By The Number

What's $6 trillion look like? See #2.

Inflation in action. See #5.

BY THE NUMBERS

05/03/21 Edition

1. FOUR MONTHS - The S&P 500 gained +5.3% (total return) in April 2021, putting the index up +11.8% YTD (total return) through Friday 4/30/21. 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. NEED A SCORECARD - The Biden White House announced last week its 3rd stimulus proposal since taking office on 1/20/21. The “American Families Plan” is a $1.8 trillion proposal (released on 4/28/21) that directs money to childcare, paid family leave and other domestic priorities. Previously, the “American Rescue Plan Act,” aka HR # 1319, scored at $1.9 trillion and signed into law on 3/11/21 and the “American Jobs Plan,” the $2.3 trillion infrastructure proposal released on 3/31/21, was introduced by the administration (source: White House).

1. TO START IN JULY - 90% of the estimated 50 million households in the United States that have children under the age of 18 qualify (based upon the household’s adjusted gross income) for the expanded Child Tax Credit (CTC) per the “American Rescue Plan Act.” Beginning 7/01/21, the CTC will pay $300 per month per child under age 6 and $250 per month per child between the ages 6-17. Additional amounts may be available for full-time college students older than age 18. Please consult a tax expert for details (source: Tax Policy Center).   

1. HIGHEST EVER - The top capital gains tax rate in 2021 for a married filing joint taxpayer with taxable income of at least $496,600 is 23.8%. On Thursday 4/22/21, reports surfaced that the White House favors increasing the top capital gains tax rate in 2022 for a married filing joint taxpayer with taxable income of at least $1 million to 43.4%. The highest capital gains tax rate in US history is 39.875%, last levied in 1978 (source: IRS).        

1. READY FOR A VACATION - The average daily cost of a short-term vacation rental, i.e., for 3-7 days, for the summer of 2021 is +26% higher than the average daily cost from the summer of 2019 (source: AirDNA). 

1. WOOD - The average cost of building a new single-family home in the US has increased by +8% in the last year ($24,000) solely because of the rising cost of lumber. Lumber mills shut down nationwide in 2020 for as long as 4 months, leading to a lumber shortage as homebuilding demand accelerated. Lumber imports into the USA have been impacted by a beetle plague ravaging Canadian forests (source: National Association of Homebuilders).

1. DEMAND FOR EXISTING HOMES - The median price of a new single-family home built in the USA in March 2019 was +17% more expensive than the median price of an existing single-family home sold in March 2019. The median price of a new single-family home built in the USA in March 2021 was just +1% more expensive than the median price of an existing single-family home sold in March 2021 (source: Census Bureau).

1. MAKE A QUICK DECISION - Existing homes that were sold nationwide in March 2021 were on the market on average of just 18 days (2 ? weeks) before selling (source: National Association of Realtors). 

1. SIMPLER RETURN - The “Tax Cuts and Jobs Act” (TCJA) of December 2017 increased the standard deduction for taxpayers effective with the 2018 tax year. As a result of the change, the percentage of households taking the standard deduction has increased from 70% (pre-TCJA) to 90% (post-TCJA) (source: Tax Policy Center).   

1. TAX INCENTIVE - Just 45% of households in Germany are homeowners (compared to 66% in the USA). Interest paid on a home mortgage in Germany is not deductible on a personal tax return (unless the homeowner does not occupy the property), whereas mortgage interest expense is deductible for US homeowners who itemize their deductions (source: Deutsche Bundesbank).  

1. KEEP YOUR DISTANCE - As of March 2021, 4.2 million American workers have stepped away from the workforce because they are afraid of catching the COVID-19 virus at work (source: Department of Labor).  

1. IT’S NOT AN OPTION - Just 1 in 25 US corporations (4%) surveyed anticipate requiring its employees to be vaccinated for the COVID-19 virus (source: ManpowerGroup North America).  

1. LONE STAR - Texas gained 2 seats in the House of Representatives (to 38 seats) based upon the 2020 Census, on top of the 4 seats it gained (to 36 seats) following the 2010 Census (source: Census Bureau). 

1. HALF - 49% of the USA’s 330 million population maintain their health insurance through an employer’s health insurance plan either as an employee or a dependent of an employee (source: Kaiser Family Foundation).         

1. SOCIAL MEDIA - The PGA began on 1/01/21 a “Player Impact Program” that pays $40 million per year to the top 10 golfers based on “fan and sponsor engagement.” The top-rated golfer earns $8 million (source: PGA). 

- Reproduction Prohibited without Express Permission -

Written and Copyrighted ? 2021 Michael A. Higley. All rights reserved. Email [email protected] for information. 

                                                          Past performance is not indicative of future results. 

Deaths were more than double what was forecasted, but stocks soared. See #1.

Almost a $1 billion a day. See #13.

BY THE NUMBER$

04/05/21 Edition

1. STOCKS - In the last 30 years, the best 12-month performance for the S&P 500 occurred over the 1-year period that ended last Wednesday 3/31/21. The S&P 500 gained +56.4% (total return) from 3/31/20 to 3/31/21. Ironically, 3/31/20 was the date that the Trump White House announced US pandemic deaths could be 100,000 to as high as 240,000. Pandemic deaths were 3,000 on 3/31/20. Pandemic deaths were 551,000 as of 3/31/21. 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. MOST INVESTORS WERE WRONG - As of 3/31/20, i.e., a year ago, 66% of stock investors were “bearish” (50%) or “neutral” (16%) on the direction of the US stock market over the upcoming 6 months (source: American Association of Individual Investors). 

1. BEST STOCK MONTH - April has been the # 1 best month for the S&P 500 index over the last 30 years, i.e., 1991-2020, gaining an average of +2.17% (total return). The month of November (average gain of +1.92%) has been the # 2 best performing month over the last 3 decades (source: BTN Research).

1. A FORCE - As of mid-February 2021, retail stock traders represent 23.0% of all US equity trading (by dollar volume), more than double the 10.1% they accounted for in 2010 (source: Bloomberg Intelligence).    

1. BONDS - Long-dated Treasuries lost 15.8% (total return) over the 1-year ending 3/31/21. The Bloomberg Barclays Long US Treasury Index, which includes all Treasury securities with a remaining maturity of at least 10 years and having at least $250 million of outstanding face value, was used as the proxy (source: Bloomberg).

1. IN SEARCH OF YIELD - American corporations issued $140 billion of “junk-rated” bonds in the first quarter 2021, the highest quarterly volume of “junk” bonds in US history. “Junk” or “high yield” bonds are rated below “Baa” by Moody’s or rated below “BBB” by S&P (source: Refinitiv).         

1. THEY’RE BUYING BONDS - The Fed is buying $120 billion of bonds each month - $80 billion of Treasury debt and $40 billion of mortgage-backed securities. The Fed confirmed on 3/17/21 that the purchases will continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals” (source: Federal Reserve). 

1. FED TARGETS - In Chairman Jerome Powell’s 3/17/21 post-meeting press conference, he said the Fed will not raise interest rates until our nation records a 3.5% unemployment rate and annual inflation of at least 2%. The country’s jobless rate as of March 2021 was 6.0% and inflation, using the “personal consumption expenditures” (PCE) index preferred by the Fed, was up +1.6% for the 1-year through 2/28/21 (source: Federal Reserve).  

1. WEALTHIEST - The top 10% of US households (as measured by net worth) own 70% of all assets nationwide as of 12/31/20, i.e., $85.6 trillion out of $122.9 trillion. The bottom 50% of US households own just 2% of all assets as of 12/31/20, i.e., $2.5 trillion out of $122.9 trillion (source: Federal Reserve).

1. LOWEST PAID, HARDEST HIT - 82% of the net job losses in the United States in calendar year 2020 were suffered by workers in the bottom 25% of wage earners (source: Economic Policy Institute).

1. WORK-FROM-HOME - 25% of the workforce in the advanced economies worldwide could work from home between 3-5 days a week without any loss of productivity (source: McKinsey & Company). 

1. TAXES - Property taxes levied on office buildings and on private residences make up an estimated 30% of the tax revenue collected by American cities and towns, i.e., local governments (source: Urban Institute).  

1. WAIT TILL THE COST OF MONEY GOES UP - During fiscal year 2020, i.e., the 12 months ending 9/30/20, the US government spent $345 billion for interest payments on the national debt or $945 million a day. 5 years earlier, i.e., fiscal year 2015, the US government spent $223 billion for interest payments on the national debt or $611 million a day (source: Treasury Department). 

1. ADDING MORE DEBT - Total US household debt, including mortgages, credit cards and auto loans, was $12.67 trillion as of 12/31/08. Over the next 5 years, total household debt fell $1.15 trillion to $11.52 trillion as of 12/31/13. But over the last 7 years, total household debt has increased $3.04 trillion to $14.56 trillion as of 12/31/20 (source: Federal Reserve Bank of New York).

1. HE DOES BOTH - Los Angeles Angels baseball star Shohei Ohtani, a 2-way player, hit a 468-foot home run as a batter and reached 100 mph as a pitcher during Spring Training 2021 in Arizona (source: MLB).   

- Reproduction Prohibited without Express Permission -

Written and Copyrighted ? 2021 Michael A. Higley. All rights reserved. Email [email protected] for information. 

                                                          Past performance is not indicative of future results.