By The Numbers July 2019
1. LOOK-BACK – As of 6/30/19, the total return of the S&P 500 is +10.4% for the trailing 1-year, +14.2% per year for the last 3- years, +10.7% per year for the last 5-years and +14.7% per year for the last 10 years. 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. AT MID-YEAR – The S&P 500 was up +18.5% YTD (total return) through 6/30/19, the index’s best performance at the half-way point of the year since 1997 (22 years ago) when the stock index was up +20.6% YTD (total return) as of June 30th (source: BTN Research).
3. THROW A DART – 418 of the stocks in the S&P 500 were up YTD through 6/30/19, including 221 stocks that were up at least +20% and 40 stocks that were up at least +40% (source: BTN Research).
4. MALL WOES – 4 of the 6 worst performing stocks in the S&P 500 YTD through 6/30/19 are department stores or clothing retailers (source: BTN Research).
5. GOING, GOING, GONE – 7,037 American retail stores have closed YTD through 6/30/19, already exceeding the 5,864 closures that occurred during all of calendar year 2018. This year’s store closures are on pace to exceed the all-time record of 8,139 from 2017 (source: Coresight Research).
6. LONGEST IN HISTORY – The US economic expansion began its 11th year (i.e., 121st month) a week ago today on 7/01/19, making it the longest-running expansion in our nation’s history based upon government data that has been maintained since 1854 or for 165 years (source: National Bureau of Economic Research).
7. IMPACT OF GLOBAL TRADE – Exports make up 12% of the gross domestic product (GDP) of the United States, 19% of the GDP of China, and 50% of the GDP of Germany. GDP is the annual market value of all goods and services produced domestically by a country (source: Economic Cycle Research Institute).
8. WE SELL EVERYWHERE – 44% of the revenues generated by the companies in the S&P 500 come from sales outside the United States (source: S&P Dow Jones Indices).
9. FROM LOWEST TO NOW – The yield on the 10-year Treasury note closed at 1.36% on 7/08/16 (i.e., 3 years ago today), its lowest closing yield ever. 10-year notes have been traded in the USA since 1790, i.e., 229 years of trading. The yield on the 10-year note closed last Friday 7/05/19 at 2.04% (source: Treasury Department).
10. UNPOPULAR RECORD – “Debt held by the public” totaled $15.8 trillion as of 9/30/18, 78% of the size of the US economy. The record high for “debt held by the public” as a percentage of the US economy was 106% in 1946. The government released a projection on 6/26/19 that “debt held by the public” as a percentage of the US economy will reach a new record high “within 13 to 20 years.” “Debt held by the public” plus “intergovernmental debt” ($5.8 trillion as of 9/30/18) equals “total public debt outstanding” (source: Government Accountability Office).
11. HOME DEBT – 65% of the debt of Americans as of 3/31/19 is mortgage debt, i.e., $10.4 trillion of mortgages out of $16.1 trillion of total household debt (source: Federal Reserve).
12. MORE EXPENSIVE ROAD TRIP – Gas taxes were raised in 12 US states as of 7/01/19, ranging from a 19 cent a gallon increase in Illinois and a 10.5 cent a gallon bump in Ohio to just a one-tenth of 1 cent increase in Nebraska and Michigan. The hike in Illinois was the state’s first gas tax increase since 1990 (source: Institute on Taxation and Economic Policy).
13. RAISE TAXES – Proposed House bill HR 860 (“Social Security 2100 Act”) would raise Social Security payroll taxes from 12.4% currently (the combined tax rate for employees and employers) to 14.8% by the year 2043. The combined rate would be raised 0.1 percentage point per year beginning in 2020 (source: Congress).
14. WHAT IF THE WORST HAPPENS? – All 18 major US banks subject to review passed the Federal Reserve’s “stress test” in 2019, the annual evaluation completed on Thursday 6/27/19 to determine a bank’s financial strength under a severe economic downturn. The examination focuses on the banks’ ability to continue to lend money to businesses and individuals under a “worst-case” economic scenario. Fed “stress tests” have been conducted annually since 2009 (source: Federal Reserve).
15. THEY MISSED THE EXTRA POINT – The Baltimore Orioles beat the Cleveland Indians by identical 13-0 scores on consecutive days (June 28-29, 2019), the first time in baseball’s 144-year history that a major league team has shut out its opponent while scoring at least 13 runs in back-to-back games (source: MLB).