7-Chart Sunday (12/26/21)

By Charlie Bilello

26 Dec 2021


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7 charts from the past week that tell an interesting story in markets and investing…

1) Hello $29 Trillion

The US National Debt has moved above $29 trillion for the first time. The increase over the last 2 years: $6 trillion.

Here’s the trajectory of National Debt as a percentage of GDP since 1980…

  • 1980: 31%
  • 1985: 40%
  • 1990: 52%
  • 1995: 65%
  • 2000: 58%
  • 2005: 61%
  • 2010: 87%
  • 2015: 101%
  • Today: 126%

2) The Most Bullish Time of the Year

Historically, the last 10 trading days in December have been the most bullish time of the year, with the S&P 500 gaining 1.5% on average since 1928.

We seem to be following that same pattern thus far, with the S&P 500 gaining over 2% last week. It also closed at its 68th all-time high of 2021, the most of any year in history with the exception of 1995.

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At 402 trading days and counting, this is now the 4th longest streak above the 200-day moving average for the S&P 500 ETF ($SPY).

3) A Year of Rising Inflation

In the last inflation data point of the year, PCE came in at 5.7%, the largest year-over-year increase we’ve seen since 1982. In each and every month in 2021 we’ve seen the inflation rate rise.

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4) Housing Boom Continues

Speaking of inflation, New Home Prices hit another new high in November, increasing 19% over the last year. 10 years ago the median new home in the US sold for $214k. Today that’s moved all the way up to $417k.

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5) Higher Premiums, Higher Profits

The average family health insurance premium in the US has more than tripled since the “affordable” care act was signed into law back in 2010.

The biggest beneficiaries? health insurers.

United Health Group (the largest US insurer) is up 1,690% vs. a 404% gain for the S&P 500.

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6) Supply Killed the SPAC Boom

We saw over 600 SPACs launched this year, totaling $162 billion in issuance.

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Like all booms, rising supply eventually overwhelmed demand.

The result: subpar performance for most SPAC investments, with the SPAC ETF ($SPAK) declining 23% this year versus a 28% gain for the S&P 500 ($SPY).

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7) The Silver Lining

Covid-19 cases are surging and on pace to hit new highs globally as we enter the new year.

The silver lining: fatality rates are declining with each subsequent wave…

Global Cases/Deaths Per Day

The combination of vaccine and natural immunity is significantly reducing the risk of severe illness as compared to a year ago. In addition, the Omicron variant that is now the dominant strain in the US and many parts of the world, appears to be milder than prior strains.

And that’s it for this week.

Wish you all a happy and healthy New Year!

-Charlie

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About the author

Charlie Bilello

Charlie is the founder and CEO of Compound Capital Advisors.

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