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

#1 CONSUMER SPENDING DOWNDRAFT: A recent report from Strategas highlighted that Visa’s U.S. spending momentum index in March posted its weakest reading (94.3) since May 2020. Although unfavorable weather and lower energy prices explain some of the softening in momentum, it was evident across all regions of the country in March.  

#2 DISPOSABLE CUP INNOVATION: Graphic Packaging (GPK) estimates that the U.S. market for foam and plastic cups is roughly 45 billion units annually. As a result, replacement demand for hot and cold beverage cups made from renewable fiber-based materials represents a new $2 billion market opportunity. Chick-fil-A, for example, has recently announced plans to transition from a foam beverage cup to a highly-insulated double-wall fiber cup.

#3 HIGHER EDUCATION: A recent Wall Street Journal-NORC survey indicated that 56% of American adults believe a four-year college degree isn’t worth the cost, slipping this year to a new all-time low.        

#4 RAILCAR DATA: According to the Railway Supply Institute industry backlog, railcars were down 6% sequentially in the first quarter of 2023. Although prevailing conditions for freight demand have become more uncertain in recent months, much of the decline reflects normal seasonality.  

#5 COMMERCIAL REAL ESTATE LOANS: A recent report from JPMorgan Private Bank highlighted that compared to big banks (+250 billion of assets), small banks have 4.4X exposure to U.S. commercial real estate loans.

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