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

#1 TAXES AND EARNINGS GROWTH: Over the last 90 years, the corporate tax rate has been changed by many administrations, but the long-run EPS trend has consistently hovered around a 6.5% annual growth rate, according to Deutsche Bank.

#2 LEADING ECONOMIC INDEX: The Conference Board’s Leading Economic Index slid 0.5% to 99.7 in September. This marks a new low in the current business cycle and was driven by weakness in factory new orders, a still-inverted yield curve, declining building permits, and consumers’ tepid outlook for future business conditions.

#3 PRESIDENTIAL RETURNS: Deutsche Bank recently analyzed the annualized S&P 500 total return for each U.S. President back to Teddy Roosevelt in 1901. Thirteen of the last fifteen Presidents have presided over annualized returns of 10-17%, and seven of the last nine have been in the 14-17% range. Outside of a few significant outliers (e.g., the Great Depression, the 1973 oil shock, the post-2000 bubble unwind, and the Great Financial Crisis), most Presidents have benefited from a long period of U.S. exceptionalism and double-digit annual equity returns.

#4 ELECTRICITY DEMAND: Data centers are projected to account for 44% of U.S. electricity load growth by 2028. This far surpasses the projected load growth of residential (27%), manufacturing (17%), and commercial (13%), according to RBC Wealth Management.

#5 FARM INCOME: The USDA projects that farm income will have the lowest margins for farmers in two decades, following lower crop prices and higher input costs. Farm income is expected to fall by 7% this year, following a 19.5% decline last year.

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