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Friday, October 18, 2019

Week of June 17, 2019

#6.  – The 18-month recession that the United States experienced between December 2007 and June 2009 wiped out more than $7 trillion of real estate assets and stock portfolios. At the low point, the collective net worth of Americans fell to $50.4 trillion as of 3/31/09. 10 years later, the balance sheets of Americans have gained +115% from that 2009 bottom to reach a record level of $108.6 trillion as of 3/31/19 (source: Federal Reserve).

1. BETTER THAN AVERAGE – The S&P 500 is up +16.3% YTD (total return) through the close of trading last Friday 6/14/19, the completion of 24 trading weeks of 2019. The index has set 4 all-time record closes this year and the 114 trading days already completed in 2019 are split 59/41 between “up” and “down” days. 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. BONDS – The US bond market (including treasury, municipal, corporate, mortgage and asset-backed debt) was worth $43.1 trillion as of 3/31/19. Treasury debt ($15.9 trillion) makes up the largest piece of the US bond market (source: Securities Industry and Financial Markets Association).

3. STOCKS – The total capitalization of the US stock market was $31.1 trillion as of 3/31/19, or 72% of the size of the US bond market as of the same date (source: Wilshire).

4. WAS BAD, NOW BEST – The worst performing stock within the S&P 500 during calendar year 2018 lost 67.1%, i.e., change of the stock price not counting the impact of dividends. That same stock is up +107.0% YTD as of the close of trading last Friday 6/14/19, the best performing stock within the index through 24 weeks of calendar year 2019 (source: BTN Research).

5. THEY MAKE THINGS – US manufacturers employed 12.8 million workers as of 12/31/18, almost identical to the 12.9 million manufacturing jobs in the country as of 12/31/41 or 77 years earlier. However, 264,000 new manufacturing jobs were added during calendar year 2018, the greatest annual increase since 1997 or 21 years ago (source: Department of Labor).

6. TEN YEARS AFTER THE BOTTOM – The 18-month recession that the United States experienced between December 2007 and June 2009 wiped out more than $7 trillion of real estate assets and stock portfolios. At the low point, the collective net worth of Americans fell to $50.4 trillion as of 3/31/09. 10 years later, the balance sheets of Americans have gained +115% from that 2009 bottom to reach a record level of $108.6 trillion as of 3/31/19 (source: Federal Reserve).

7. JOBLESS RATE – The last recession in the USA began at the end of December 2007 and lasted 18 months through June 2009. The nation’s unemployment rate as of 12/31/07 was 5.0%, climbing to 9.5% as of 6/30/09 (source: National Bureau of Economic Research, Department of Labor).

8. LATER THIS YEAR? – The probability of a Fed rate cut as of the end of last week (Friday 6/14/19) at its meeting scheduled for 6/19/19 was 23%. The probability of a Fed rate cut at its 7/31/19 meeting was 87%. The probability of a Fed rate cut at its 9/18/19 meeting was 97% (source: CME Group).

9. BUDGET REVIEW – During the first 8 months of fiscal year 2019, i.e., through 5/31/19, tax receipts are up +2.3% from the previous year to $2.27 trillion while outlays are up +9.3% to $3.01 trillion (source: Treasury Department).

10. TAKING THE KEYS – Banks repossessed 10,634 homes nationwide in May 2019. Banks repossessed 93,777 homes in May 2010, the 2nd worst month ever in American history (source: ATTOM Data Solutions).

11. CONTROLLING SUPPLY – The 15 nations that make up OPEC produced 29.9 million barrels of crude oil per day in May 2019, the cartel’s lowest monthly production in more than 5 years and 2.6 million barrels a day below the 32.5 million barrels a day produced just 7 months earlier in October 2018 (source: Rystad Energy).

12. GUSHER – US field production of crude oil reached 12.4 million barrels a day for the week ending 5/31/19, the largest weekly total reported in the 99 years this statistic has been tracked (source: Department of Energy).

13. YOUNG AND OLD – By the year 2035, the number of Americans at least age 65 (projected to be 78.0 million) will exceed the number of Americans under the age of 18 (projected to be 76.4 million), the first time in our nation’s history that has occurred (source: Census Bureau).

14. NOT A SECOND TIME – There have been just 2 US presidents in the last 75 years who were elected to a first term in office who failed to win their re-election bid for a 2nd term – Jimmy Carter in November 1980 and George H.W. Bush in November 1992 (source: BTN Research).

15. TORONTO ROCKS – The Toronto Raptors beat the Golden State Warriors on 6/13/19 to win the 2019 NBA Finals. The Raptors had a 58-24 record during the 2018-2019 regular season. Baseball’s Toronto Blue Jays had a 25-43 record as of games played through 6/13/19, on pace for a 60-102 record (source: BTN Research).

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