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By The Number$ by Michael A. Higley – 11/25/2016November 25, 20161. A MONTH TO GO – The S&P 500 index is up 10.5% YTD(total return) through Friday 11/25/16. The index’s trailing 50-year average return is 9.7% per year over the last half century, i.e., 1966-2015. 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. AWESOME, KEEP GOING – The S&P 500 has gained 285.4% (total return) from its 3/09/09 bear market low through the close of trading as of last Friday 11/25/16. This ongoing bull market is in its 93rd month. Only the 1990-2000 bull market that was into its 114th month before it peaked on 3/24/00 has lasted longer among the 11 bullsthat have occurred in the last 70 years (source: BTN Research).3. HIGHER AND HIGHER – After reaching another new all-time closing high on Friday 11/25/16, the S&P 500 has set 122 record closes in the ongoing bull market that began on 3/10/09, including 14 record highs in 2016 alone (source: BTN Research).4. GOOD IDEA – President-elect Trump has proposed term limits for Congress, restricting senators to a maximum of 2 terms of 6-years each (12-year max), and limiting House members to 3 terms of 2-years each (6-year max), a plan (if applied retroactively) that would remove 258 of the 535 members (48%) of Congress (source: Time).5. MAYBE TIME FOR NEW BLOOD – John Conyers (MI-D) has served in the House of Representatives since January 1965, i.e., just short of 52 years. Patrick Leahy (VT-D) has served in the Senate since January 1975, i.e., just short of 42 years (source: BTN Research).6. SOMEHOW HE KNEW – On 11/17/87 (29 years ago), Donald Trump said ”I believe that if I did run for President, I’d win.” Trump was being interviewed after he was asked to host the annual Democratic Congressional dinner by then Speaker of the House Jim Wright (TX-D) (source: New York Times).7. A LOCK? – As of the close of trading on the Friday before the presidential election (11/04/16), the bond market was showing a 67% chance of a rate hike at its 12/14/16 meeting. As of the close of trading on Friday 11/25/16, the bond market was showing a 94% chance of a rate hike at its12/14/16 meeting (source: Federal Reserve).8. ELEVEN YEARS LATER – The median sales price of existing homes sold nationwide during the month of October 2016 was $232,200. The median sales price of existing homes sold nationwide during the month of October 2005 (i.e., 11 years ago) was $229,000 (source: National Association of Realtors).9. COST TO BORROW GOING UP – The concern of bond investors that a Trump administration could bring an increased level of borrowing by the federal government to pay for the President-elect’s national infrastructure rebuild program is having an impact on home mortgage rates. The average 30-year fixed rate mortgage was 3.42% on 10/06/16, but has climbed more than � of 1% to 4.03% as of 11/23/16 (source: Freddie Mac).10. MORE THAN CUT IN HALF – The percentage of home mortgage loans that are delinquent (defined as being at least 1 monthly payment late but not including those loans in the foreclosure process) peaked at 10.06% at the end of the 1st quarter 2010. That number has fallen to 4.52% as of the end of the 3rd quarter 2016 (source: Mortgage Bankers Association).11. STILL THE AMERICAN DREAM? – The national homeownership rate in the USA as of 9/30/16 was 63.5%, down from a peak of 69.2% as of 12/31/04. Every 1 percentage point reduction in the homeownership rate represents 1.2 million households that have changed from homeowner to renter status (source: Census Bureau).12. INCOME – The top 1% of US taxpayers earned 8.5% of the nation’s adjusted gross income (AGI) in 1980, rising to 20.8% of AGI in 2000, peaking at 22.9% of AGI in 2007 and finally dropping to 19.0% of AGI in 2013, the latter percentage being the most recent data that has been released by the government (source: IRS).13. ANOTHER YEAR, ANOTHER TRILLION – Our nation’s national debt was $18.922 trillion as of 12/31/15, a total that has reached $19.898 trillion as of Wednesday 11/23/16(source: Treasury Department).14. EVERY DAY – An estimated 9,900 Americans will turn 65 years old each day next year (2017). This group represents the 7th year of 19 years of “Baby Boomers” turning age 65. An estimated 11,500 Americans will turn 65 years old each day in the year 2029 (source: Government Accountability Office).15. WOW – When Alabama faced off against Auburn on Saturday 11/26/16 in the 81st annual “Iron Bowl” showdown, it was the 9th consecutive year that one of the teams was ranked # 1 or # 2 in the nation (source: BTN Research)
By The Number$ – 11/19/2016November 19, 20161. LATE IN THE YEAR – The S&P 500 index has closed at its calendar year high during the month of December in 17 of the last 31 years, i.e., 1985-2015. The index’s high close (so far) during 2016 (2190.15) was achieved on Thursday 8/15/16. 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. FOUR – 2016 is the 4th year of Barack Obama’s 2nd 4-year presidential term. The S&P 500 has been positive on a total return basis during 17 of the last 20 “presidential 4th years.” The S&P 500 is up 8.9% YTD (total return) through the close of trading on Friday 11/18/16 (source: BTN Research).3. ELECTION RESULTS – Hillary Clinton (D) won the popular vote in the 2016 presidential election by 1.11 million votesover Donald Trump (R). Secretary Clinton won the state of California by 3.23 million votes and President elect Trump won by 2.12 million votes in all states but California(source: Washington Examiner).4. ONE HUNDRED VOTE SWING – The 6 states that President Obama won in the 2012 presidential election but Hillary Clinton lost in the 2016 race were Florida, Pennsylvania, Ohio, Michigan, Wisconsin and Iowa(worth 99 Electoral College votes). Clinton also lost the 2nd congressional district in Maine (1 Electoral College vote), a district that President Obama carried in 2012. Maine splits its 4 votes by district (source: BTN Research).5. LESS THAN HALF THE AVERAGE – The average 30-year fixed rate mortgage over the last 45 years is 8.26%. The average 30-year fixed rate mortgage as of 11/17/16 was 3.94% (source: Freddie Mac).6. WE TEACH THE WORLD – 59% of the 1,043,839 foreign students studying at American colleges during last year’s school year (2015-16) are natives of China, India, Saudi Arabia or South Korea. New York University (NYU) and the University of Southern California (USC) have the most foreign students in the United States (source: Institute of International Education).7. WE SELL, THEY BUY – US exports of goods and services to China have increased tenfold since 1999, rising from $17 billion in 1999 to $165 billion in 2015 (source: Commerce Department).8. WHAT ADVICE WOULD YOU GIVE? – A survey of 2,000 American adults found that their “best financial decision ever made” was “getting a college education” while their “worst financial decision ever made” was “not saving enough for retirement” (source: Claris Finance).9. BORROW AND SPEND – President elect Donald Trump’s plan to invest in American infrastructure (e.g., highways, bridges and airports) has prompted global investors to price an increased US debt level and higher domestic inflationinto bond prices. The yield on the 10-year Treasury note has increased from 1.83% on 11/07/16 (the day before the presidential election) to 2.36% on Friday 11/18/16 (source: Treasury Department).10. DECAYING – The United States will need to spend $3.32 trillion over the next decade to fix our nation’s infrastructure, including $2.04 trillion in roads and bridges(source: American Society of Civil Engineers).11. PENSION BACKSTOP – The Pension Benefit Guaranty Corporation (PBGC) was forced to take over an average of 10 failed pension plans per month over the last 14 fiscal years (2003-2016), a total of 1,685 pension plans over the entire 14 years. The PBGC protects defined benefit pension plans in the private (non-government) sector (source: Pension Benefit Guaranty Corporation).12. STRONGER BANKING SYSTEM – Only 5 banks have failed in the United States YTD through 11/15/16, on pace to be the fewest number of bank failures in our country since 2007 when just 3 banks failed. Over the 7 years from 2008-14, 507 banks failed, an average of 72 per year(source: Federal Deposit Insurance Corporation).13. STILL AT HOME – 32% of Millennials are living with a parent. “Millennials” are defined as the 75 millionAmericans ages 19-35 in 2016, i.e., individuals born from 1981-1997 (source: Pew Research Center).14. IMPROVING TREND – American banks have repossessed 318,000 homes YTD through 10/31/16. Banks repossessed 450,000 homes in 2015 and 671,000 homes in 2012 (source: RealtyTrac).15. COLLEGE FOOTBALL UPSETS – On Saturday 10/19/85, AP # 2 ranked Michigan lost to Iowa, # 3 ranked Oklahoma lost to Miami and # 4 ranked Arkansas lost to Texas. On Saturday 11/12/16, AP # 2 ranked Michigan lost to Iowa, # 3 ranked Clemson lost to Pitt and # 4 ranked Washington lost to USC. Jim Harbaugh was the Michigan QB in 1985 and the Michigan head coach in 2016 (source: CBS Sports).
By The Number$ – 11/12/2016
November 12, 2016
1. HISTORICALLY SPEAKING – 2017 will have a Republican in the White House and Republicans controlling both the House and the Senate. Over the last 80 years, the S&P 500 has gained 11.7% per year (total return) when the White House and Congress were controlled by the same political party. 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. WHOOPS – On the day of the 11/08/16 election, the political website “FiveThirtyEight” was projecting a 71.4% chance that Hillary Clinton (D) would win the presidential election with 302 Electoral College votes, 70 more than she actually won (source: fivethirtyeight.com).
3. GOT MORE, BUT LOST – Hillary Clinton (D) won the 2016 popular vote vs. Donald Trump (R). Clinton received 60.5 million votes, 395,050 more than Trump’s 60.1 million votes (source: Washington Examiner).
4. MANY STAYED HOME – 126.1 million Americans voted in the 11/08/16 presidential election, 3 million less than the number of voters in the 2012 election. The 126.1 million voters represent 56.8% of Americans that were eligible to vote, indicating that 96 million Americans that could have voted choose not to do so. The highest voter participation in the last 100 years was the 62.8% that voted in the 1960 election (source: BTN Research).
5. HOUSE – Using voting results through Friday 11/11/16, the House is now controlled by the Republicans 239-193 with 3 races still to be determined. The Republicans controlled the House 246-186 (with 3 vacancies) prior to the 11/08/16 elections (source: House of Representatives).
6. SENATE – Using voting results through Friday 11/11/16, the Senate is now controlled by the Republicans 51-46-2 with 1 race still to be determined(Louisiana). The Republicans controlled the Senate 54-44-2 prior to the 11/08/16 elections (source: Senate).
7. GOVERNOR RACES – Using voting results through Friday 11/11/16, the governorships across the country are now controlled by the Republicans 33-15-1 with 1 race still to be determined (North Carolina). The Republicans controlled the governorships 31-18-1 prior to the 11/08/16 elections (source: Washington Examiner).
8. GOT IT RIGHT AGAIN – The state of Ohio has correctly backed the winner of the US presidential election in the last 14 races, i.e., 1964-2016, including last week’s upset (source: PresidentElect.org).
9. JUMP ON – 5 days before the current bull market began in March 2009 only 18.9% of individual investors were “bullish” on US stocks. 38.9% of individual investors were “bullish” last week (source: AAII).
10. THE LAST MONTH – 20 of the last 25 Decembers have produced a positive total return for the S&P 500. The average December performance since 1991 is a total return gain of 1.78% (source: BTN Research).
11. DID I SAY THAT? – University of Pennsylvania finance professor Jeremy Siegel said he “wouldn’t be surprised to see a 1,000 point drop on the Dow” following Donald Trump’s victory on 11/08/16. Instead the Dow has gained 515 points since the election through the close of trading last Friday 11/11/16 (source: BTN Research).
12. INCREASE EVERYONE – Individual income taxes paid by American taxpayers would have to increase by 38% in order to eliminate our $587 billion deficit from fiscal year 2016 (source: Treasury Department).
13. IN JUST ONE YEAR’S TIME – As of the end of October 2016, the USA was domestically producing 8.52 million barrels of crude oil per day while we were importing 9.00 million barrels of crude oil per day, i.e., a 49/51 split between domestic production and foreign imports. As of the end of October 2015, the USA was domestically producing 9.16 million barrels of crude oil per day while we were importing 6.94 million barrels of crude oil per day, i.e., a57/43 split between domestic production and foreign imports (source: Department of Energy).
14. AND WE’LL PAY HOW? – A child born in 2016 that begins kindergarten in the fall of 2021 would attend college between the years of 2034 and 2038. If that child attended an average private 4-year college and if the annual price increases for private colleges experienced over the last 30 years ( 5.2% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would total $490,502 or $122,625 per year (source: College Board).
15. TOOK A LONG TIME – When the Chicago Cubs beat the Detroit Tigers in the 1908 World Series finale, the game took 1 hour and 25 minutes. When the Chicago Cubs beat the Cleveland Indians in the 2016 World Series finale, the game took 4 hours and 28 minutes (source: Major League Baseball).
By The Number$ – 11/4/2016November 04, 2016
1. NEW YORK, NEW YORK – The 2016 presidential election is between Hillary Clinton (D-NY) and Donald Trump (R-NY), the first time that the nominees of the 2 major US political parties have come from the same home state since 1944 (i.e., 72 years ago), when Franklin Roosevelt (D-NY) faced off against Thomas Dewey (R-NY). Roosevelt won the 1944 election, garnering his 4th term in the White House, a feat that cannot be replicated after the ratification of the 22nd Amendment to the United States Constitution in 1951 which limits presidents to a maximum of 2 terms in office (source: PresidentElect.org).
2. LOST AT HOME – If Al Gore (D-TN) had won his home state of Tennessee in the 2000 presidential election (George Bush beat Gore in Tennessee by 80,229 votes out of 2.08 million votes that were cast in the Volunteer State), Gore would not only have won the popular vote in the 2000 election nationally, he would have become the 43rd President of the United States (source: BTN Research).
3. A TIE? – There are 538 electoral votes at stake in tomorrow’s election. It will take 270 electoral votes to win the Presidency. There has been a tie in the Electoral College voting only one time in the nation’s history. In 1800, both Thomas Jefferson and Aaron Burr each received 73 electoral votes (source: PresidentElect.org).
4. HOW ABOUT THIS TIME? – Just 46% of eligible “Millennials” voted in the November 2012 election, compared with 69% of “Baby Boomers” that cast a vote. “Millennials” were adults aged 15-31 in 2012, i.e., individuals born from 1981-1997. “Baby Boomers” are defined as adults born from 1946-1964 (source: AP).
5. DOWN AT THE STATE LEVEL – In 23 states, Republicans control the governor’s office and the state legislature. In 7 states, Democrats control the governor’s office and the state legislature (source: National Conference of State Legislatures, National Governors Association).
6. HOW THEY VOTED – In the last 6 presidential elections (i.e., 1992-2012), 18 states have gone for the Democratic candidate each time, 13 states have gone for the Republican candidate each time, and the remaining 19 states have gone “blue” some years and “red” in other years (source: BTN Research).
7. BUCKEYE BRAINS – The state of Ohio has correctly backed the winner of the US presidential election in the last 13 races, i.e., 1964-2012. The presidents selected by our nation over that entire 48-year period resulted in Republicans winning 7 times and Democrats winning 6 times (source: PresidentElect.org).
8. APATHY – In the 2012 US presidential election, just 57.5% of eligible voters cast a vote (down from 62.3% in 2008), equal to 126 million voters. Thus, the 42.5% of eligible American voters that did not cast a vote for president in 2012 represents 93 million non-voters (source: Bipartisan Policy Commission).
9. NO MAS – Mitt Romney (R-UT) won just 27% of the Latino vote in the 2012 general election race vs. Barack Obama (D-IL) (source: USA Today).
10. SHE DIDN’T SING – Then First Lady Hillary Clinton won a Grammy in 1997 for “Best Spoken Word Album” for the audio version of her book “It Takes a Village” (source: HillaryClinton.com).
11. HAIL MARY – Donald Trump bought the New Jersey Generals, a USFL (United States Football League) franchise in 1982, sold the team before their first season (1983) then bought them back before the 1984 season. Trump signed Doug Flutie, Heisman Trophy winner out of Boston College for the 1985 season (source: BTN Research).
12. WATERGATE – At age 26 in 1974, Hillary Clinton worked on the Watergate impeachment inquiry staff, 1 of only 3 women on the 43-lawyer team. President Richard Nixon resigned in August 1974 (source: BTN Research)
13. TIME FOR A CHANGE? – Barack Obama is the 6th president since 1900 to be elected and serve exactly 2 full terms in office. In the previous 5 elections following a 2-term president, Americans voted the incumbent party out-of-office 4 times. Only Republican Ronald Reagan’s 8-years in office were followed by 4 years with another Republican president (source: BTN Research).
14. 60-VOTE SENATE – If either political party was to achieve 60 votes in the 100-member Senate that party would be able to stop a filibuster by the minority party, or end floor debate and bring any proposed legislation to a vote. The last time when either party had a filibuster-proof majority in the Senate resulted from the 1976 elections when the Democrats achieved a 61-vote majority (source: Senate).
SECOND CHOICE, BUT THE WINNER – George W. Bush won the 2000 presidential race but did not win the popular vote, the first time that happened since 1888 or 112 years earlier (source: PresidentElect.org).