By The Numbers - August 2019Submitted by S. F. Ehrlich Associates, Inc. on August 13th, 2019
Source: Direxion Funds
August 15, 2019
- 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).
- 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).
- 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).
- 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).
- AFTER THE CUTS BEGIN - The Fed has initiated 5 rate-cutting cycles since 1990, i.e., in 1990, 1995, 1998, 2001 and in 2007. In the 1-year following its 7/13/90 initial rate cut, the S&P 500 gained +3.5%. In the 1-year following its 7/06/95 initial rate cut, the S&P 500 gained +18.7%. In the 1-year following its 9/29/98 initial rate cut, the S&P 500 gained +20.9%. In the 1-year following its 1/03/01 initial rate cut, the S&P 500 lost 13.5%. In the 1-year following its 9/18/07 initial rate cut, the S&P 500 lost 20.6% (source: BTN Research).
- WHERE DID THEY GO? - The number of publicly listed companies, i.e., companies traded on an exchange, has dropped from a peak of 8,090 in 1996 to just 4,336 today (source: theglobaleconomy.com).
- THE VERY RICHEST - The top 1% of wage earners in the US reported at least $480,804 of pre-tax income in 2016 and own an estimated 29% of the total wealth in the country (source: Survey of Consumer Finances).
- NOT MY BEST DECISION - 57% of Millennials burdened with student debt resulting from their college education regret taking out as many loans as they did. Millennials were born between 1981-97 and are ages 22-38 in 2019 (source: Citizens Bank).
- CAMPAIGN TOPIC - Student loan debt has doubled in the United States since 12/31/09 and has quadrupled since 6/30/05 (source: Federal Reserve Bank of New York).
- GRAY HAIR OR NO HAIR - An estimated 56 million Americans will be at least 65 years old by the year 2020, i.e., 1 out of every 6 Americans. An estimated 73 million Americans will be at least 65 years old by the year 2030, i.e., 1 out of every 5 Americans (source: Census Bureau).
- NO COMMUTE NECESSARY - 24% of American workers did some of their work or all their work from home in 2018 (source: Department of Labor).
- VERY DIFFERENT PERIODS - In the last 25 years, i.e., 7/01/94 to 6/30/19, the USA suffered just 2 recessions. In the 25 years before that, i.e., 7/01/69 to 6/30/94, the USA had suffered 5 recessions (source: National Bureau of Economic Research).
- WHAT IF THEY GOT MAD AND LEFT? - The wealthiest 1% of Californians, i.e., taxpayers reporting adjusted gross income of at least $877,560, pay 48% of the total state income tax collected (source: Institute for Taxation and Economic Policy).
- FATAL CRASHES – 624,000 Americans have died in car crashes in the last 20 years, i.e., 2000-2019, equal to the 624,000 Americans soldiers that died in World War I (117,000), World War II (405,000), Korean War (37,000), Vietnam War (58,000), and the Afghanistan/Iraqi War (7,000) (source: NHTSA).
- BUYING FROM THE USA - The top 5 countries purchasing American exports in 2018 were Canada, Mexico, China, Japan and the United Kingdom (source: Commerce Department).
- REAL ESTATE SHIFT - Over the 12 years from 6/30/04 to 6/30/16, the number of “renter” households in the United States increased by +11.2 million to 43.9 million, while the number of “owner” households increased by just +1.0 million to 74.4 million. However, over the last 3 years from 6/30/16 to 6/30/19, the number of “renter” households in the United States was flat, remaining at 43.9 million, while the number of “owner” households increased by +4.1 million to 78.5 million (source: Census Bureau).
- NOT NOW - The last year when the highest close during the year for the S&P 500 occurred during August was in 1987. Since 1987, the high close for the index has occurred in December 17 times (source: BTN Research).
- A LOT IN A FEW - Of the 532 bank failures that have occurred in the USA during the 15 years ending 7/31/19, 51% (270 failures) have taken place in just 4 states – Georgia, Florida, Illinois and California (source: FDIC).
- GUARANTEED LOSS - There are $13 trillion of “negative-yielding” government bonds in the world today, i.e., a bond investor who hold the debt instrument to maturity will receive less money back over the bond’s lifetime, including annual interest, than what he/she paid for the bond up front. $6 trillion of the $13 trillion is Japanese sovereign debt. None of the $13 trillion is US government debt (source: Bloomberg).
- WHERE WE LIVE - 40% of American homeowners, i.e., 31.4 million out of 78.5 million, own their primary residence free and clear of any debt, i.e., no outstanding mortgage debt or home equity loan. The 31.4 million homeowners with zero housing debt represent 26% of the 122.4 million households in the United States today, the latter total including 43.9 million households who are renters and not owners (source: Census Bureau).