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).

IMPORTANT DISCLOSURE: The information contained in this material has been prepared for informational purposes only and does not constitute investment advice. Any mention of particular stocks or companies does not constitute and should not be considered an investment recommendation. Past performance is not a guarantee of future results. Any forward-looking statements presented in this material are inherently uncertain and cannot be relied upon as statements of actual performance.

Reproduction Prohibited without Express Permission – Copyright © 2019 Michael A. Higley. All rights reserved.