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

#1 EARNINGS SEASON: The first-quarter earnings season is underway, and energy and materials are expected to be the two strongest sectors. According to Strategas, sales growth for the energy and material sectors are estimated at 45.8% and 19.9%, respectively.  

#2 HOUSING INFLATION: According to Zillow's surveys, home prices increased by 20%, and rent prices rose 15% over the 12 months ending in January 2022. However, the consumer price index (CPI), which relies on monthly surveys, housing inflation rose only +4.1% for homeowners and +3.8% for renters over the same period. Some economists predict that as current housing inflation becomes better reflected in the government's data in the second half of this year, it could add a whole percentage point to the overall CPI.

#3 EUROPEAN STEEL: A recent report from Morgan Stanley estimates that Ukraine has temporarily lost up to 40% of its overall steelmaking capacity due to damage caused by the shelling of Mariupol over the past three weeks. As a result, Polish steel mills are struggling to keep up with demand as much of Europe has experienced declining inventories of certain steel products such as rebar.  

#4 PRICEY EASTER EGGS: Cases of highly pathogenic avian influenza have led to the deaths of more than 17 million birds, according to U.S. Agriculture Department. The virus outbreak is the worst in seven years and is estimated to have resulted in more than 11 million egg-laying chickens, roughly 3% of the total U.S. flock, having died or been destroyed due to the disease.    

#5 MORTGAGE DEMAND: Last week, mortgage rates surged, driving down demand for home loans. The Mortgage Bankers Association reported the 30-year fixed-rate mortgage saw its largest one-week rate jump in 11 years. As a result, refinance applications fell 15% week over week and were down a whopping 60% from a year ago.

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