Jason Colodne of Colbeck Capital – June 5 Market Rewind


Employment-related information released last week suggests inflation continues to be a challenge — with personal expenditures, which are higher than a year ago, making a dent in the amount of money consumers have to spend, says Jason Colodne, co-founder of Colbeck Capital Management, an NYC-based private equity asset management organization focused on strategic lending.

Economic Snapshot Personal income increased by 0.4% in April, according to the most recently released Bureau of Economic Analysis estimate, and disposable personal income (DPI) — essentially the amount someone earns, adjusted for taxes — increased 0.3%.

However, consumer spending is also up. Personal consumption expenditures (PCE) grew 0.9% in April. The PCE price index has risen 6.3% from its level last year at this time, due to an increase in goods and services, including energy and food prices. Adjusted for inflation, DPI increased less than 0.1% for the month, and PCE increased 0.7%. The Bureau of Labor Statistics employment situation report released last week showed jobs increased by 390,000 in May, with the unemployment rate remaining unchanged at 3.6% for the third month in a row. The number of unemployed Americans, 6 million, was up slightly from April. Considerable job gains occurred in several sectors, including leisure and hospitality, professional and business services, and transportation and warehousing, while retail employment declined. Earlier in the week, BLS published additional labor data that showed the number of job openings had declined by the end of April to 11.4 million. The hiring rate for the month was 4.4%, virtually the same as in the previous month, and the total number of quits, layoffs and discharges was similarly unchanged at 6 million. Recent Market Activity Due to the Memorial Day holiday, last week only consisted of four business days, but the market packed plenty of activity into the shortened time frame. The S&P 500 dropped 0.6% on Tuesday, and on Wednesday shed 0.8%. On Thursday, though, the S&P experienced a 1.8% rise, closing out the week with a 1.63% loss, according to Friday’s initial market results. The Nasdaq composite index declined 0.4% on the first day of trading in the week, followed by a 0.7% drop on Wednesday. The Nasdaq rose on Thursday, escalating 2.7%, yet on Friday, it slid 2.47%. The Dow Jones Industrial Average, after a 0.7% decline on Tuesday, lost 0.5% on Wednesday. By Thursday, though, the Dow was back on the upswing, rising 1.3%. On Friday, the index shed 1.05%. At the start of the week, the benchmark 10-year U.S. Treasury yield rose 12 basis points, reaching 2.871% in the late afternoon. On the last day of trading for the week, the benchmark 10-year yield settled at 2.95% after earlier rising to 2.99% In other investment news, banks report the demand for commercial and industrial (C&I) loans in the first quarter of 2022 appeared to be stronger, and an increased number of borrowers inquired about new credit line availability and terms, or asked about increasing existing lines, according to the Federal Reserve’s April senior loan officer bank lending practices opinion survey. C&I loan standards were relatively unchanged during the month, according to the survey findings, after being eased during the prior four business quarters. 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. 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.

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