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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: November 30th, 2020 | 0 Comments

  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).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: November 23rd, 2020 | 0 Comments

  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 CURRENT - 1 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 AGAIN - Retail 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).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: November 16th, 2020 | 0 Comments

  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 CLOSE - 13 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. POTUS - President-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).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: November 9th, 2020 | 0 Comments

  1. NEXT POTUS - Joe Biden, the presumptive winner of last week’s election, is to take office on 1/20/21 as our nation’s # 46 president. Biden’s economic plan for the next 10 years (2021-2030) that was released during the campaign calls for $7.3 trillion of spending that would be paid for with $4.1 trillion of new taxes and $3.2 trillion of new government debt (source: Moody’s Analytics).
  1. LOTS OF PROMISES – Joe Biden’s proposed $7.3 trillion of new spending over the next decade (2021-2030) includes $2.4 trillion on infrastructure, $1.9 trillion on education, and $1.5 trillion on both social welfare programs and healthcare (source: Moody’s Analytics).
  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).
  1. LAST FOUR YEARS - From 11/08/16 to 11/03/20, i.e., the 4-years from the 2016 presidential election to the 2020 presidential election, the S&P 500 was up +70.3% (total return) or +14.2% per 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. A MUCH SLOWER SPEED - The “velocity of money” in the United States was 1.104 in the 2nd quarter 2020, the lowest ever recorded in our country. The highest “velocity of money” level in US history was 2.198 in the 3rd quarter 1997.  “Velocity of money” measures the rate that money is exchanged in our economy for goods and services.  The rate has largely fallen for the last 14 years as more Americans have paid off debt or accumulated cash instead of spending money (source: Federal Reserve Bank of St. Louis).
  1. DOWN, BUT GETTING BETTER - From a February 2020 peak of 158.8 million jobs nationwide, the United States is down 9.0 million jobs to 149.8 million workers as of the end of October 2020 (source: Department of Labor).
  1. NO TO DOCTORS - Total health care spending in the USA in 2020 is forecasted to be 3.3% to as much as 8.8% less than what had been projected for 2020 before the pandemic began (source: Willis Towers Watson).
  1. JUST NOT SOLVING THIS PROBLEM - As of 9am ET on Friday 11/06/20, 6,735 Americans had died from the COVID-19 virus over the previous 7-day period. That’s the largest number of weekly deaths as of Friday morning each week since 7,093 deaths occurred in the 7-day period ending at 9am ET on Friday 8/21/20 or about 2 ½ months earlier (source: NBC News, Meet the Press: First Read).
  1. WHO SHOULD WE TRUST? - There are 214 vaccines for the COVID-19 virus that are in the development stage as of Friday 11/06/20, none of which have been approved by the FDA. 5 US states – New York, Washington, Oregon, Nevada and California – have announced plans to assemble their own scientific review panels to analyze any future decisions made by the FDA (source: Time Magazine).
  1. WE WERE IN A WAR THEN - The US budget deficit for fiscal year 2020, i.e., the 12 months ending 9/30/20, was $3.1 trillion or 15.2% of the size of the US economy. That’s the largest “debt-to-GDP” ratio since the measurement reached 21.0% in 1945 or 75 years ago (source: Office of Management and Budget).
  1. BETTER THAN EUROPE - The International Monetary Fund forecasted on 10/13/20 that the 39 “advanced economies” in the world (out of 195 countries worldwide) would contract by 5.8% during 2020. The United States is projected to contract by 4.3% while the 19 economies in the Eurozone will shrink by 8.3% (source: IMF).
  1. TAXES - To take deductions on Form 1040, a taxpayer can use the “standard deduction” or the taxpayer can “itemize deductions” if the latter is greater than the former. The “standard deduction” will be $25,100 for married couples filing jointly and $12,550 for individuals in 2021.  Please consult a tax expert for details (source: IRS).
  1. THEY ARE NOT CAPITALISTS - The Chinese government has owned between 25% to 28% of the entire Chinese economy over each of the last 20 years (source: Gavekal Research).
  1. STILL ABLAZE - The Cameron Peak Fire in Colorado began on 8/13/20 and was still burning as of last Friday 11/06/20 or 85 days later. It is 92% contained and has burned 209,000 acres (source: InciWeb).
  1. WHAT IF THEY WERE GOOD? - Steve Cohen’s purchase of the New York Mets for $2.475 billion was approved by MLB on 10/30/20. That’s the most money paid for a US sports franchise in history, exceeding the $2.2 billion paid by David Tepper for the Carolina Panthers in 2018 (source: MLB).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: November 2nd, 2020 | 0 Comments

  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).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: October 26th, 2020 | 0 Comments

  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 IS - Jeff 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).

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

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Bill’s By The Number$

Posted by:Kim Vo | Posted on: October 19th, 2020 | 0 Comments

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).  

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: October 12th, 2020 | 0 Comments

  1. WHAT A DAY! - 12 years ago tomorrow (on Monday 10/13/08), the single-best trading day for the S&P 500 in the last 70 years (since 1950) took place – a gain of +11.6% in just 1 trading day. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock's weight in the index proportionate to its value (source: BTN Research).
  1. PEAK - The highest close for the S&P 500 so far this year (3581) was on 9/02/20. The highest close for the index has occurred in September or December in 7 of the last 8 years, i.e., 2012-2019 (source: BTN Research).
  1. PREDICTING IS HARD - 3 years ago (9/20/17), the Federal Reserve released a forecast for the end of 2020 for its key short-term interest rate and for our country’s unemployment rate. Their predictions: The Fed funds rate would be 2.9% and our jobless rate would be 4.2%.  The actual numbers as of today: The Fed funds rate is 0% to 0.25% and our jobless rate is 7.9% (source: Federal Reserve).
  1. CAN’T SPEND WHAT WE DON’T HAVE - “Personal income” in the United States, i.e., all pre-tax income created from employment and investments, declined 2.7% on a month-over-month basis from July 2020 to August 2020, its 4th down month in the last 6 months. “Personal income” had declined on a month-over-month basis only 5 times in the previous decade, i.e., 5 times in the previous 120 months (source: Department of Commerce).
  1. CUTOFFS FOR AGI - For tax year 2017, the latest tax year that the IRS has released data, 143,295,160 tax returns were filed. 98% of the 143.3 million returns reported adjusted gross income less than $339,478.  99% of the 143.3 million returns reported adjusted gross income less than $515,371 (source: Internal Revenue Service).
  1. HEALTH INSURANCE – For workers that access their health insurance through an employer, the average annual cost for health insurance coverage for a family plan in 2020 is $20,514, with the employer paying 67% of the total ($13,717) and the employee paying 33% ($6,797) (source: US Bureau of Labor Statistics).
  1. WANT TO LIVE FOREVER? - Healthcare spending per person in the USA in 2018 was +92% greater than the average health care spending per person in 9 major countries. US spending of $10,637 per person, including hospital care, prescription drugs, long-term care and preventative care, nearly doubled the $5,527 per person spending average compiled from Austria, Belgium, Canada, France, Germany, the Netherlands, Sweden, Switzerland and the UK (source: OECD Health Statistics).
  1. LESS FROM CHINA - The US imported $452 billion of goods from China in 2019. Through the first half of 2020, the US had imported $181 billion of goods from China (source: Department of Commerce).
  1. PAY THE PIPER - The moratorium imposed by the state of New York on commercial foreclosures and evictions ends in 8 days on Tuesday 10/20/20. Tenants and borrowers may face financial obligations that may have been accumulating since March 2020 (source: Thomas P. DiNapoli, New York State Comptroller).
  1. NO INFLATION - Inflation in the Eurozone fell 0.3% on a month-over-month basis in September 2020, after falling 2% in August 2020, i.e., deflation has taken place in the last 2 months. The Eurozone, which began in 1999, has never had an entire calendar year that experienced deflation.  The last calendar year in which the US recorded deflation was 1954 (source: Eurostat, Bureau of Labor Statistics).
  1. CASHING IN - The median sales price of an existing home sold in the United States in August 2020 ($310,600) is the highest ever recorded and is up +11% in the last 12 months (source: National Association of Realtors).
  1. INCLUDE A GREAT BIG HOME OFFICE - 273,100 single family homes began construction nationwide in the last 3 months (June-July-August), the largest trailing 3-month total since August 2007 (source: Census Bureau).
  1. I’M LEAVING ON A (PRIVATE) JET PLANE - The California Legislature is debating a bill introduced on 7/27/20 that would retroactively (to January 2020) raise the state’s top marginal tax rate from 13.3% up to 14.3% at taxable income levels above $1 million, up to 16.3% on taxable income above $2 million and up to 16.8% on taxable income above $5 million. The tax increase would impact the estimated ½ of 1% of California taxpayers who currently pay 40% of the income tax revenue collected within the state (source: Assembly Bill 1253).
  1. FAMILY MONEY – Jeff Bezos is ranked # 1 as the richest person in the world (worth $188 billion as of 10/08/20), but the 7 living heirs of Sam Walton (he died in 1992) are worth $239 billion (source: Forbes).
  1. THEY GOT HOT - The Louis Cardinals beat the Detroit Tigers in the 2006 World Series but had the worst regular season record (83-78) for a World Series champion in baseball’s 145-year history (source: MLB).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: October 5th, 2020 | 0 Comments

  1. STOCKS AND THE WHITE HOUSE - Based upon performance data from 1936-2019, the S&P 500 has averaged +6.7% per year (total return) during the 1st year of a 4-year presidential term, +8.7% per year during the 2nd year, +18.5% per year during the 3rd year, and +9.4% per year during the 4th year. Next year (2021) will be year # 1 of a 2nd-term Trump administration or year # 1 of a 1st-term Biden administration.  The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
  1. BIG NUMBERS - The NASDAQ Composite is up +25.3% YTD (total return) through the close of trading on 9/30/20. The NASDAQ Composite has gained at least +20% in 4 of the last 11 years, i.e., 2009-2019.  The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: NASDAQ).
  1. REALLY GOOD AND REALLY BAD - As of the close of stock trading on Wednesday 9/30/20, 13 individual stocks within the S&P 500 were up at least +50% YTD while 34 individual stocks were down at least 50% YTD. The return measurement was based upon the change of the individual stock price over a 9-month period and does not include any reinvestment of dividends (source: BTN Research).
  1. GLOOMY - 51% of 1,154 Americans surveyed in early September 2020 fear that the US stock market will decline at least 20% over the upcoming 6 months (source: SimplyWise Retirement Confidence Index).
  1. BONDS - The taxable bond market was up +6.8% YTD (total return) through 9/30/20. The bond market has averaged a gain of +7.5% per year (total return) over the last 40 years, i.e., 1980-2019.  The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).
  1. BEING CAREFUL - Since the beginning of 2020, the size of the money market fund industry in the USA (both taxable and tax-free) has grown from $3.63 trillion as of 1/01/20 to $4.40 trillion as 9/30/20, a YTD increase of $770 billion or $20 billion a week (source: Investment Company Institute).
  1. MAYBE NEVER - 31% of 1,018 American workers surveyed in January 2020 anticipate that they will retire at age 70 or later (source: Employee Benefit Research Institute - 2020 Retirement Confidence Survey).
  1. SIMPLER - As a result of the expansion in the size of the standard deduction that was part of the “2017 Tax Cuts and Jobs Act,” only 10% of tax filers itemized in 2018, down from 30% in 2017 (source: Tax Foundation).
  1. WHERE IT COMES FROM - Even though crude oil is produced in 32 US states, just 2 states (North Dakota and Texas) are responsible for 52% of the nation’s crude oil production (source: Energy Information Administration).
  1. BETTER THAN EXPECTED - There are an estimated 7 million college students (both undergraduates and graduate students) attending college for the school year that began in the fall of 2020. Unexpectedly, that total is down just 2% from the prior school year (source: National Center for Education Statistics).
  1. WHAT STATE IS NEXT? - The highest marginal tax rate for state income taxes in New Jersey in 2019 was 75%, effective at taxable income levels above $5 million. On 9/24/20, state legislators lowered the threshold when the top rate of 10.75% comes into play to taxable incomes in excess of $1 million.  The change is expected to raise an additional $390 million per year in state tax revenue for New Jersey (source: New Jersey Legislature).
  1. ALL IN THE FAMILY – One political party has controlled the White House, the Senate and the House of Representatives in 22 of the last 60 years, i.e., 1961-2020. Republicans last controlled the White House, the Senate and the House in 2018.  Democrats last controlled all 3 in 2010 (source: BTN Research).
  1. DEATHS BY COUNTY - 50% of US counties (1,562 out of 3,142) have experienced 6 or fewer COVID-19 related deaths as of Wednesday 9/23/20. 27% of US counties (839 out of 3,142) have had zero or just 1 COVID-19 death as of Wednesday 9/23/20 (source: USAFacts).
  1. A BIG PERCENTAGE EVEN BEFORE - The pandemic pushed the percentage of adults age 18-29 living with a parent to 52% as of the end of July 2020. Surprisingly, the percentage of adults age 18-29 living with a parent as of the end of January 2020, i.e., before the 1st US COVID-19 death, was 46% (source: Pew Research Center).
  1. HE CAN HIT - New York Yankee DJ LeMahieu won the AL batting title this season, hitting .364. He also won the NL batting title in 2016 with a .348 batting average.  It has been 118 years since anyone has won a batting title in both leagues.  Ed Delahanty was the top hitter in 1899 in the NL and in 1902 in the AL (source: MLB).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: September 28th, 2020 | 0 Comments

  1. FINAL QUARTER - Over the last 30 years (1990-2019), the S&P 500 stock index has gained an average of +4.7% (total return) over the final 3 months of the year (October-November-December). 24 of the last 30 fourth quarters (80%) have produced a positive total return gain.  The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
  1. COULD HAVE BEEN WORSE - The 9.1% drop in the size of the US economy between the 2nd quarter of 2019 and the 2nd quarter of 2020 was a smaller decrease than the decline that took place in India (down 25.2%), the UK (down 20.4%), Mexico (down 17.1%), France (down 13.8%), Italy (down 12.8%) and Canada (down 11.5%) (source: Organization for Economic Cooperation and Development).
  1. BANKS - 21 banks have failed in the last 5 years (through 9/25/20), requiring a financial bailout from the Federal Deposit Insurance Corporation, about 4 failures per year. By comparison, 127 banks had failed YTD through this point in calendar year 2010, i.e., YTD through 9/25/10, about 3 failures per week (source: FDIC).
  1. ARE THEY READY? - Stress tests conducted on 34 major US banks project that the pandemic could result in as much as $700 billion of bank losses. The forecast, released on 6/25/20, stated that US banks “can remain strong in the face of even the harshest shocks” (source: Federal Reserve).
  1. LOTS OF PEOPLE - 22% of Americans (74 million people) are on Medicaid, the nation’s health care program for low-income Americans that is jointly funded by the federal government and all 50 states (source: Medicaid).
  1. BIG DEBT – Our national debt has grown from $22.623 trillion on 9/24/19 to $26.786 trillion on 9/24/20, an increase of $4.163 trillion. That’s equivalent to adding $11.4 billion of new debt per day, or $475 million per hour, or $7.9 million per minute, or $132,000 per second over the past year (source: Treasury Department).
  1. DEBT LIMIT - Legislation signed by President Donald Trump in July 2019 suspended our country’s debt ceiling limit until 7/31/21, i.e., there is no statutory limit on our nation’s borrowing for the next 10 months. The debt ceiling has been raised, temporarily extended or suspended 87 times since 1960 (source: Treasury Department).
  1. 14-YEAR HIGH - New residential construction in the US totaled 139,100 housing units in July 2020, its highest monthly total recorded since September 2006. The total includes 93,100 single family homes, 700 apartment buildings with 2-4 units and 45,300 apartment buildings with 5 or more units (source: Census Bureau).
  1. LARGER LOAN - On 1/02/20, the national average interest rate for a 30-year fixed rate mortgage was 3.72%, producing a $461 monthly “principal and interest” payment per $100,000 borrowed. The same $461 payment at last week’s 2.90% national average would allow a home buyer to borrow $110,855 (source: Fannie Mae).
  1. JOBS IMPACT - Before the COVID-19 pandemic hit the United States, the number of out-of-work Americans as of 2/29/20 was 5.79 million. As of 8/31/20, the number of out-of-work Americans was 13.55 million.  Thus in the last 6 months, the pandemic is in part behind 7.76 million people losing their jobs (source: Department of Labor).
  1. VOTING - The 2020 elections in the US take place 36 days from today. On 11/03/20, Americans will vote for a President, all 435 members of the House and 33 members (out of 100) of the Senate (source: Congress).
  1. HOPE THEY ARE RIGHT - 159 of 224 global money managers surveyed (71%) in September 2020 anticipate that a “credible vaccine” for the COVID-19 pandemic will be found by 1/30/21 or within 4 months. The 224 managers oversee $600 billion of assets (source: Bank of America’s Global Fund Manager Survey).
  1. DEATHS - The White House announced on 3/31/20 (6 months ago) that the death toll from the pandemic could be 100,000 to as high as 240,000. As of Friday 9/25/20, the death count was 204,057 (source: Johns Hopkins).
  1. WHEN IS YOUR BIRTHDAY? – With 57 people in a room, there is a 99% chance that 2 people in the group have the same birthday. With 32 people in a room, there is a 75% chance that 2 people in the group have the same birthday.  With just 23 people in a room, there is a 51% chance that 2 people in the group have the same birthday (source: BTN Research).
  1. GOLF ON TV - Fox Sports bought the rights for $1.1 billion (or $93 million per year) to telecast the US Open golf major for the 12 years from 2015-26. When the pandemic pushed the US Open from mid-June to mid-September this year, Fox was faced with scheduling conflicts due to its existing college and pro football TV schedule.  The solution: NBC Sports bought the broadcasting rights for the 7 years from 2020-26 (source: NBC).

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

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