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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 - 5/19/2023

by Hodges Investment Team, on May 19, 2023 7:00:00 AM

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

#1 TRUCKING RATES: The Stephens TL Rate Index, which measures truckload revenue per loaded mile excluding fuel, was down 3% year-over-year in the first quarter of 2023. This year's sluggish freight demand primarily reflects less retailer import volume, resulting in overcapacity in the truckload market.  

#2 FLAT BEER: The most recent Brewers Association's annual report indicated that 2022 craft beer production was flat at 24.3 million barrels, the first time the industry has not grown outside of the pandemic.    

#3 TIMBER: Lumber futures fell to a new three-year low last week, down more than 75% from its previous high to a low of $345 per 1,000 board feet. In North America, above-average inventory supply has recently outpaced demand due to uncertainty in homebuilding.      

#4 SOFT RAIL VOLUME: The association of American Railroad's traffic data indicated that U.S. railroad volume is down by more than 5% year-to-date, with the largest decreases coming from intermodal shipments, down more than 10%. Such volume declines in intermodal are consistent with a slowdown in consumer spending and higher retail inventories.        

#5 INTEREST RATES & UNEMPLOYMENT: According to Strategas, interest rate cuts when unemployment is below 4% are historically rare. Since 1971, there have been 124 instances where the Fed Funds Rate has been lower, and only six of those cuts have occurred with an unemployment rate of less than 4%. Although the market is pricing in further rate cuts by the end of 2023, history suggests that it could be unlikely without a weakening in the labor market.


                                                                    

 

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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