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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: June 27th, 2022 | 0 Comments

  1. STILL MADE SOME MONEY - The S&P 500 has suffered 2 “bear” markets since the beginning of the pandemic, i.e., in just the last 30 months. However the S&P 500 has gained +20.4% (total return) from the close of trading on 2/19/2020 (at the peak for stocks before the first “bear” began) through last Friday 6/24/2022 (8 days after the second “bear” bottomed).  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. HALF OWNED BY JUST ONE PERCENT - The top 1% of American households own 53.9% of equities in the United States as of 12/31/2021, through direct ownership of individual stocks or through pooled funds (e.g., mutual funds) that invest in the stock market (source: Federal Reserve).
  1. ALMOST NOTHING - The bottom 50% of American households own just 0.6% of equities in the United States as of 12/31/2021, through direct ownership of individual stocks or through pooled funds (e.g., mutual funds) that invest in the stock market (source: Federal Reserve).
  1. HAS A REAL IMPACT - Every 1 percentage point increase in mortgage rates reduces property sales by 10%. The average rate on a 30-year fixed rate mortgage was 5.81% on 6/23/2022, up from 4.42% just 3 months earlier on 3/24/2022 (source: Federal Reserve Bank of New York).
  1. A RECORD TOTAL - As of 3/31/2022, US single-family homes were worth $39.0 trillion, outstanding mortgages totaled $11.2 trillion, resulting in $27.8 trillion of home equity, an all-time record (source: Federal Reserve).
  1. MAKE IT EASY - Legislation has been introduced in the Senate (in March 2022) and the House (on 6/16/2022) that would make it easier for US small businesses to offer retirement plans. The “Starter-K Act” would allow for pre-tax employee contributions up to $6,000, but would include reduced up-front employer set-up costs, and a provision that would make matching contributions optional for employers (source: Congress).
  1. WHAT THE FED DID THEN - Inflation, as measured by the “Consumer Price Index,” was up +13.3% in 1979 and up +12.5% in 1980. The Fed funds rate, 8.5% as of 6/05/1980, was increased by the Fed to 20.0% just 6 months later (12/05/1980) to bring inflation under control.  Inflation was up +7.0% in 2021 and the Fed funds rate is 1.75% today after 3 Fed rate hikes already in 2022 (source: Federal Reserve).
  1. ALL IN THE SAME BOAT - As of 6/16/2022, central banks in 45 nations globally have raised interest rates in an effort to bring down the spending demand of consumers in their respective countries. The Federal Reserve has raised rates 3 times this year, most recently on Wednesday 6/15/2022.  The hikes were 0.25 percentage points, 0.50 percentage points and 0.75 percentage points (source: FactSet).
  1. TWO YEARS - Cleveland Federal Reserve President Loretta Mester, a current voting member of the Federal Market Open Committee (FMOC), said in a television interview on 6/19/2022 that it will take “a couple of years” for domestic inflation to drop down to the Fed’s +2% annual target rate (source: Face the Nation).
  1. TRAVELING OVERSEAS - The US dollar has risen in value foreign currencies this year. E.g., 1,000 Euros cost $1,056 last Friday 6/24/2022.  1,000 Euros cost $1,193 on 6/24/2021 or a year ago (source: BTN Research).
  1. THAT’S GOING TO HURT - The annual interest cost on the US national debt is forecasted to be $399 billion for the current 2022 fiscal year (i.e., the 12 months ending 9/30/2022), then rising to $1.194 trillion a decade down the road during fiscal year 2032. 10 years ago (fiscal year 2012), the annual interest cost on the national debt was $220 billion (source: Congressional Budget Office).
  1. WE DO LIKE TO SPEND - The US national debt, $30.42 trillion as of Thursday 6/23/2022, is forecasted to increase +49% to $45.35 trillion as of 9/30/2032 or 10 years from now. The national debt was $16.07 trillion as of 9/30/2012 or 10 years ago (source: Congressional Budget Office).
  1. THIS WILL GET MORE EXPENSIVE - Average credit card debt per household in the United States as of 3/31/2022 was $6,600 (source: Federal Reserve).
  1. FLY AWAY - 2.43 million people went through TSA screening last Thursday 6/23/2022, quadrupled the 623,624 that did so 2 years earlier on 6/23/2020 (source: Transportation Security Administration).
  1. OUT OF HERE! - Angels superstar Mike Trout hit 4 game-winning HRs in a 5-game series with the Mariners that ended on 6/19/2022, becoming the 1st player in history to hit 4 game-winning homers in a series (source: MLB).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: June 20th, 2022 | 0 Comments

  1. ANOTHER BEAR - When the S&P 500 closed at 3667 last Thursday 6/16/2022, the index was down 23.6% from its all-time closing high of 4797 set on 1/03/2022, i.e., qualifying as a “bear” market decline of at least 20%. The drop was the index’s 11th “bear” since 1950 but its 2nd since the start of the global pandemic.  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. IT MAY TAKE AWHILE - After suffering 10 separate “bear” markets between 1950 and 2021, the S&P 500 recovered and eventually achieved a new all-time closing high each time. The average length of time it took to retrace its steps from a “bear” market low to a new closing high was 25 ½ months or more than 2 years.  The quickest recovery for stocks took place over just 3 months (in 1982) while the longest recovery took 70 months or nearly 6 years (between 1974-1980) (source: BTN Research).
  1. TREASURYS - As of the end of fiscal year 2021 (9/30/2021), the Fed held more than twice the level of Treasury securities ($5.4 trillion) as held by Japan ($1.3 trillion) and China ($1.0 trillion) combined (source: CBO).
  1. WOW - The yield on the 10-year Treasury note has more than doubled YTD, rising from 1.496% as of the close of trading on 12/31/2021 to 3.222% as of the close of trading on 6/17/2022. Over the last 60 years (1962-2021), the yield on the 10-year note has never doubled over the course of a calendar year (source: Treasury Department).
  1. BORROWING FOR DIFFERENT REASONS - Mortgages that were originated during the 1st quarter of 2022 were split between 53% for borrowers who were refinancing an existing debt and 47% for borrowers who were purchasing a home (source: Attom Solutions).
  1. GOING DIGITAL - The weekday daily circulation of US newspapers has fallen 57% over the 2 decades between 2000 (55.8 million) and 2020 (24.2 million) (source: Census Bureau).
  1. NOT A HAPPY CAMPER - “Consumer sentiment” of the American shopper, an indicator of how optimistic consumers feel about their finances, fell in June 2022 to its lowest levelConsumer sentiment” has been tracked monthly since January 1978 (source: University of Michigan).
  1. THIS IS NUTS - 36% of US households making at least $250,000 a year in before-tax income are living “paycheck-to-paycheck” (source: Pymnts.com, LendingClub).
  1. NOT PART OF IT - An estimated 5 million American workers are not covered by Social Security. The group, comprised of state and local government workers, are not required to pay “payroll taxes” but are guaranteed by law to receive “comparable” retirement benefits from their employer (source: Center for Retirement Research).
  1. PLEASE STAY AND TEACH - After losing 1,250 full-time teachers at the end of the most recent school year, Omaha Public Schools decided to pay a $4,500 bonus per year to all full-time teachers in their system for each of the next 2 school years, i.e., 2022-2023 and 2023-2024 (source: Omaha World Herald).
  1. TRIPLED IN TWO YEARS - The price of West Texas Intermediate (WTI) crude oil closed at $37.96 a barrel on 6/17/2020 (i.e., 2 years ago). The price of WTI crude oil closed at $109.56 a barrel on 6/17/2022.  The all-time record closing high for WTI crude oil is $147.27 a barrel set on 7/11/2008 (source: NYMEX).
  1. STILL EXPENSIVE - The price of lumber more than quadrupled during the pandemic before falling 65% from a 5/02/2021 high but is still +45% higher today than where the price was at the end of 2019. Lumber was trading at $403.60/thousand board feet (MBF) on 12/29/2019, rose to $1,686/MBF on 5/02/2021, but has since fallen back to $585.70/MBF as of Friday 6/17/2022.  One board foot is equal to a piece of lumber that is 1 foot in length, 1 foot in width but just 1 inch in thickness (source: Chicago Mercantile Exchange).
  1. END OF LIFE - The median cost of a semi-private room in a nursing home facility is $7,908 per month or $94,900 per year, based on data collected nationally in August 2021 (source: Genworth Cost of Care Survey).
  1. DOWN ON THE FARM - Soybeans were trading for $17.69 a bushel on Thursday 6/09/2022, the highest price ever for the commodity. That broke the previous record for soybeans of $17.68 a bushel set almost 10 years ago in September 2012 (source: Chicago Board of Trade).
  1. THANKS DAD - Rob Walton, the 77-year old eldest son of Sam Walton, bought the NFL’s Denver Broncos for $4.65 billion on 6/08/2022, an all-time record for an NFL franchise. The previous record purchase price was $2.275 billion paid by David Tepper for the Carolina Panthers in May 2018 (source: NFL).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: June 13th, 2022 | 0 Comments

  1. DOWN A LOT - The S&P 500 is down 17.6% YTD (total return) through the close of trading last Friday 6/10/2022. The last year when the index suffered a “double-digit” loss was 2008, losing 37.0% that 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. FUNDING A RETIREMENT - The S&P 500 has averaged +9.8% per year (total return) over the 25 years ending 12/31/2021. A lump-sum of $865,656 (in a pre-tax account) will sustain a 20-year payout of $100,000 per year (i.e., $2 million of gross distributions before taxes) assuming the funds continue to earn +9.8% annually.  This mathematical calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).
  1. SPENDING MORE, SAVING LESS - The nation’s personal savings rate, which soared during the early months of the pandemic, has now fallen back to below its pre-pandemic levels. The savings rate was 7.8% in January 2020, rose to 8% in April 2020, and now has dropped back to 4.4% in April 2022.  The 4.4% rate is the lowest recorded in the United States since September 2008 (source: Bureau of Economic Analysis).
  1. WHERE OUR TAX DOLLARS GO - The Congressional Budget Office projects that the spending of the US government for fiscal year 2023, i.e., the 12 months beginning 10/01/2022, will be $5.87 trillion, split between mandatory spending (62.6%), discretionary spending (29.9%) and interest expense (7.5%) (source: CBO).
  1. MUST GET IT SOMEWHERE - China is the # 1 importer of crude oil and the # 2 consumer of crude oil among all countries in the world (source: Energy Information Administration).
  1. IN THE RED - The Social Security Trust Fund (OASI) paid out $59.1 billion more than it received in 2021, only the 2nd time in the last 25 years (1997-2021) that costs exceeded income (source: 2022 Trustee Report).
  1. GETTING WORSE - The projected 75-year shortfall in the Social Security Trust fund has more than doubled in the last 10 years. The 2012 Trustees Report forecasted a $8.6 trillion present value shortfall between payroll taxes anticipated to be collected and projected benefits to be paid out over the next 75 years.  The 2022 report, released 6/02/2022, projected the present value shortfall at $20.4 trillion (source: 2022 Trustees Report).
  1. GOOD SHAPE NOW - The Disability Insurance (DI) Trust Fund was projected to be depleted by the 4Q of 2016 per a 7/22/2015 trustee report. This forced Congress to allocate to the DI fund more of the 12.4% combined payroll taxes collected from employers and employees for 3 years (2016-17-18).  The extra funds have pushed the DI Trust Fund’s exhaustion date to 2096 or 74 years out (source: Social Security Trustees 2022 Report).
  1. MEDICARE - Per an 6/02/2022 report, the trust fund supporting Medicare Part A (hospital insurance) is projected to be depleted by 2028. The long-term (75-year) present value shortfall in the trust fund could be corrected by an immediate o.70 percentage point increase in combined Medicare payroll taxes (from its current 2.90% to 3.60%) or an immediate 15% reduction in Medicare expenditures (source: Medicare Trustees 2022 Report).
  1. CONSTRUCTION - An index that tracks the cost of building materials and supplies has increased +69.9% between January 2020 and April 2022, i.e., since the start of the pandemic (source: Bureau of Labor Statistics).
  1. TOO EXPENSIVE FOR MANY FOLKS - The median single-family home price in California today is $790,475 (source: Zillow).
  1. MORTGAGE DEBT - As of 12/31/2021, 62% of US homeowners had a mortgage on their primary residence. 51% of homeowners with debt on their homes have a mortgage rate less than 4%.  The national average rate on a new 30-year fixed rate mortgage was 5.23% as of 6/09/2022 (source: Federal Housing Finance Agency).
  1. RUSSIA - The US Office of Foreign Assets Control (OFAC) did not renew a waiver on 5/25/2022 that had allowed Russia to make principal and interest payments on bonds held by US investors. Lacking that waiver, Russia is more likely to default on its foreign debt, its first such default since 1917 or 105 years ago (source: OFAC).
  1. BE CAREFUL - 46,000 Americans reported being scammed out of an estimated $1 billion from cryptocurrency cons over the period from January 2021 to March 2022 (source: Federal Trade Commission).
  1. HE SCORES!! - The Colorado Avalanche will play for hockey’s Stanley Cup. The Avs last won the championship in 2001, led by Joe Sakic’s 54 goals and 64 assists.  Sakic is the Avs’ general manager today (source: NHL).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: June 6th, 2022 | 0 Comments

  1. NOT AS BIG - The companies in the S&P 500 had an average market capitalization of $72.8 billion as of 5/31/2022, down from an average market capitalization of $83.9 billion as of 12/31/2021. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: source: BTN Research).
  1. IN TEN YEARS - The 10-year budget forecast released by the Congressional Budget Office on 5/25/2022 predicts that over the next decade (fiscal year 2023 through fiscal year 2032) the government will collect $56.5 trillion in tax revenues (i.e., “receipts”), spend $72.2 trillion (i.e., “outlays”), netting to a $15.7 trillion deficit created over the next 10 years. That’s on top of our national debt of $30.5 trillion as of 5/31/2022 (source: CBO).
  1. IN THE YEAR 2034 - Social Security trustees announced on 6/02/2022 that the trust fund backing the payment of Social Security benefits (OASI retirement benefits) would be zero in 2034. A zero “trust fund” does not mean the payment of Social Security benefits would also go to zero, but rather would drop to 77% of their originally promised levels through the year 2096.  When the trustees released their report in 2007 (i.e., 15 years ago), the Social Security Trust Fund was projected to be depleted in 2042 (source: Social Security Trustees 2022 Report).
  1. LONG-TERM ISSUE - The estimated Social Security shortfall today (i.e., a present value number) between the future taxes anticipated being collected and the future benefits expected to be paid out over the next 75 years is $20.4 trillion. The entire $20.4 trillion deficit could be eliminated by an immediate 3.24 percentage point increase in the combined Social Security payroll tax rate (from 12.40% to 15.64%) or an immediate 20.3% reduction in benefits that are paid out to current and future beneficiaries (source: Social Security Trustees 2022 Report).
  1. DOLLARS IN, DOLLARS OUT - At the end of 2021, Medicare was covering 63.8 million Americans (19% of our population). The program was cash positive in 2021, taking in $888 billion of income (including $5 billion of interest income) while paying out $839 billion in benefits (source: Medicare).
  1. WHAT, ME WORRY? - 39% of 11,874 adults surveyed in November 2021 said they were “living comfortably financially” (source: Federal Reserve’s Economic Well-Being of U.S. Households in 2021).
  1. WHERE WE LIVE - Existing home prices in the United States have risen for 43 consecutive quarters through the end of the 1st Q 2022, i.e., from 6/30/2011 through 3/31/2022 (source: Federal Housing Finance Agency).
  1. RICH - The average net worth needed to be considered wealthy in the United States today is $2.2 million based on a survey completed by 1,000 individuals in February 2022 (source: Schwab Modern Wealth Survey).
  1. DID YOU NEED IT? - 41.3% of college graduates aged 22 to 27 are working in jobs in which they are “underemployed,” i.e., they are working in a job as of December 2021 that typically does not require a college degree. Historically, 33.9% of college graduates are “underemployed” (source: Federal Reserve Bank of NY).
  1. IT DID THE JOB - The Federal Reserve began to unwind its “quantitative easing” (QE) stimulus program last Wednesday 6/01/2022. QE began early in the pandemic (March 2020) and provided money at a “near zero” interest rate to businesses and consumers for the last 2 years in an effort to stave off what could have been a severe national recession (source: Federal Reserve).
  1. PUT IT ON THE CARD - Revolving debt in the United States, i.e., credit card debt and other similar types of debt that do not have a fixed number of payments, increased by $124.5 billion over the 12 months ending 3/31/2022 to reach $1.04 trillion. Although the $1.04 trillion is short of nation’s all-time record high of $1.09 trillion (12/31/2019), the $124.5 billion annual increase is the largest year-over-year dollar increase in US history.  Revolving debt has been tracked nationally since January 1968 (source: Federal Reserve).
  1. EUROPE - Inflation in the 19-nation Eurozone, i.e., the countries using the Euro as their common currency since 1999, was up +8.1% for the year ending 5/31/2022, a new high for Eurozone annual inflation (source: Eurostat).
  1. ADVANTAGE TO THE WORKERS - The number of job openings nationwide as of 4/30/2022 was 11.40 million, nearly twice the 5.94 million jobless Americans as of the same date (source: Department of Labor).
  1. WET AND WILD - Phoenix is offering $2,500 in incentive pay to attract lifeguards - $500 with a first paycheck and $2,000 if the individual works until the end of the 2022 pool season (source: Phoenix Parks and Recreation).
  1. GUESS WHO HAS A BETTER RECORD? - The New York Mets have a $268 million payroll, the largest in MLB this season. The Oakland Athletics have a $50 million payroll, the lowest in MLB this season (source: MLB).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: May 27th, 2022 | 0 Comments

  1. DOG DAYS OF SUMMER - The summer months of June-July-August are ranked 9th, 5th and 11th in terms of S&P 500 performance over the last 30 years, i.e., 1992-2021. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
  1. LAST YEAR - Going into the 2022 Memorial Day holiday, the S&P 500 is down 12.2% YTD (total return). Going into Memorial Day 2021, the S&P 500 was up +12.6% YTD (total return) (source: BTN Research).
  1. STOCKS AND RATE HIKES - Between 6/30/2004 and 6/29/2006, the Fed raised interest rates 17 times. Each rate hike was 0.25 percentage points, a total increase of 4.25 percentage points.  That took the Fed’s target short-term rate from 1.00% to 5.25%.  From the close of trading on 6/30/2004 to the close of trading on 6/29/2006, the S&P 500 gained +15.7% (total return) over the 2-years, or +7.6% per year (source: BTN Research).
  1. WORK FROM HOME, START A BUSINESS - Americans filed 4.35 millionnew business” applications in 2020 and 5.36 million in 2021, surpassing the previous US record high of 3.50 million filed in 2019. Before 2017, “new business” applications in the US had not exceeded 3 million in a single year (source: Census Bureau).
  1. ARE WE SHRINKING? - Demographers use 2.1 “births per woman” as the number of births required to achieve “replacement fertility,” i.e., the number of births needed for a population to exactly replace itself from one generation to the next. Over the 50 years from 1970 to 2020, the “births per woman” for the United States has declined from 2.5 to 1.6 (source: The World Bank).
  1. ONE THOUSAND FEWER EACH DAY - The United States had 3.658 million births in 2021, or 10,022 births per day. 20 years earlier (2001), the United States had 4.026 million births, or 11,030 births per day (source: Centers for Disease Control and Prevention).
  1. DIFFERENT PAYMENTS - For every $1,000 paid by Medicare for hospital inpatient and outpatient services, including costs incurred for medical facilities and services provided by healthcare professionals, an employer-sponsored health insurance plan would pay $2,240 or more than twice as much (source: RAND Corporation).
  1. KEEPING UP WITH INFLATION - Over the last 25 calendar years, i.e., 1997-2021, “cost of living adjustments” (COLA) for Social Security benefits have increased +73.7%. Over the last 25 calendar years, i.e., 1997-2021, inflation as measured by the “consumer price index” (CPI), has increased +75.8% (source: Social Security, Department of Labor).
  1. CAN’T LAST FOREVER - The size of the US economy as of 3/31/2022 was $24.4 trillion. The size of the US national debt as of 3/31/2022 was $30.4 trillion (source: Commerce Department).
  1. HOW DID YOU DO? - The net worth of Americans increased +62% over the last 5 years (+10.1% per year), rising from $92.8 trillion as of 12/31/2016 to $150.3 trillion as of 12/31/2021 (source: Federal Reserve).
  1. JOLLY GOOD - The unemployment rate in the United Kingdom, i.e., England, Scotland, Wales and Northern Ireland, dropped to 3.7% as of 3/31/2022, the island nation’s lowest jobless rate since 1974 or 48 years ago (source: Office of National Statistics).
  1. BLAME IT ON THE WAR - Moody’s Investors Services utilizes a credit rating scale that includes 21 different ratings from its top rating (Aaa) to its lowest rating (C). The top 10 ratings are deemed to be “investment grade” while the lower 11 ratings are “non-investment grade.”  Moody’s lowered the credit rating on the debt obligations of Ukraine to “Caa3” on 5/20/2022, the 3rd lowest rating (out of 21 ratings) issued by the firm (source: Moody’s).
  1. BUMMED - “Consumer sentiment” of the American consumer, an indicator of how optimistic consumers feel about their finances, fell in May 2022 to its lowest level since August 2011. “Consumer sentiment” has been tracked monthly since January 1978, i.e., for the last 533 months, and has been lower than the May 2022 level during just 10 months in the last 44 ½ years, i.e., 10 months out of 533 months (source: Univ. of Michigan).
  1. NOT NOW - Less than 1 in 5 Americans (19%) surveyed in April 2022 believe it’s a “good time” to buy a home in today’s market (source: Fannie Mae).
  1. SOCCER - 3 of the top 4 highest paid athletes in any sport in the world today play soccer, topped by Argentine superstar Lionel Messi who earned an estimated $130 million (both on and off the field) for the year ending 5/01/2022. Only 2 women were ranked in the top 50 sports earners globally (source: Forbes).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: May 23rd, 2022 | 0 Comments

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: May 16th, 2022 | 0 Comments

  1. FROM THE HIGH POINT - In the 91 trading days since closing at an all-time high on 1/03/2022, the S&P 500 has fallen 15.7% (total return) through last Friday 5/13/2022. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
  1. DO THE MATH - The S&P 500 is a cap-weighted index, i.e., the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation. As of the close of trading on Friday 5/13/2022, the 43 largest stocks in the index carries the same weight as the other 462 stocks in the index.  Note there are 505 stocks in the S&P 500 because 5 different stocks each have 2 share classes (source: S&P).
  1. STOCKS - From 12/31/2019 to 12/31/2021, the value of all US individual stocks increased by $19.5 trillion (+57%) to $53.4 trillion, before falling $5.1 trillion (10%) in the 1Q 2022 to $48.3 trillion (source: Siblis Research).
  1. THE INDEX TO FOLLOW - As of 3/31/2022, the S&P 500 index represented 83% ($40.3 trillion) of the market capitalization of the entire US stock market ($48.3 trillion) (source: S&P).
  1. HOW MUCH? - Fed Chairman Jerome Powell foreshadowed on 5/04/2022 the prospect of rate increases at each of the remaining 5 Fed meetings in 2022, including 0.50 percentage point increases at the next 2 meetings (scheduled for June and July). Powell’s comments equate to 2.5 percentage point increases in 2022, matching the 2.5 percentage point rate hikes implemented by the Fed in 1994 or 28 years ago (source: Federal Reserve).
  1. WHY THEY ACTED - The 1994 Fed rate hikes (6 rate hikes totaling 2.5 percentage points) were implemented because the Fed was concerned about a strengthening economy and an uptick in domestic inflation. Inflation (as measured by the Consumer Price Index) was only +2.7% in 1993, +2.7% in 1994 and +2.5% in 1995 (source: Commerce Department).
  1. WHAT TO DO? - 63% of 1,018 American adults surveyed in April 2022 are “very worried” or “moderately worried” about having enough money accumulated for retirement (source: Gallup).
  1. CHANGE IN DEBT - From 12/31/2019 (pre-pandemic) to 3/31/2022, mortgage debt in the US has increased +17% (to $11.18 trillion), auto loan debt has increased +10% to $1.47 trillion, credit card debt has declined 9% to $840 billion and student loan debt has increased +5% to $1.59 trillion (source: Federal Reserve Bank of NY).
  1. CAMPAIGN PROMISE - President Joe Biden is considering eliminating up to $10,000 of student loan debt per borrower, action that may be done through an executive order issued by him. This would cost US taxpayers an estimated $377 billion, wiping out 24% of the $1.59 trillion of total student loan debt and would eliminate completely the student loan debt held by approximately 33% of all borrowers (source: White House).
  1. RECORD HIGH - Tax receipts collected by the US in April 2022 were $863.6 billion, creating a monthly surplus of $308.2 billion, both numbers representing all-time monthly records for the US (source: Treasury Department).
  1. WAITING - The median age of American women giving birth was 30 in 2019 (the latest year that data has been released), the oldest age in US history and a number up from age 27 in 1990 (source: Census Bureau).
  1. YOU SNOOZE, YOU LOSE - A buyer of an average-priced existing US home ($266,300) in January 2020 (at the beginning of the global pandemic) who put 10% down would have a $1,078 monthly principal and interest payment on a 51% national average 30-year fixed rate mortgage. A buyer of an average-priced existing US home ($375,300) in March 2022 who put 10% down would have a $1,746 monthly principal and interest payment on a 4.67% national average 30-year fixed rate mortgage (source: Freddie Mac).
  1. CARPENTERS NEEDED - 3.78 million new single-family homes began construction in the US in the back-to-back months of December 2021 and January 2022, the highest number of new residential construction starts in back-to-back months since 3.90 million single-family homes were started in April and May 2006 (source: Census Bureau).
  1. THE PLACES TO BUY - The 3 most affordable housing markets in the United States today are Pittsburgh, Oklahoma City and Rochester, NY (source: Frontier Centre for Public Policy).
  1. HARD TO BELIEVE - In just his 6th race in his life, “Rich Strike” won the Kentucky Derby on 5/07/2022 as an 80-1 longshot. The 3-year old, purchased for just $30,000 in September 2021, paid $163.60 on a $2 bet to win.  “Rich Strike,” in 17th place out of 20 horses halfway through the race, collected a purse payout of $1.86 million for the win.  IRS Publication 505 discusses tax implications of gambling winnings (source: Sports Illustrated).

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: May 8th, 2022 | 0 Comments

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

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: April 30th, 2022 | 0 Comments

  1. SHORT TERM AND LONG-TERM - The S&P 500 lost 8.7% (total return) during April 2022, its worst month since March 2020. Over the long-term, the S&P 500 has gained +12.3% per year (total return) for the 100 months through 4/30/2022, gained +9.8% per year (total return) for the last 200 months, gained +8.8% per year (total return) for the last 300 months, and gained +10.8% per year (total return) for the last 400 months.  The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
  1. REDUCING RISK - Since peaking at $936 billion at the end of October 2021, margin debt held by US equity investors has fallen 15% to $800 billion at the end of March 2022 (source: FINRA).
  1. IT’S BAD EVERYWHERE - Global inflation is projected to rise by +7.4% during calendar year 2022 (source: International Monetary Fund).
  1. ABOUT HALF – US inflation, measured by the “Consumer Price Index,” was up +7.0% during 2021. Three percentage points (out of the 7 percentage points) is a function of direct fiscal support from the US government and how American households spent the pandemic-related money (source: Federal Reserve Bank of SF).
  1. IS INFLATION THE REASON? - The US economy shrunk by an annualized 1.4% during the 1Q 2022, an 8.3 percentage point swing from +6.9% annualized growth recorded in the 4Q 2021. Other than the volatile swings in growth in 2020 during the first year of the pandemic, the US has not seen an 8.3 percentage point quarterly downward swing in the size of the US economy since the 4Q 1981 or 40 years ago when the economy went from a +4.9% growth rate to a 4.3% contraction quarter-over-quarter (source: Commerce Department).
  1. BIGGER THAN USUAL? - The Federal Reserve may raise short-term interest rates by 0.50 percentage points following their 2-day meeting this week (on 5/04/2022), action that was last taken by the central bank on 5/16/2000 or 22 years ago. Since then, the Fed has raised rates 27 times over 22 years, but every rate bump has been a 0.25 percentage point hike (source: Federal Reserve).
  1. SPEND IT NOW - From the end of 2019 (pre-pandemic) to the end of 2021, American households increased their “readily available cash” from $10.6 trillion to $14.7 trillion, an increase of $4.1 trillion of cash accumulated over the 24-month period (source: Federal Reserve).
  1. ADD TO POPULATION - 3.7 million babies were born in the United States in 2021. Nearly 3 times as many babies (10.6 million) were born in China in 2021, the lowest number of annual Chinese births based on records maintained since 1949 (source: US National Center for Health Statistics, China’s National Bureau of Statistics).
  1. DRAG ME OUT - It took an average of 917 days (2 ½ years) for banks to complete the foreclosure process on the 11,824 homes that were repossessed nationwide during the 1st quarter of 2022 (source: Attom Solutions).
  1. WHAT DID YOU BUY? - Nearly 3 of every 4 sales of “light vehicles” (73%) in America in 2021 were the purchase of trucks and sport utility vehicles, a percentage that rose to 80.5% of all “light vehicle” sales in March 2022, an all-time record (source: Edmunds).
  1. FOR MANY YEARS TO COME - The leasing of federal land in 9 US states (Wyoming, Colorado, Utah, Nevada, Montana, Alabama, New Mexico, North Dakota and Oklahoma) to domestic oil producers that began on 4/18/2022 could generate crude oil production past the year 2030 (source: American Petroleum Institute).
  1. IT PEAKED TWO YEARS AGO - The highest level of crude oil production in US history was 13.1 million barrels a day as of Friday 3/13/2020, the day President Donald Trump declared a national emergency due to the pandemic. As of Friday 4/22/2022, our national production of crude oil was 11.9 million barrels a day (source: Energy Information Administration).
  1. CASH FLOW - The 27 nations that make up the European Union buy an estimated $450 million per day of Russian oil and $400 million per day of Russian natural gas (source: Bruegel Think Tank – Brussels).
  1. YOUR NEW HOME - The United States will accept 100,000 Ukrainians fleeing their war-torn country. As of Friday 4/22/2022, 15,000 Ukrainians had arrived in the USA (source: White House).
  1. TOP PICKS – The first 5 picks in the NFL draft held last Thursday 4/28/2022 were defensive players, beginning with # 1 pick Travon Walker of Georgia. That’s the first time defensive players occupied the top 5 draft picks since 1991 or 31 years ago.  Defensive tackle Russell Maryland of Miami was the # 1 pick in 1991 (source: NFL).

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

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Bill’s By The Number$

Posted by:Lisa Navarro | Posted on: April 25th, 2022 | 0 Comments

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

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