FIRST YEAR IN OFFICE - The first calendar year of the 8-years that Barack Obama was president (2009) produced a S&P 500 gain of +26.5% (total return). The first calendar year of the 4-years that Donald Trump was president (2017) produced a S&P 500 gain of +21.8% (total return). The first calendar year of the Joe Biden presidency has produced a S&P 500 gain of +26.2% YTD (total return) with 7 weeks to go in the year. 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).
BOND BULL RUN – Just over 40 years ago (9/30/1981), the yield on the 10-year US Treasury note closed at an all-time peak of 15.84%. The yield on the 10-year Treasury note closed on 11/12/21 at 1.583%. The all-time low closing yield on the 10-year Treasury note was 0.501% set on 3/09/20 (source: Treasury Department).
NOT AS LONG AS YOU WOULD THINK - The “weighted average maturity” (WAM) of Treasury debt issued by the US government was 64.6 months (about 5 ½ years) as of 12/31/2020, up slightly from its historical average of 60.2 months (5 years) based on bills, notes and bonds in force since 1980 (source: Treasury Department).
“TAKE-UP” RATE - 68% of American workers in the private sector worked for employers that provided retirement benefits as of 3/31/21. 51% of the 68% who had access to a plan elected to participate in their company’s retirement plan (e.g., 401(k) plan), i.e., 75% of private sector workers who had an option to participate elected to do so (source: Bureau of Labor Statistics).
SAVING FOR RETIREMENT - The 401(k) individual pre-tax contribution limit will be $20,500 in 2022, up from $17,000 in 2012 or 10 years earlier. If the same inflation adjustments that have occurred over the last 10 years repeat over the next decade, the 401(k) individual pre-tax contribution limit will be $24,721 in 2032 (source: IRS). For IRAs, contribution limits remain the same as in 2021.
GIFT TAX – The Gift Tax annual exclusion for 2022 will be $16,000.
GOT YOUR BACK JACK - Employers paid on average 73% of the annual cost of family coverage for health insurance in 2021, a non-taxable economic benefit for the employee (source: Kaiser Family Foundation).
AMERICAN DREAM – As of the end of the 3rd quarter (9/30/2021), total US mortgage debt was $10.99 trillion, 72% of the $15.24 trillion of total household debt (source: Federal Reserve Bank of New York).
WHAT HAS CHANGED? – 20,331 homes have been repossessed by lenders nationwide YTD through 10/31/21. That’s down from 50,238 homes repossessed for all of 2020, 143,955 homes in 2019, 230,305 homes in 2018 and 291,579 homes in 2017 (source: Attom Data Solutions).
TIMELINE - HR # 3684, the “Infrastructure Investment and Jobs Act,” was passed by the Senate on 8/10/21, passed by the House on 11/05/21 and was signed by President Biden on 11/15/21 (source: Congress).
GOING UP - Inflation, as measured by the Consumer Price Index, advanced +6.22% on a year-over-year basis as of the end of October 2021. That’s the greatest trailing 1-year inflation recorded in the United States since prices were up +6.27% as of November 1990 or nearly 31 years ago (source: Bureau of Labor Statistics).
ONE BIG REASON - The price of imported industrial supplies and materials coming into the US has increased +28% from just prior to the pandemic through 7/31/21. Industrial supplies and materials include paper, building materials, and metals used in other durable goods. All these items are key components in the US supply chain, impacting the price of thousands of finished products in our economy (source: Federal Reserve Bank of NY).
NOT BABIES ANYMORE - “Baby Boomers” are the 78 million Americans born between 1946-1964, i.e., the last of the “boomers” will turn 65 years old in 2029. By 2030, an estimated 9.5% of the US civilian labor force will be individuals at least age 65 years old, up from 6.6% today (source: Bureau of Labor Statistics).
