Jason Colodne of Colbeck Capital – Aug. 28 Market Rewind

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Investors had mixed reactions to last week’s manufacturing and other news, which made for a volatile series of days in the stock market, says Jason Colodne, co-founder of Colbeck Capital Management, an NYC-based private credit asset management organization focused on strategic lending.

Economic Snapshot

Following several months of increases, the amount of new manufactured durable goods orders in July was virtually unchanged from June, according to U.S. Census Bureau data released last week.

July’s orders totaled $273.5 billion, which is the same as the revised amount from June. Excluding transportation and defense, the amount of new durable goods orders last month increased 0.3% and 1.2%, respectively.

On Friday, income-related findings released by the Bureau of Economic Analysis revealed both personal income and disposable personal income rose 0.2% in July. 

The personal consumption expenditures index — which measures the change in consumer-purchased goods and services — fell 0.1%. Excluding food and energy, the index was up 0.1%. 

Separate data the Census Bureau published on Tuesday showed new single-family house sales in July were 12.6% below June’s revised rate — and 29.6% less than in July 2021. 

New homes sold at a median sales price in July of $439,000. As of last month, 464,000 new houses were available, according to the Census Bureau’s seasonally adjusted estimate, which equates to a 10.9-month supply at the current sales rate.

Recent Market Activity 

No index was spared from the daily swings that took place leading up to the speech Federal Reserve Chairman Jerome Powell made on Friday — an event that will undoubtedly continue to influence the investment climate next week.

On Monday, the S&P 500 tumbled 2.14%, and then declined 0.2% the following day. On Wednesday, however, the index rose 0.29%; it then gained 1.41% on Thursday — only to tumble 3.37% on Friday, according to initial results posted after the market closed.

The Nasdaq composite index shed 2.55% on Monday, and on Tuesday, experienced a smaller decline of less than 0.1%. Midweek, the Nasdaq rose 0.41%, then fell 0.52% on Thursday — and dropped 3.94% on Friday.

The Dow Jones Industrial Average sank 1.91% on Monday, followed by a 0.5% drop on Tuesday. By Wednesday, though, the Dow’s trajectory was headed upward with a 0.18% increase. The index also rose on Thursday by 0.98%, but finished the week with a 3.03% slide.

The yield on the benchmark 10-year Treasury note reached 3.031% — the first time it surpassed 3% since July — on Monday, and the yield on the 30-year Treasury bond rose to 3.235%, reportedly in anticipation of Powell’s upcoming comments.

Midweek, the 10-year Treasury note yield rose to 3.111%; yet on Thursday, the day before Powell’s speech, it went back to 3.031%.

In other investment news, private equity-related trade sales declined 21% from June 2021 to June 2022, and exits involving secondary sales dropped 45% — yet tactical sales to key parties occurred, according to a recent S&P Global Market Intelligence analysis.

In the first two quarters of this year, S&P said, private equity-backed IPO activity within the major U.S. exchanges also showed a significant decline.

About Jason Colodne

Jason Colodne is the senior transaction partner at Colbeck Capital Management and oversees all aspects of investment execution and portfolio management. Colodne co-founded Colbeck Capital Management as a managing partner in 2009. Colodne’s investment experience spans over two decades.

About Colbeck Capital Management

Colbeck Capital Management (colbeck.com) is a leading, middle-market private credit manager focused on strategic lending. Colbeck partners with companies during periods of transition, providing creative capital solutions. Colbeck sponsors its portfolio companies through consistent engagement with management teams in areas such as finance, capital markets and growth strategies, distinguishing itself from traditional lenders. The firm was founded in 2009 by Jason Colodne and Jason Beckman; the principals have extensive experience investing through different market cycles at leading institutions, including Goldman Sachs and Morgan Stanley.