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

#1 INFLATION AND HSAs: As Kiplinger reported, the IRS announced record-high HSA (Health Savings Account) contribution limits for 2024. Individuals can contribute up to $4,150 to their HSA accounts for 2024, and families can contribute up to $8,300. According to a HealthEquity study, 62% of people stay with their employer due to a competitive benefits lineup. High Inflation is top of mind for employees, as well as the trend for higher deductible health plans. A way to alleviate some of this mounting financial strain on employees is their employer benefits offerings, specifically tax-advantaged HSAs.

#2 KEEPING AN EYE ON AI: In response to concerns about the risks of artificial intelligence (A.I.) systems, the Biden administration has initiated a requirement for developers of major A.I. systems to disclose their safety test results to the government. This development is part of the comprehensive approach outlined in an executive order signed by U.S. President Joe Biden aimed at managing the rapidly evolving A.I. technology landscape of A.I. Some investors and technology experts warn overstepping on the regulatory front poses risks that the U.S. will fall behind China in the A.I. race.

#3 THE THREAT FROM WITHIN: News reports often highlight cyber security and ransomware attacks on companies from bad actors from the outside, yet a report titled “The Great SaaS Data Exposure” released by cyber security company Varonis suggests companies have an alarming amount of sensitive data exposed to employees and contractors. The data collected from company engagements worldwide reveals the extent of exposure associated with companies storing critical data in the cloud without proper precautions. Here are a few statistics: 81% of organizations had sensitive SaaS data exposed, 10% of cloud data exposed to every single employee, and 6% of cloud data exposed to the entire internet.

#4 BANK FEES: Approximately 23 million households pay overdraft fees in any given year that amount to typically a $35 charge for an overdraft loan, even though most consumers’ debit card overdrafts are for less than $26 and repaid within three days. This week, the Consumer Financial Protection Bureau (CFPB) proposed a rule to close an outdated loophole (Truth in Lending Act) to rein in excessive overdraft fees charged by the nation’s most prominent financial institutions.

#5 DEBT HOCKEY STICK: Data published by the Treasury Department showed that the national debt, the total amount of outstanding borrowing by the U.S. federal government accumulated over the nation’s history, rose to $34.001 trillion on December 29, 2023. Taxpayers and Politicians are skating on thin ice as that figure has been growing by about $1 trillion every six months over the last six years. For context, it took roughly 232 years for the U.S. to accumulate its first $10 trillion in debt, nine years to add its second $10 trillion, and the third trillion in just five years. The last trillion was tacked on in less than four months.

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