value number) in lifetime benefits (source: Tax Policy Center).
  1. I NEED MY SPACE – 28% of the households in the United States in 2020 were made up of just 1 individual living alone. Another 35% of US households are comprised of just 2 people, of which 65% (of the 35%) are a married couple (source: Census Bureau).
  1. SMALL GUYS/GALS RULE – Small American businesses, defined as having less than 500 employees, are responsible for 44% of US economic activity (source: US Small Business Administration – Office of Advocacy).
  1. NOT GOING TO THE MALL – $1 out of every $6 spent on US retail sales (16.1%) during the 2nd quarter 2020 was transacted online (source: Census Bureau).
  1. SUPPLY AND DEMAND – On 4/09/20, OPEC and Russia agreed to a historic production cut of 10 million barrels a day. The price of West Texas Intermediate (WTI) crude oil had fallen to $22.76 a barrel as of 4/09/20 as the global impact of COVID-19 was crushing the worldwide demand for oil.  As of last Friday 12/04/20, WTI crude oil closed at $46.26 a barrel (source: NYMEX).
  1. OVER A YEAR – The number of US operating oil rigs (both on land and offshore) was 323 as of Friday 12/04/20, down 60% from 799 operating oil rigs as of Friday 12/06/19 (source: Baker Hughes).
  1. THEN AND NOW – Following the 2016 presidential election, the USA reported 5 million jobless Americans and a 4.7% unemployment rate as of 11/30/16. Following the 2020 presidential election, the United States reported 10.7 million jobless Americans and a 6.7% unemployment rate as of 11/30/20 (source: Department of Labor).
  1. THE FRIENDLIER SKIES4,592,989 passengers went through TSA screening at US airports on the Wednesday before Thanksgiving through the Sunday after Thanksgiving, i.e., 11/25/20 through and including 11/29/20. Exactly 8 months earlier, i.e., Wednesday 3/25/20 through Sunday 3/29/20, just 1,006,765 passengers went through TSA screening at US airports (source: TSA).
  1. START SAVING NOW – A child born in 2020 that begins kindergarten in the fall of 2025 would attend college between the years of 2038 and 2042. If that child attended an average public in-state 4-year college and if the annual price increases for public colleges that have occurred over the last 30 years (+5.0% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would be $231,779 or $57,945 per year (source: College Board).
  1. WAS PRIVATE, NOW PUBLIC – The cost of tuition, fees, room and board at an average public 4-year college for the current 2020-2021 school year is $22,180. The cost of tuition, fees, room and board at an average private 4-year college for the 2000-2001 school year, i.e., 20 years ago, was $22,240 (source: College Board).
  1. EVERY DAY – An estimated 10,800 Americans will turn 65 years old each day next year (2021), i.e., 1 every 8 seconds. This group represents the 11th year of 19 years of “Baby Boomers” turning age 65.  An estimated 11,500 Americans will turn 65 years old each day in the year 2029 (source: Government Accountability Office).
  1. NOT A BOOMERBill Clinton, our nation’s # 42 president, left office in January 2001 or 20 years ago next month. Clinton, age 74, is 4 years younger than 78-year old Joe Biden, our nation’s # 46 president who will take office on 1/20/21 (source: BTN Research).
  1. SIX GUYS BETTER THAN HIM? – LeBron James will be the 7th highest paid player in the NBA for the upcoming 2020-21 season, earning $39.21 million (source: ESPN).

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Bill’s By The Number$

  1. NOVEMBER TO REMEMBER – With 1 trading day remaining in November, the S&P 500 has gained +11.4% month-to-date (total return) through 11/27/20, a performance better than 99.7% of the last 360 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. DURING COVID-19 – From its 3/23/20 bear market low of $23.4 trillion, the total capitalization of the US stock market has climbed $16.4 trillion to $39.8 trillion as of the close of trading last Friday 11/27/20 (source: Wilshire).
  1. IS THIS YOU? – 62% of the average net worth of an American household comes from just 2 assets – the equity they have built up in their home and the value of their retirement accounts (source: Census Bureau).
  1. MONEY NOT USED – The 3/27/20 CARES Act included $454 billion given to the Treasury Department to provide a backstop on up to $4.5 trillion of Fed loans made to big businesses. On 11/19/20 Treasury Secretary Steven Mnuchin reported that only $25 billion of the $454 billion had been used by the Fed in making loans and that the unused $429 billion should be returned to the Treasury Department.  Mnuchin recommended that 5 emergency lending facilities that opened in March 2020 should be shut down as of 12/31/20, although he did concede that the 5 programs could be reopened in the future if needed (source: CARES Act, Treasury Department).
  1. ANOTHER FIRST FOR JANET – President-elect Joe Biden has selected Janet Yellen to be Treasury Secretary. Yellen, the first female to be Fed Chair (2014-2018) in its 107-year history, would become the first female to lead the Treasury Department in its 231-year history (source: Treasury Department).
  1. NOT YET – 5 of 8 Americans surveyed (62%) in late October 2020 describe their life as “not yet back to normal” in the year of the COVID-19 pandemic (source: Gallup).
  1. EXPIRES SOON – The US government extended federal unemployment benefits to as long as 99 weeks in some high-jobless states as a result of the 2007-2009 Great Depression. The 99 weeks kicked in after state jobless benefits were exhausted, with the state benefits typically paid over as much as 6 months (26 weeks).  During the 2020 pandemic, the federal government has so far approved federal unemployment benefits (called “Pandemic Emergency Unemployment Compensation”) of just 13 weeks (source: Department of Labor).
  1. A MENU TO PICK FROM – Americans purchasing their 2021 health insurance through state exchanges established under the 2010 Affordable Care Act (ACA) will pick from health insurance plans offered by an average of 5 insurers. Delaware residents have just a single insurer operating in the Blue Hen state while Wisconsin residents will select policies offered from 13 different insurers (source: Kaiser Family Foundation).
  1. LESS TAXES$250,000 of taxable income on a joint return in 2020 creates $48,159 of federal income tax. $250,000 of taxable income on a joint return in 2010 created $60,281 of federal income tax (source: IRS).
  1. HONEST? – The government projects that an average US taxpayer pays 84% of his/her total federal income tax bill (mostly driven by unreported income), creating an estimated $441 billion annual “tax gap,” i.e., the difference between what all taxpayers should have paid compared to what they actually paid (source: IRS).
  1. SLOWING DOWN – Student loan debt was $1.55 trillion as of 9/30/20, but the total has increased just +3.3% over the last 12 months. Over the last 5 years, i.e., 9/30/15 to 9/30/20, student loan debt has increased +29.2% (from $1.20 trillion to $1.55 trillion), an average increase of +5.3% per year (source: Federal Reserve Bank of New York).
  1. CHEAP GAS – The average price of gasoline was $2.12 a gallon as of last Friday 11/27/20. The average price of gasoline hasn’t closed a calendar year that low since finishing 2015 at $2.00 a gallon (source: AAA).
  1. NOT A SECOND TIME – There have been just 3 US presidents in the last 75 years who were elected to a first term in office but then failed to win their re-election bid for a 2nd term – Jimmy Carter in November 1980, George H.W. Bush in November 1992 and Donald Trump in November 2020 (source: BTN Research).
  1. THE SAME SCORE – Donald Trump beat Hillary Clinton 306-232 in the Electoral College in 2016, but then lost to Joe Biden 306-232 in the Electoral College in 2020 (source: Electoral College).
  1. HE STILL DIDN’T WIN – The 84th Masters golf tournament was postponed this year from its regular April time slot until mid-November due to the pandemic. Cameron Smith of Australia tied for 2nd in 2020 (5 shots behind winner Dustin Johnson) but became the first golfer in Masters history to shoot all 4 rounds in the 60s.  A total of 4,306 golfers have played in the Masters golf tournament going back to 1934 (source: Masters).

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

Bill’s By The Number$

  1. FREQUENTLY – Between the 11/08/16 presidential election and the 11/03/20 presidential election, the S&P 500 set 133 record closing highs over 1,003 trading days. That’s equal to a new record closing high occurring once every 1 ½ weeks.  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. HISTORICALLY LOW – The yield on the 10-year Treasury note closed last Friday 11/20/20 at 0.83%, its 170th consecutive trading day of closing below 1%, i.e., occurring every trading day since 3/19/20. The yield on the 10-year note dropped below 1% for the first time ever on 3/03/20.  10-year notes have been traded in the USA since 1790, i.e., 230 years of trading (source: Treasury Department).
  1. USE TIME TO YOUR ADVANTAGE – $522 invested at the beginning of every month for 40 years earning 6% per year will accumulate to $1 million. $1,021 invested at the beginning of every month for 30 years earning 6% per year will accumulate to $1 million.  The calculations ignore the impact of taxes and are for illustrative purposes only and are not intended to reflect any specific investment alternative (source: BTN Research).
  1. MOST ARE CURRENT1 in 13 home mortgages nationwide (7.65%) were at least 1 monthly payment delinquent as of 9/30/20. Just 1 in 25 home mortgages nationwide (3.97%) were at least 1 monthly payment delinquent as of 9/30/19 or a year earlier (source: Mortgage Bankers Association).
  1. DURING A PANDEMIC – The median sales price of existing homes sold in the United States was $313,000 in October 2020, an all-time record both on a nominal basis (i.e., not adjusted for inflation) and on an inflation-adjusted basis (source: National Association of Realtors).
  1. HARDER TO FIND A JOB – As of 10/31/20, 3.56 million Americans have been unemployed at least 27 weeks (just over 6 months), 32% of the 11.06 million Americans who were jobless as of that date. As of 1/31/20 (before the pandemic), 1.17 million Americans had been unemployed at least 27 weeks, 20% of the 5.89 million Americans who were jobless at the end of January earlier this year (source: Department of Labor).
  1. WHY GO? – 43% of “recent” college graduates with jobs (under the age of 28) surveyed in September 2020 are working in jobs that typically do not require a college degree (source: Federal Reserve Bank of New York).
  1. RAISE TUITION OR CUT EXPENSES? – 30% of American colleges, including both public institutions and private schools, are running a deficit during their current fiscal year (source: Moody’s Investors Service).
  1. PEOPLE ARE SPENDING AGAINRetail sales in the United States were down on a “month-over-month” basis for 3 consecutive months, i.e., February 2020 through April 2020) but have rebounded and have increased on a “month-over-month” basis for the last 6 months, i.e., May 2020 through October 2020 (source: Census Bureau).
  1. JUST ONE MONTH – The budget deficit for the US government for the first month of fiscal year 2021, i.e., October 2020, was $284 billion. As recently as fiscal year 2007, the budget deficit for the entire fiscal year was $161 billion or a smaller deficit than October’s deficit (source: Treasury Department).
  1. BLOCK THIS CALLER – Only 6% of people answer their landline or mobile phone when contacted by a firm conducting a telephone survey, compared to 36% in 1997 (source: Pew Research Center).
  1. YOU HAVE TO WEAR A MASK – The updated ventilation technology used on commercial aircrafts in 2020, including the frequent exchange of air and “high efficiency particulate air” (HEPA) filters, removes from the airplane’s cabin over 99% of the airborne particles that could contain the virus that causes COVID-19 (source: Harvard T.H. Chan School of Public Health).
  1. THE REACH OF COVID – As of Friday 11/20/20, 3.6% of Americans have been infected with COVID-19, i.e., 11.8 million infected individuals out of our 330.6 million population, or 1 out of every 28 Americans (source: NBC News, Census Bureau).
  1. LONG DIVORCE – The United Kingdom voted on 6/23/16 (52% to 48%) to leave the 28-nation European Union, i.e., the vote took place 4 ½ years ago. That decision will be fully implemented on 12/31/20 when the “transition period” ends as defined in the “withdrawal agreement” (source: BBC News).
  1. SHE MAKES THE BIG CALLS – 52-year old Kim Ng was named on 11/13/20 as the general manager of MLB’s Miami Marlins. Ng is the first female GM in MLB’s 145-year history (source: MLB).

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Bill’s By The Number$

  1. STOCKS AND THE WHITE HOUSE – Based upon performance data from 1936-2019, the S&P 500 has averaged +6.7% per year (total return) during the 1st year of a 4-year presidential term. Next year (2021) will be year # 1 of a 1st-term Biden administration.  The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).
  1. A RECORD CLOSE13 days after the 11/08/16 election, the S&P 500 set an all-time record closing high on 11/21/16. 10 days after the 11/03/20 election, the S&P 500 set an all-time record closing high on 11/13/20 (source: BTN Research).
  1. MORE BONDS THAN STOCKS – As of 6/30/20, the US stock market was $33 trillion in size. As of 6/30/20, the US bond market was $50 trillion in size (source: Wilshire, SIFMA).
  1. BULLS – 56% of investors surveyed as of 11/11/20 are “bullish” on US stocks for the upcoming 6 months, the highest percentage recorded in this weekly survey since 1/03/18 (source: Amer. Assoc. of Individual Investors).
  1. WIND AT THEIR BACK – Every US president since 1993 – Clinton, Bush, Obama and Trump – began his first year in the White House with total control of Congress, i.e., Presidents Clinton and Obama began with Democrats controlling both the House and the Senate, and Presidents Bush and Trump began with Republicans controlling both the House and the Senate (source: Congress).
  1. DELAYED – The split in the Senate is 50-48 favoring the Republicans with the remaining 2 seats to be determined on 1/05/21 in 2 Georgia runoffs. Republicans are the incumbents in both races.  In the event of a 50-50 split on any Senate vote, the Vice President would cast the tie-breaking vote on that legislation (source: Congress).
  1. MANY CAN’T WAIT – An American worker may begin receiving a monthly Social Security retirement benefit as early as age 62, albeit at a reduced level from what is available at one’s “full retirement age.” Just under 50% of American “blue-collar” workers take their retirement benefits at age 62, while only 38% of “white-collar” workers begin their retirement benefits early (source: Center for Financial Security, December 2019).
  1. POTUSPresident-elect Joe Biden turns 78 years old on Friday 11/20/20. Biden was first elected to the Senate from Delaware in 1972 (just before he turned age 30), eventually serving 36 years in that role.  Just 41 days after his 1972 Senate victory, his wife and infant daughter were killed in a car accident (source: CBS News).
  1. VIRUS – President-elect Biden has proposed the creation of a Public Health Jobs Corps. The government agency would employ at least 100,000 Americans to perform roles in combating the COVID-19 virus (source: NBC News).
  1. NOT COMING BACK – In the 6 months from 2/29/20 to 8/31/20, 163,735 US businesses have closed their doors, including 97,966 businesses (60%) that are likely closed for good (Source: Yelp Economic Average).
  1. PRETTY GOOD – 95% of apartment households nationwide had paid their November rent as of 10/27/20 (source: National Multifamily Housing Council Rent Payment Tracker).
  1. CALM BEFORE THE STORM?46,570 homes have been foreclosed on by lenders nationwide YTD through 10/31/20. That’s down from the 143,955 foreclosures in calendar year 2019 and 230,305 foreclosures in calendar year 2018 (source: Attom Data Solutions).
  1. MORE FOR BIDENPresident-elect Biden was leading President Trump in the national popular vote in the race for the White House by 4 million votes as of 6pm ET on Friday 11/13/20, i.e., 78.1 million votes to 72.7 million votes. Biden was also leading in the California popular vote in the race for the White House by 4.9 million votes as of 6pm ET on Friday 11/13/20, i.e., 10.4 million votes to 5.5 million votes (source: New York Times).
  1. WOULD YOU? – A joint venture between a US pharmaceutical company and a German biotech company has produced a COVID-19 vaccine that is believed to be 90% effective. That conclusion was based on a “phase 3” clinical trial that included 43,538 participants, of which just 94 individuals have developed the COVID-19 virus.  The US government has a contract with the joint venture for 100 million doses of the vaccine when it’s ready, along with an option to purchase an additional 500 million doses.  The vaccine is administered in 2 doses given 3 weeks apart.  The US population of 331 million would require 662 million doses (source: Financial Times).
  1. NO HELMET – 58 of 368 FBS college football games scheduled this season through 11/08/20 (16% of all games) were postponed or cancelled due to the COVID-19 virus (source: Associated Press, Ralph D. Russo).

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Bill’s By The Number$

  1. AFTER TEN MONTHS – With just 2 months to go in calendar year 2020, the S&P 500 is up +2.8% YTD (total return) as of the close of trading on Friday 10/30/20. Over the last 30 years (1990-2019), November and December have ranked as the # 1 and # 3 “best months” for the S&P 500.  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. BONDS BEAT STOCKS? – The bond market was up +6.4% YTD (total return) through last Thursday 10/29/20. Bonds have beaten the performance of stocks (using the S&P 500) in 2 of the last 10 years (2011 and 2018).  The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).
  1. OWNERS AND RENTERS – The 126.7 million households in the United States as of 9/30/20 were split 67/33 between 85.4 million owners and 41.3 million renters (source: Census Bureau).
  1. BEST EVER – The US economy rose a record +33.1% in the 3rd quarter 2020, i.e., quarter-over-quarter change expressed as an annualized result. In reality, the economy as of 9/30/20 is only +7.41% larger than the size of the economy as of 6/30/20 after removing the impact of inflation.  A +7.41% gain occurring for 4 consecutive quarters, i.e., (1.0741) ^ 4 = 1.331, equals a +33.1% annualized advance (source: Department of Commerce).
  1. BAD, BUT NOT THAT BAD – The 3/27/20 CARES Act included $139 billion of relief for the 50 US states. From 2/29/20 to 8/31/20, the tax revenue collected by all US states is down $30 billion over the same 6-month period from a year earlier.  When the CARES Act was being debated in Congress, US governors requested financial support of $500 billion from lawmakers (source: National Governors Association).
  1. RENTING IN THE BIG APPLE – As of 9/01/20, the median rent of apartments in Manhattan (NY), was down 11% on a year-over-year basis. The median rent of Manhattan studio apartments is down 17% year-over-year (source: Miller Samuel Inc. and Douglas Elliman Real Estate).
  1. MORE NOVACANE PLEASE – Americans are projected to spend 38% less at the dentist in 2020 than they did in 2019 (source: American Dental Association).
  1. THE MOST PAID – The maximum Social Security benefit paid to a worker retiring at full retirement age in 2021 is $3,148 per month, more than double the $1,536 per month maximum benefit paid 20 years earlier in 2001 (source: Social Security).
  1. PURE MICHIGAN – The $18 billion of municipal bonds that the city of Detroit defaulted on in 2013 is the largest municipal bond default in US history (source: Federal Reserve Bank of St. Louis).
  1. A LOT LESS RISKY – In the 10 years prior to February 2020, only 5% of municipal bonds offerings (measured by dollar) included insurance coverage purchased by the borrower, i.e., insurance that would make municipal bonds investors whole in the event of a default by the municipality (source: Municipal Market Analytics).
  1. WORK FROM HOME – 65% of Americans surveyed in late June 2020 have internet capabilities that are fast enough to support workable video conferencing (source: Stanford Institute for Economic Policy Research).
  1. THE ONLY GAME THEY PLAY – The breakeven price of oil for Saudi Arabia in 2020 is $78 a barrel. 80% of the total government revenues in Saudi Arabia come from the sale of oil.  The price of oil closed at $35.79 a barrel (West Texas Intermediate) on Friday 10/30/20 (source: Statista).
  1. BUCKEYES KNOW – The state of Ohio has correctly backed the winner of the US presidential election in each of the last 14 races for the White House, i.e., 1964-2016 (source: USConstitution.net).
  1. WHOOPS – On the day of the 11/08/16 election, the political website “FiveThirtyEight” projected a 71.4% chance that Hillary Clinton would win the 2016 presidential election with 302 Electoral College votes, 70 votes more than she ultimately received (source: fivethirtyeight.com).
  1. THEY DO GET A FREE EDUCATION – If Alabama was to pay Head Coach Nick Saban $2.37 million in an annual salary and pay every one of the 126 players on the Alabama football roster $55,000, they would be out-of-pocket the same $9.3 million they currently pay Saban and $0 they pay to the 126 players. $2.37 million is the cutoff to rank in the top one-tenth of 1% of all US taxpayers.  $55,000 is the cutoff to rank in the top 40% of all US taxpayers (source: University of Alabama, IRS).

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

Bill’s By The Number$

  1. HIGHS AND LOWS – The S&P 500 is up +8.9% YTD (total return) through Friday 10/23/20. The index has had a 8% bear market loss (total return) and a +56.5% bull market gain (total return) during the year.  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. WAY UP – During fiscal year 2019, US government outlays for “Income Security,” a category that includes federal unemployment benefits and the nation’s “food stamps” program, were equal to 49% of the outlays made for Social Security benefits. During fiscal year 2020, US government outlays for “Income Security” were equal to 115% of the outlays made for Social Security benefits (source: Treasury Department).
  1. JUST FIVE SURPLUS YEARS – The budget deficit for the United States in fiscal year 2020 (i.e., the 12 months that ended 9/30/20) was $3.1 trillion. The United States has run a budget deficit in 55 of the last 60 fiscal years, i.e., 1961-2020.  The only surplus years were 1969, 1998, 1999, 2000 and 2001 (source: Treasury Department).
  1. BACK IN TIME – The cover story for Time Magazine on 3/05/84 was “That Monster Deficit, America’s Economic Black Hole.” The article, written by Charles Alexander, chronicled how the nation’s 1984 budget deficit threatened to derail the country’s economic recovery.  The fiscal year 1984 budget deficit was $185 billion, or 6% of the size of the fiscal year 2020 deficit that reached a record $3.132 trillion (source: Time Magazine).
  1. NO BOSS – 20% of American workers between the ages of 18-49 are self-employed. 46% of American workers between the ages of 65-69 are self-employed (source: National Bureau of Economic Research, September 2019).
  1. DOUBLE IN THIRTY YEARS – It would take $1,961 in September 2020 to have the same purchasing power as $1,000 in September 1990 (source: CPI Inflation Calculator, Bureau of Labor Statistics).
  1. WOOD – The price of lumber increased nearly 50% from 4/30/20 to 8/31/20, the largest 4-month increase ever in the cost of lumber based upon data maintained since 1949 (source: Bureau of Labor Statistics).
  1. NOT ALL INCOME – The maximum taxable wage base subject to the social security payroll tax will be $142,800 in calendar year 2021. An estimated 5% of earnings of all US workers will be subject to the social security payroll tax next year, a levy that is 6.2% for employees and 6.2% for employers (source: 2020 Trustees Report).
  1. WAS IT WORTH IT? – 56% of the $1.54 trillion of student loan debt in the United States is held by individuals with graduate degrees, i.e., beyond a bachelor’s degree (source: Federal Reserve, 2019 data).
  1. MAKING MONEY IN OIL – The price of oil (West Texas Intermediate) closed at $39.85 a barrel on 10/23/20. The breakeven price for oil produced in the Permian Basin is estimated to be $50 a barrel.  The last time oil closed above $50 a barrel was on 2/24/20 or 8 months ago.  The Permian Basin is a 90,000 square mile stretch of land from West Texas to New Mexico (source: Federal Reserve Bank of Dallas).
  1. KIDS COST MONEY – The United States had 3.79 million births in 2018, the latest calendar year for which data has been released. On 6/15/20, the Brookings Institute forecasted that the COVID-19 virus and subsequent US recession will result in a drop of births in 2021 by 300,000 to as much as 500,000 (source: Brookings Institute).
  1. SLIPPING – From 1978 to 2013, the United Kingdom’s credit rating was Aaa by Moody’s, its top ranking. On 2/22/13, the UK was downgraded to Aa1.  On 9/22/17, the UK was again downgraded to Aa2.  Just 10 days ago (on 10/16/20), the UK was downgraded to Aa3.  As of today, there are just 12 countries in the world that have a top Aaa rating from Moody’s, including the United States (source: Moody’s).
  1. BABY IT’S COLD OUTSIDE – The Canadian government extended its closure agreement with its US border on 10/19/20 for an additional month to 11/21/20. The ban originally became effective on 3/21/20.  It prevents any non-essential vehicle travel across the US/Canadian border.  The estimated 300,000 Canadian “snowbirds” that come south for the winter will be forced to fly into the US instead of driving a car or an RV across the border (source: National Post).
  1. OF COURSE HE ISJeff Bezos, the founder of Amazon and the world’s richest person (worth $189 billion as of Friday 10/23/20) was Time Magazine’s “Person of the Year” in 1999. Time Magazine’s 12/27/99 cover story declared “E-commerce is changing the way the world shops” (source: Time).
  1. WINNER TAKE ALL – MLB’s American League Championship Series and the National League Championship Series both went 7 games in 2020, the first time that has happened since 2004 (source: MLB).

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

Bill’s By The Number$

1. NOT ALL ARE COUNTED THE SAME – As of the close of stock trading on Friday 10/16/20, just 10 stocks in the S&P 500 index, i.e., just 2% of the index’s stocks, are responsible for 28% of the index’s 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).

2. WHAT’S LEFT THIS YEAR – With 11 weeks remaining in calendar year 2020, the S&P 500 is up +9.4% YTD (total return) through Friday 10/16/20. The S&P 500 has gained an average of +10.6% per year (total return) over the last 50 years (i.e., 1970-2019). Over the last half-century, the S&P 500 has been up during 40 of the last 50 years, i.e., 80% of the time (source: BTN Research).

3. BELOW ONE – The last time the yield on the 10-year Treasury note was above 1% was on 3/19/20 or 7 months ago today. The 10-year note yield closed at 0.74% last Friday 10/16/20 (source: Treasury Department).

4. FUTURE TAXPAYERS – The nation’s “general fertility rate,” defined as the number of births per 1,000 women between the ages of 15-44, was just 58.3 births in 2019, a record low rate for birth data that has been tracked nationally since 1909 or for the last 111 years (source: National Center for Health Statistics).

5. PRINT AND PURCHASE – The Fed’s balance sheet reached $6.5 trillion as of 10/14/20, up from $3.9 trillion as of 3/11/20, largely the result of purchases of Treasuries and corporate bonds (source: Federal Reserve).

6. MORE THAN TWICE AS LARGE – The US government had a record $3.13 trillion deficit during fiscal year 2020, i.e., the 12 months ending 9/30/20, smashing the previous record deficit of $1.41 trillion set 11 years ago during fiscal year 2009. The deficit was the difference between $3.42 trillion of tax receipts and $6.55 trillion of outlays (source: Treasury Department).

7. HALF-AND-HALF – The United States government has maintained financial records since 1789, i.e., for the last 231 years. As of 9/30/10, the US had reached a national debt of $13.56 trillion. As of 10/15/20, the US had amassed a national debt of $27.14 trillion. Thus, the US government has accumulated more debt in the last 10 years ($13.58 trillion) than it had in its first 221 years ($13.56 trillion) (source: Treasury Department).

8. AT THE MARGIN – The top marginal tax rate used in the payment of federal income taxes in 2020 is 37%. The top marginal tax rate was 70% in 1979, 77% in 1969 and 91% in 1963 (source: Internal Revenue Service).

9. SOCIALLY DISTANCING – Americans sold 745,000 existing homes in April and May this year as the country reacted to a pandemic-driven shutdown. That’s off 25% from the 998,000 existing homes sold in April and May 2019 (source: National Association of Realtors).

10. LITTLE SHORT OF CASH – 17.1 million US households were behind on their monthly rental payment or their monthly mortgage payment as of 9/28/20. That’s 13.5% of the 126.8 million households in the country (source: Census Bureau).

11. IT’S ABOUT TIME – Americans have reduced their outstanding balances on their revolving debt, e.g., credit card debt and home equity loans, for 6 months in a row, i.e., March 2020 through and including August 2020 (source: Federal Reserve).

12. WE NEED ONE OF EACH – There are 213 vaccines and 319 treatments for the COVID-19 pandemic in the development stage as of Friday 10/16/20. None of the test vaccines or treatments has yet to receive FDA approval (source: Milken Institute).

13. WHO’S RIGHT? – As of Friday 10/16/20, 39.2 million people worldwide have been infected with the COVID-19 virus, or ½ of 1% of the globe’s 7.7 billion population. However, the World Health Organization reported on 10/05/20 that its “best estimates” show that 1 in 10 people globally have been infected or 20 times the reported number (source: Johns Hopkins Coronavirus Resource Center, Dr. Michael Ryan, WHO).

14. BAYOU MISERY – 4 of the 10 tropical storms or hurricanes that made landfall in the United States in 2020 – Cristobal, Laura, Marco and Delta – made landfall in Louisiana. The 10 tropical storms or hurricanes to make US landfall broke the record of 9 set in 1916 or 104 years earlier (source: Insurance Information Institute).

15. HOOPS – The NBA’s 74th regular season began on 10/22/19. As a result of the pandemic, the NBA finals were not concluded until Sunday 10/11/20 or 355 days later. The Lakers beat the Heat in 6 games, the 4th NBA title for LeBron James. Bill Russell won 11 titles in a 13-year career with the Boston Celtics (source: NBA).

 

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