Five interesting things that Hodges Capital research analysts discovered this week...

#1 ANOTHER STRONG QUARTER: The fourth-quarter reporting season wrapped up last week for the S&P 500, which turned out to be another strong quarter. According to an analysis provided by Strategas, earnings growth came in north of 30% and revenue growth approached 15%.  

#2 THE MAGIC NUMBER: “The magic number is 90%. When oil prices go up 90% over a 10-to-12-month period, the U.S. has a recession,” according to Nicholas Colas, co-founder of DataTrek Research. West Texas Intermediate (WTI) crude oil prices are up approximately 75% year-over-year.

#3 ULTRA-WEALTHY: The number of Ultra-High-Worth Individuals, those with $30 million or more in net assets, grew 9.3% to 610,568 last year, according to an analysis by Knight Frank. North America led the charge, growing 11.2% to 233,590 Ultra-High-Worth Individuals.

#4 HOUSING DEMAND: “One fact I’d like to remind you of is that there are currently more single-family homes under construction across the country than there have been in more than 14 years, and the homebuilder backlog is currently at the highest level it’s been in the last 15 years. Backlogs, in fact, were an estimated 145,000 single-family units authorized but not yet started as of last month, up 32% year-over-year, an encouraging sign of continued demand strength.” – David Flitman, CEO of Builders FirstSource

#5 MACRO HEADWINDS: “For the first half of 2021, the macro environment was a tailwind with government relief programs pushing expenditures on consumer durables and favorable payment behavior to levels that were above historical averages. In the latter portion of the year, the macro environment shifted to a headwind. Government pandemic relief programs that have supported higher rates of consumer spending ended, and in addition, supply chain disruptions and a significant uptick in inflation, diminished consumers’ ability to access and afford products.” – Mitchell Fadel, CEO of Rent-A-Center  

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