Friday Fast Five - 6/7/2024
by Hodges Investment Team, on June 7, 2024
Five interesting things that Hodges Capital research analysts discovered this week...
#1 AIR MILES: According to the Associated Press, over 2.9 million travelers were screened at U.S. airports on Friday, May 24th, surpassing a previous record set last year on the Sunday after Thanksgiving. Atlanta, the world's busiest airport, had its busiest day ever on Thursday, May 23rd when 111,000 passengers went through security checkpoints. U.S. airlines expect to carry a record number of passengers this summer, estimating 271 million travelers will fly between June 1st and August 31st#2 CONCENTRATION: Strategas highlights the growing influence of Nvidia, which has led to two significant developments.
First, the 5 largest S&P 500 weights have reached a new high, exceeding 27% for the first time in the 44 years of available data. Second, the overall influence of Semiconductors has also hit a new high, climbing to over 11% from a mere 2% a decade ago. This data underscores the increasing concentration, with the largest Large-Cap Growth ETFs now allocating almost 60% of their assets to the top 10 holdings.
#3 PAIN IN THE WALLET: The Daily Upside draws attention to the growing impact of inflation on the average American's budget. The increase in inflation means that the average American now needs an extra $1,000-plus a month to afford the basics compared to three years ago. Strategas Securities Common Man CPI, which focuses on items that people must buy regularly, grew at 3.8% y/y in April, the ninth consecutive month it has exceeded the headline inflation number. This index has also outpaced the headline number in 34 of the 40 months of the Biden Administration, indicating a sustained trend. Of particular concern is the fact that the cost of daily essential needs continues to outpace wage growth, putting further pressure on households.
#4 AGING VIEWERS: The median age of linear TV viewers has significantly increased, according to Hedgeye and The Wall Street Journal. Linear TV, also known as traditional broadcast TV, has long sought shows that appeal to the 18 to 49 age brackets but are now pitching advertisers on the merits of an older audience. Younger Americans are flocking to streaming services, and linear TV channels are left with increasingly older audiences. The median age of MTV viewers is 51, CBS 64, ABC 66, CNN 67, Fox News 69, and MSNBC 70. The good news is that Boomers have more disposable money than younger generations and are less price-sensitive.
#5 EV INFRASTRUCTURE: Several recent laws, including the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act, have sought to encourage the development of electric vehicle infrastructure and increase the adoption of electric vehicles (EVs). A Pew Research Center survey paired with an analysis of U.S. Department of Energy data finds that roughly six in ten Americans now live within 2 miles of a public charge. There were over 61,000 publicly accessible electric vehicle charging stations in the United States as of February 2024. EV charging stations are most accessible to residents of urban areas: 60% of urban residents live less than a mile from the nearest public EV charger, compared with 41% of those in the suburbs and just 17% of rural Americans.
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