Major markets drifted lower last week, though domestically focused small-cap stocks did post a gain.
The news was offsetting for U.S. equities. On the one hand, we saw the launch of the European Central Bank's €1.2 trillion asset purchase program, which brought yields on several European government bonds to record lows. This was equity positive. Meanwhile, the U.S. dollar surged to a 12-year peak versus the euro and a 7 ½-year high against the yen. This, investors believe, will adversely impact stocks later this year.
The World by Numbers...
AT THE START OF A BEAR - The S&P 500 has experienced 10 bear markets since 1950 (defined as a drop of at least 20% from a previous closing high). The average decline of the S&P 500 after 1 month of what eventually resulted in a bear market was a loss of 5.3%. 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).
CLOSE TO HOME - US companies exported $552 billion of goods and services to buyers in Canada and Mexico in 2014, +65% more than the $335 billion they exported to buyers in Europe (source: Commerce Department).
ALMOST HALF FROM FOREIGN BUYERS - 46% of the revenue generated by companies in the S&P 500 is produced from sales to consumers outside the United States. Just 6% of the revenue generated by companies in the S&P 500 is produced from sales to European consumers (source: S&P Dow Jones Indices).
PREDICTING IS HARD - On Monday 3/09/15 (the 6th anniversary of the S&P 500's current bull market), USA Today writer Adam Shell wrote "after (the) bull's long run, many signs point to (an) impending bear market." On Thursday 10/10/02 as the bear market for stocks reached 2 ½ years in length, USA Today writer Adam Shell wrote "Where's the bottom, no end in sight." The date 10/10/02 was the very first day of a 5-year bull market that saw the S&P 500 double in value (source: USA Today).
THEN AND NOW - The yield on the 10-year Treasury note was 2.88% on 3/09/09. The yield on the 10-year Treasury note was 2.19% on 3/09/15 (source: BTN Research).
AND BORROW WE DO - The yield on the 10-year Treasury note was 2.17% on 12/31/14. The yield on the 10-year Treasury note was 4.22% on 12/31/04. Thus for the same annual cost of money, our government can borrow +94% more money today than we did 10 years ago (source: BTN Research).
DISCRETIONARY VS. MANDATORY - Over the next decade (fiscal years 2016-2025), estimated discretionary spending by the US government will total $13 trillion, an amount that is dwarfed by the government's $31 trillion of projected mandatory spending (source:
Office of Management and Budget).
WOMEN RULE - Women make up 89% of the nurses and 85% of the K-12 teachers in the United States today (source: Georgetown University).
A LOT IN A FEW - Less than 2% of the banks and savings institutions in the USA hold 80% of the deposits maintained in FDIC-insured institutions nationwide as of 12/31/14. There are 6,509 total banks and savings institutions holding $11.8 trillion of deposits as of the end of last year (source: FDIC).
JUST LEND IT - Excess bank reserves, i.e., amounts held at the regional fed banks by commercial banks instead of lending the money, totaled $2.399 trillion as of 3/12/15 (source: Federal Reserve).
MORE THAN DOUBLED - As of 1/31/15, there were 5.0 million job openings in the USA. As of 7/31/09, there were 2.1 million job openings in the USA (source: Department of Labor).
STATE AND LOCAL TAXES - For every $100 that the average American pays in state income tax in a single year, he/she also pays $103 in sales tax (on consumer purchases throughout the year) and $145 in property taxes (source: Tax Foundation).
TEN MILLION ARE IMPACTED - 11.7 million Americans had purchased their 2015 health insurance (as of 2/22/15) through the Affordable Care Act (ACA), 8.8 million via the federal exchange and 2.9 million using the various state health exchanges. An estimated 88% of the 11.7 million (i.e., 10.3 million) anticipate that they will qualify for a tax credit to lower their out-of-pocket premium, subject to a Supreme Court decision (expected in June 2015) in the King vs. Burwell court case (source: Department of Health and Human Services).
PAYS TO WAIT - The monthly Social Security retirement benefit claimed at age 70 by an individual would be +76% greater than the monthly Social Security retirement benefit claimed at age 62 (source: Social Security).
MONEY FOR CHARITY - Actor Will Ferrell played all 9 defensive positions last Thursday (3/12/15) in 5 separate spring training baseball games in the Phoenix area. Ferrell also served as a 3rd base coach and batted twice during the day. 4 major league baseball players in history have played all 9 positions in a single game, most recently Shane Halter on 10/01/2000 (source: Major League Baseball).