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

#1 FOURTH QUARTER: 4Q21 expectations are for revenue and earnings per share growth of 13.1% and 20.9% for the S&P 500, respectively. The market expects more than half of the earnings growth to come from Cyclicals. – Credit Suisse

#2 TRUCKLOAD RATES: We’ve learned that the recent surge in January truckload freight rates reflects higher diesel fuel prices, shift to truckload from intermodal due to rail issues, higher than normal product returns, and accelerated shipping ahead of Chinese New Year and the Olympics.    

#3 INTEREST RATES: The market foresees a 25-basis point increase for the federal funds rate in March. By the end of the year, the market prices in between four and five 25 basis point hikes by the Federal Reserve. – Cornerstone Macro      

#4 HOMEBUYERS: “We also look at our studio revenues and lot premiums, which we view as discretionary spending for our buyers. We would expect to see a decline if buyers are stretched, but studio revenues and lot premiums have increased even as base prices have risen. On a combined basis, buyers spent about $48,000 per home in these two categories in 4Q21. Finally, and perhaps most importantly, is the credit profile of our buyers. Their average FICO score in the quarter was 732, an all-time high. In addition, about 2/3rds of our buyers qualified for a conventional mortgage, and our buyers overall are averaging a down payment of over $67,000.” - Jeffrey Mezger, Chairman and CEO of KB Home

#5 LUXURY FASHION: “Our job is to make watches that connect to the heart, not to phones.” - Efraim Grinberg, CEO of the Movado Group

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