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

#1 HOTEL BOOKINGS: Although hotel bookings are up from a year ago, the World Tourism Organization has reported that year-to-date hotel bookings through October 2021 compared to 2019 pre-pandemic levels for the same period were -26% in the Americas, -70% in Europe, and -56% in Asia Pacific.

#2 HOME BUILDING: Recent conversations with several national homebuilders have indicated that labor remains a significant challenge and will likely remain tight in 2022. Furthermore, suppliers are starting to get materials under control, but windows and garage doors are still in short supply.

#3 PETRO CHEM: There are $150 billion of new investments in U.S. petrochemical plants that are currently under construction or planned to be constructed over the next several years. Such capital investments could create future transportation demand for the inland barge business in North America, which has struggled since the industry peaked in 2015.  

#4 INTEREST RATE CYCLES: Last week's inflation reading of 6.8% may signal that higher interest rates could be in store for 2022. According to a study published by Credit Suisse analyzing the past four interest rate cycles ('94, '99, '04,' 15), the S&P 500 gained 9.5% in the twelve months leading up to the first rate hike and increased 26% over the subsequent three years.  

#5 RAILROADS: Last week, U.S. and Canadian rail volumes were tracking 7% below where they would normally be at this time of year, according to the Association of American Railroads. Chemicals were the only major category above pre-pandemic levels. Declines were seen in intermodal (-5%), automotive (-21%), food and ag (-2%) and energy, including coal, (-17%).

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