Friday Fast Five - 7/15/2022
by Hodges Investment Team, on Jul 15, 2022 7:00:00 AM
Five interesting things that Hodges Capital research analysts discovered this week...
#1 WALKING AWAY: Some 60,000 would-be homebuyers walked away from their sale agreements last month, equivalent to nearly 15% of all contracted purchases in the U.S. That’s the highest such share since the depths of the Covid panic in April 2020 and compares to 11% of would-be buyers that cancelled in June 2021 according to Grant’s Interest Rate Observer.
#2 AFFORDABILITY CONCERNS: Also from Grant’s Interest Rate Observer, the median-priced home chewed up 31.5% of the average U.S. wage during the second quarter. That’s the highest such share since the 2007 housing bubble and up sharply from 24% a year ago.
#3 FOREIGN CURRENCY: Per Strategas, nearly 40% of all revenue of the S&P 500 is derived from outside the United States. With the dollar index reaching a 20-year high relative to most major currencies, a stronger dollar is likely to put downward pressure on sales and earnings due to foreign currency translation effects.
#4 CAR LOANS: The average monthly payment on a new car loan hit a record high of $686 in June, according to new data from auto sales site Edmunds, up 4% from January and 13% year-over-year.
#5 GEN Z: According to WGSN, luxury spending is on the rise as Gen Z is demanding more from brands due to their buy-better/buy-less mindset and their appetite for experiences. Gen Z has roughly $143 billion in spending power and is expected to make up 40% of global consumer spending by 2035.
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.