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

#1 U.S. CONSUMERS: A recent report published by Deutsche Bank highlighted that U.S. households' cash now exceeds households' debt for the first time in three decades. Although there is a clear distributional bias among upper-end consumers, negative net debt could fuel consumption in the wake of higher interest rates and inflationary pressures.

#2 WHERE ARE THE BULLS? Recent sentiment indicators have shown that individual investors have become much more defensive. Last week, the number of bullish investors in the AAII survey fell to a 30-year low, below where it was during the pandemic or the global financial crisis. Such bearish positioning could be a bullish contrarian signal for markets over the next twelve months.

#3 HOME SALES: U.S. existing home sales fell 2.7% month-over-month to 5.8 million units, representing the lowest level since June 2020. The National Association of Realtors expects home sales to contract by 10% this year as rising mortgage rates and inflation adversely impact purchasing power.  

#4 NAT GAS: Last week, Bromander reported that domestic natural gas storage levels were 18% below the five-year average. Lower inventories could support higher prices as the Russia-Ukraine war increases demand for U.S. liquefied natural gas (LNG) exported to Europe.

#5 COPPER INTENSITY: According to the International Copper Association, long-term demand for copper appears to be supported by renewable energy, which uses 4-5X more copper than fossil fuel power generation. In addition, more than 65% of the world's copper is used in applications that deliver electricity.

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