The market saw yet another volatile five-day period during the week of Jan. 17 to 21, with the continued unpredictability investors have experienced so far this year, says Jason Colodne, co-founder of Colbeck Capital Management, an NYC-based private equity asset management organization focused on strategic lending. The week included some of the following public and private sector-related news. Economic Snapshot The Census Bureau announced on Wednesday that in December, the number of building permits for privately owned housing units showed a 9.1% increase from November and a 6.6% year-over-year increase. Single-family home construction interest was also up 2%. Housing starts also showed an increase, clocking in at 1.4% higher in December than in November — and 2.5% higher than the December 2020 rate. The National Association of Home Builders/Wells Fargo Housing Market Index was also released during the week, with NAHB reporting inflation concerns and supply chain issues had quelled a four-month rise in builder sentiment. Builder confidence in the newly built single-family home market declined by a point to 83 in January, according to the latest index results, which the organization mentioned had generally hovered around 83 or 84 for the past few months. While consumer demand remains strong, inventory, according to the organization, is an issue, due to problems stemming from material availability and costs — which NAHB says have risen nearly 19% since December 2020 — delaying single-family home construction work. NAHB expects single-family home starts to be roughly 25% higher than their pre-pandemic levels, but noted higher interest rates in the coming year could affect housing affordability. U.S. retail and food services sales for December, released at the tail end of the prior week, showed a disappointing 1.9% drop from November — and a downward revision for that month. The revised percent change indicated retail and food services sales from October to November 2021 actually increased by 0.2%, not the 0.3% that was originally reported. Total sales for 2021, however, were up 19.3% from 2020, according to the Commerce Department. The Conference Board’s Leading Economic Index — which takes various factors into account, including weekly initial unemployment claims, manufacturing activity, and stock prices, to predict economic activity — increased 0.8% in December, according to recently released data, which was a slight increase from November’s 0.7% gain. Ataman Ozyildirim, t he Conference Board’s senior director of economic research, said in a statement that the findings indicate “the economy will continue to expand well into the spring.” Recent Market Activity With a Fed meeting, key earnings reports and new economic data — including updates on the fourth-quarter GDP and personal consumption expenditure inflation — due next week, the market showed signs of investor uncertainty in recent days. The S&P 500 generally trended downward, falling 1.8% at the start of the week and declining for three consecutive days in the latter portion. Although the index rallied somewhat on Thursday, the S&P ultimately closed 1.1% lower. Near the end of the day on Friday, at 4 p.m. ET, the S&P was down 1.9%. After kicking off the week with a 2.6% drop, the Nasdaq Composite fell more than 5%. On Tuesday and Thursday, the Nasdaq dropped more than 1%, and on Wednesday declined by nearly 1.3%, dropping again on Friday, by 2.7%. The Dow Jones Industrial Average didn’t fare much better this week. While it, too, showed signs of strengthening on Thursday morning, the Dow ended up falling 0.9% for the day — and essentially moved lower from last Friday’s close all week, shedding 450.02 points, an approximately 1.3% loss, on Friday. 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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