Five interesting things that Hodges Capital research analysts discovered this week...
#1 AN UNHEALTHY BITE OUT OF THE PAYCHECK: Theburden of healthcare spending on working families continues to rise ashealthcare inflation outpaces overall inflation. A recent analysis from theCenter for Economic Policy and Research found that the share of workingfamilies spending more than 10% of their income on healthcare has climbed to13%. The lowest income quartile is worst off, spending an average of 22% ofincome on healthcare.
#2 THE 1980s CALLED: The iShares Silver Trust fellroughly 28% in a single day, marking its worst one-day decline on record—farexceeding any single-day drop during the infamous 1980s Hunt Brothers silvercrash, when losses peaked around 15%. The selloff appeared to be driven by aperfect storm: President Trump’s nomination of Kevin Warsh (a hawkish signal),a spike in the dollar, profit-taking after extreme highs (silver was still thebest-performing asset class in January), margin calls and leveraged positionunwinds, and a repricing of interest-rate expectations.
#3 OVERDOSES DECLINE ACROSS THE UNITEDSTATES: Drug overdose deathsfell sharply over the past year, according to new data from the Centers forDisease Control and Prevention. The CDC reported a 20.6% decline, the largestdrop in decades. This marks a reversal after deaths began rising in the 1990s withopioid painkillers, followed by waves driven by heroin and fentanyl. Analystspoint to several contributing factors, including crackdowns on Chinese fentanylsupply, changes in opioid prescribing practices, wider naloxone availability,and improvements in treatment.
#4 GOOD NEWS IN THE ECONOMY: The U.S. January ISM ManufacturingIndex came in at 52.6, its highest reading since 2022. The ISM Employment Indexrose to 48.1 from 44.8 in December, the strongest level in a year. New orderssurged from 47.4 in December to 57.1 in January, the highest since February2022.
#5 PJM POWER PRESSURES: PJM, the regional grid operatororiginally formed by Pennsylvania, New Jersey, and Maryland in 1956, now runselectricity markets across 13 states and Washington, D.C. As AI data centersdrive rapid growth in electricity demand, residents are increasingly concernedabout outage risks and higher household power costs. The White House and 13governors have proposed a solution: urging PJM to hold power auctions with15-year contracts—rather than the current one-year terms—allowing tech companiesto fund new power plant construction so data center operators, not consumers,pay for their own power needs.
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