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

#1 Nightmare on Wall Street: According to data from PSC Macro evaluating earnings reported thus far in this third quarter, companies from the tech, healthcare, and utilities sectors have reported the largest EPS (earnings per share) growth outperformance relative to expectations, while the energy and industrials sectors have been the biggest underperformers.

#2 Trick-or-Treat: In reaction to the earnings reports presented thus far, 2024 EPS estimates have held steady for large caps but have declined for mid and small caps. The sharpest decline in estimates has been in small caps, likely explaining the continued outperformance of small-cap stocks with positive earnings revisions and investors’ avoidance of small-cap stocks with the greatest earnings-estimate uncertainty. (Piper Sandler)

#3 Haunted Houses: September pending home sales gained 7.4% month-over-month (the fastest growth since 2020), beating the 1.9% expectation. The strong September showing suggests some upside to existing home sales in October. However, the level is likely to remain subdued as long as affordability remains extremely poor. The U.S. hypothetical monthly payment median for a single-unit home was $2,607 last month, up 135% since December 2019. (Piper Sandler)

#4 Witching Hour: U.S. consumer confidence increased in October by the most since March 2021, driven by optimism about the broader economy and the labor market. The Conference Board’s gauge of confidence jumped 9.5 points to 108.7, the highest level since the start of the year, according to data released Tuesday. The median estimate in a Bloomberg survey of economists called for a reading of 99.5. (Bloomberg.com)

#5 Full Moon Effect: October’s increase in confidence was broad-based across all age groups and most income groups. Consumers became more upbeat about the stock market: 51.4% of consumers expected stock prices to increase over the year ahead, the highest reading since the question was first asked in 1987. (The Conference Board)

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