The Treasury yield curve widened to a record, 2.81% amid signs the U.S. economy is strengthening.
Source(s): WSJ, iStockAnalyst.com
Source(s): WSJ, iStockAnalyst.com
Add Comment Data according to today’s Wall St. Journal survey of various Treasury primary dealers: § Forecast for 2-year yield to rise to 1.825% by the end of 2010; current = 0.799% § Forecast for 10-year note will yield 4.125%; current = 3.548%. § In June 2007, before the credit crunch, the 10-year yield traded above 5.3%. § However, the forecast 10-year note’s yield is near past 5-year average (4.1%) § YTD, Treasury’s have lost 2% § High-yield, high-risk corporate bonds are 2009’s best performing fixed income asset with a return of 57% YTD Why will bond yields rise? § Better economic outlook § Fed expected to raise federal funds rate since holding them near zero since December 2008. § Large debt issuance by the Treasury, which is forecast to raise $1.4 trillion in the current fiscal year that started in October after selling $1.786 trillion in fiscal 2009 Interesting December 2009 data re: Goggle’s primary SaaS: Google Apps below. § 3: Google’s Apps business is 3 years old § $750M: Google’s App business 2009 revenue § 2M: # of businesses using Google Apps § $19B: Microsoft’s 2009 office suite revenue § $22B: Google’s 2009 revenue § 60%: Google’s share of online advertising market § 1k: # of Google employees working on enterprise products, largely Apps. § $19B: Microsoft’s 2009 office suite revenue § 4/1/04: Gmail released to the world Source(s): Forbes, WSJ, Google.com § 2.8%: GDP expanded 2.8% in 3Q09 vs. contracting 6.4% in 1Q09 § 7.2M: U.S. economy has lost 7.2 million jobs § 10%: November 2009 unemployment # § 17: Following the previous recession which concluded in November 2001, companies continued to slash payrolls for 17 of the next 21 months § 11k: # of payroll jobs lost in November which was the smallest decline since late 2007 § 474k: first-time unemployment 4 week moving average § 86%: business services’ share of job market (vs. manufacturing jobs) § $237.6B: the amount (30%) of rescue package money ($787B) invested in the economy since February 2009 Labor-market recovery cycle: 1. Less people are terminated as businesses find solid footing. What is the latest “first-time unemployment” number? 2. When demand increases, business productivity increases. What is the latest productivity number? 3. When new growth is evident, more part-time workers are hired. What is the latest temporary job number? 4. In a growing economy, full-time positions are plentiful. What is the unemployment rate? Forecasts are typically incorrect: Often too optimistic at the top, forecasts (and investors) are also frequently too pessimistic at the bottom. § In July 2007 forecasters said that housing prices wouldn’t decline. § In May 2009 forecasters said the economy would grow at about a 1 percent rate in the second half of 2009. That’s likely to be off by a factor of three. Source(s): Newsweek, Bureau of Labor Statistics, Business Roundtable § 70%: # of mutual funds that charge 12b-1 fees § 12b-1 fees: named after the SEC rule that allows them; fees cover marketing and distribution costs (e.g., financial advisor commissions, 401(k) plan administration, mailing prospectuses, etc…) § 0.15 To 0.30%: average 12b-1 fee. § $140b: Since 1990, investors have paid more than $140 billion in 12b-1s § 8.5%: average mutual fund up-front fee (sales load) in 1980s. Source(s): WSJ § $10 trillion: size of mutual fund industry § $20k: kaChing’s minimum requirement re: a user’s liquid net worth § $3k: kaChing’s minimum requirement for investment § 140: kaChing’s minimum “genius” requirement § 425k: kaChing’s registered user base § 450: # of kaChing's users who have invested actual cash § 1.25%: kaChing’s average annual management fee § 0.9375%: amount of kaChing’s annual fee that goes to the geniuses § 11: # of kaChing geniuses § Covestor: kaChing competitor; minimum investment fee of $10k Source(s): WSJ, company web site § 40%: of Walmart’s online orders are delivered through Walmart’s “site to store” shipping program § $1.7 Billion: Walmart.com’s estimated annual sales § $19.2 Billion: Amazon.com’s last year’s annual sales § 5%: total e-commerce share of American retail spending Source(s): WSJ, NYT As of December, 2009, some interesting data points related to Nokia and the mobile handset market. § 37% = Nokia’s global handset market share § 62% = Nokia’s handset market share in Middle East & Africa § 49% = Nokia’s handset market share in Eastern Europe § 42% = Nokia’s handset market share in Asia § 4% = Nokia’s smartphone market share in North America § 51% = RIM’s North America Smartphone market share § 30% = Apple’s North America Smartphone market share § 15 phones/second = Nokia’s worldwide sales velocity § 10% = Global Phone Market Growth § 1 billion = Nokia’s total customer base Source(s): NYT, Nokia, Gartner 2009 “Busiest Day of the Year” shipping day forecasts: § FedEx forecasts shipping 12 million packages on its busiest shipping day § U.P.S. forecasts shipping 22 million packages on its busiest shipping day (Dec. 21) § The USPS forecasts shipping 830 million pieces of mail on its businest shipping day; and forecasts 2009 shipment totals at 16.6 billion total pieces Source(s): NYT, FedEx, U.P.S. § No, according to SuperFreakonomics referenced data § Homes sold on FSBOMadison.com were sold for the same price by Realtors. § The difference in commission on a $500,000 home was $24,500 ($500 with FSBO vs. (5% or $25,000 with a Realtor) § On average, homes stayed on the market 20 days longer when marketed via FSBO Source(s): SuperFreakonomics | Author@RayBordogna opines about economics, finance and business trends. 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