Five interesting things that Hodges Capital research analysts discovered this week...
#1 CREDIT CARD DEFAULTS: U.S. credit card defaults rose to $46 billion in 2024, nearly doubling from early 2023 and reaching the highest level since 2010, according to data from the Financial Times and BankRegData.
#2 EARNING SEASON SIZZLE: With the fourth-quarter earnings reporting season nearly complete, this recent quarter has delivered one of the strongest growth rates since the COVID-19 pandemic. According to Strategas, S&P 500 earnings grew 16.9% year-over-year, with financials leading the way at 35% growth. Energy was the only sector to decline compared to a year ago.
#3 ROADBLOCKS AHEAD FOR MEXICO: The recent tariffs imposed by the Trump administration have been delayed by 30 days for auto manufacturers, but they could significantly shift auto production away from Mexico over time. Currently, Mexico accounts for 27% of passenger vehicles assembled in North America, up from roughly 19% a decade ago, according to S&P Global Mobility.
#4 AI ANXIETY: A recent Prosper Insights & Analytics survey found that about 58% of respondents are concerned about how personal data is collected and used in AI. Additionally, 37.8% emphasize the need for human oversight to ensure responsible AI applications, 34.2% are worried about AI hallucinations or the generation of false information, and 29.1% express anxiety about automation replacing human roles.
#5 TRADE DEFICITS: According to The Wall Street Journal, U.S. trade deficits grew by 34% in January, with imports rising 10% to $401.2 billion and exports increasing 1.2% to $269.8 billion. Imports of industrial supplies and materials grew by $23.1 billion, consumer goods imports rose by $6 billion, and capital goods such as computers, computer accessories, and telecommunications equipment increased by $4.6 billion.
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