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Hodges Friday Fast Five

"In the investment business, you go to school every day, but never graduate." - Don Hodges

Friday Fast Five - 4/8/2022

by Hodges Investment Team, on Apr 8, 2022 8:00:00 AM

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

#1 EARNINGS SEASON: The first-quarter earnings season is underway, and energy and materials are expected to be the two strongest sectors. According to Strategas, sales growth for the energy and material sectors are estimated at 45.8% and 19.9%, respectively.  

#2 HOUSING INFLATION: According to Zillow's surveys, home prices increased by 20%, and rent prices rose 15% over the 12 months ending in January 2022. However, the consumer price index (CPI), which relies on monthly surveys, housing inflation rose only +4.1% for homeowners and +3.8% for renters over the same period. Some economists predict that as current housing inflation becomes better reflected in the government's data in the second half of this year, it could add a whole percentage point to the overall CPI.

#3 EUROPEAN STEEL: A recent report from Morgan Stanley estimates that Ukraine has temporarily lost up to 40% of its overall steelmaking capacity due to damage caused by the shelling of Mariupol over the past three weeks. As a result, Polish steel mills are struggling to keep up with demand as much of Europe has experienced declining inventories of certain steel products such as rebar.  

#4 PRICEY EASTER EGGS: Cases of highly pathogenic avian influenza have led to the deaths of more than 17 million birds, according to U.S. Agriculture Department. The virus outbreak is the worst in seven years and is estimated to have resulted in more than 11 million egg-laying chickens, roughly 3% of the total U.S. flock, having died or been destroyed due to the disease.    

#5 MORTGAGE DEMAND: Last week, mortgage rates surged, driving down demand for home loans. The Mortgage Bankers Association reported the 30-year fixed-rate mortgage saw its largest one-week rate jump in 11 years. As a result, refinance applications fell 15% week over week and were down a whopping 60% from a year ago.

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Hodges Private Client is a program offered through Hodges Capital Management, Inc. (“HCM”). HCM is an Investment Advisory Firm registered with the Securities and Exchange Commission (“SEC”), is a wholly owned subsidiary of Hodges Capital Holdings and serves as investment advisor to the Hodges Funds. HCM is affiliated with First Dallas Securities, Inc, a broker-dealer, and investment advisor registered with the SEC.

This discussion is not intended to be a forecast of future events and should not be considered a recommendation to buy or sell any security. Past performance is not indicative of future results. Investing involves risk. Principal loss is possible. Investing in smaller companies involves additional risks such as limited liquidity and greater volatility. No current or prospective client should assume that information referenced in this communication is a recommendation to buy or sell any security or is a substitute for personalized investment advice from your individual advisor. HCM does not provide tax or legal advice. Consult your tax or legal advisor for any related questions.

All information referenced herein is from sources believed to be reliable and is provided as general market commentary and does not constitute investment advice. This material was created for informational purposes only and the opinions expressed are solely those of HCM. HCM shall not in any way be liable for claims and makes no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information. The data and information are provided as of the date referenced and are subject to change without notice.

Hodges Friday Fast Five

We aim to help investors separate the news from the noise by providing our perspective. Every Friday the Hodges Private Client research analysts list the five most interesting things they discovered that week. Subscribe to receive the Hodges Friday Fast Five in your inbox every Friday. 

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