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

#1 So You’re Telling Me There’s a Chance? According to Fannie Mae calculations, it would take one of three things, or a combination of them, for affordability to return to 2016-2019 levels: The median price of a single-family home would need to fall 38% to $257,000 from September’s $414,340; median household income would have to rise more than 60% to $134,500; or the mortgage rate would need to fall to 2.35% from roughly 6.5%. (Bloomberg)

#2 Amazoning Performance: “AWS (Amazon Web Services) grew 19% year-over-year and now stands at a $110 billion annualized revenue run rate. The business continues to grow, and we see opportunities to expand both our core cloud offering and AI services. AWS's AI business is a multibillion-dollar revenue run rate business that continues to grow at a triple-digit year-over-year percentage. Over 40 million customers this past quarter had their orders delivered for free with same-day delivery, an increase of more than 25% year-over-year.” (Andrew Jassy – CEO of Amazon.com)

#3 Call a Professional: Strategas compared the annual S&P 500 performance since 2000 with the percentage of active managers outperforming the index each year. They observed that when markets have been stronger, the percentage of managers outperforming has tended to be lower. Conversely, when the broader market is choppy or down, active managers have tended to be better positioned to help inoculate portfolios against the worst of it. (Strategas – A Baird Company)

#4 Active Shift: Global allocation strategies using no active ETFs declined by 37 percentage points from 2020 to 2023, to about 30%. Meanwhile, the weighted average share of active ETFs in global allocation strategies has risen to 11%. (Trackinsight)

#5 In Need of An Ally: Russ Hutchinson, Ally Financials’ CFO, said that in the post-pandemic period — 2022 in particular — consumers flocked to buy cars when used-auto prices were elevated, saddling themselves with bills at a time when they had yet to realize the full impact of soaring inflation. While those borrowers still have jobs, he said, they’re grappling with stiff loan payments on top of rising car-ownership costs. “We’ve put a lot of curtailment on the underwriting side over the last 18 months. Auto credit is stabilizing, and we expect it to get better.” (Bloomberg)

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