Encouraging U.S. jobs-related statistics, and a look at the executive branch’s view of what the country’s economic future could look like, helped shape investment activity this week, says Jason Colodne, co-founder of Colbeck Capital Management, an NYC-based private equity asset management organization focused on strategic lending.

The following research updates and other news items were some of the week’s highlights.

Economic Snapshot

Nonfarm payroll employment rose by 678,000 in February, a 197,000 increase from January’s revised 481,000 total — and the unemployment rate decreased to 3.8%, according to U.S. Bureau of Labor Statistics data released last week.

Job growth was led by gains in the leisure and hospitality, professional and business services, health care, and construction sectors.

The number of unemployed persons decreased to 6.3 million in February. Before the COVID-19 pandemic, in February 2020, there were 5.7 million unemployed persons, and the unemployment rate was 3.5%.

Payroll services provider ADP also released the latest version of its monthly National Employment Report on Wednesday, which suggested private sector employment had increased by 475,000 jobs from January to February.

The report, which the ADP Research Institute produces in collaboration with Moody’s Analytics, also said small business employment, which had decreased by 144,000 in January, declined by 96,000 last month. U.S. franchise employment, however, rose by 45,000 in February after increasing by 1,600 the month before.

Hiring, while robust, is still being impeded by the reduced labor supply, according to ADP chief economist Nela Richardson, who noted small companies were struggling to offer the desired wages and benefits to attract workers — yet large companies’ February performance, Richardson said, marked “the strongest reading since the early days of the pandemic recovery.”

President Joe Biden also delivered his first State of the Union address on Tuesday, which touched on a number of topics ranging from the COVID-19 pandemic to the current situation in Ukraine. Biden pointed out that despite a difficult two years, the U.S. economy created more than 6.5 million new jobs last year and experienced its strongest growth rate in four decades.

Expressing an economic vision that encompassed infrastructure updates, increased U.S. manufacturing, and an emphasis on educational opportunities and workforce growth.

Recent Market Activity

Stocks, as The New York Times recently noted, have experienced some turbulence in the past several weeks as Ukraine braced for a possible invasion and subsequent sanctions were placed on Russia.

The continued conflict in the region — coupled with Federal Reserve Chair Jerome H. Powell telling Congress on Wednesday he’s in favor of the Fed making a quarter-point interest rate increase this month — had an effect on the market in the initial days of March.

The S&P 500 started the week by shedding 0.2% on Monday and 1.6% on Tuesday. Like the other two major indexes, the S&P 500 had a strong Wednesday, increasing 1.9% by close. On Thursday, however, it declined 0.5% and on Friday the index was down 0.8% by the end of the day.

The Nasdaq Composite Index rose 0.4% on Monday but fell 1.6% on Tuesday. By Wednesday, the Nasdaq was again on the rise, climbing 1.6%; however, its recovery was short-lived. On Thursday, the index fell 1.6%, and it lost 1.7% on the final day of the week.

The Dow Jones Industrial Average dropped 0.5% on Monday, followed by a second, more severe decline on Tuesday, when it dropped 1.8%. After rising 1.8% on Wednesday, the Dow tumbled 0.29% on Thursday — and was down 0.5% on Friday.

Treasury yields had a similarly erratic week. On Wednesday, the yield on the benchmark 10-year Treasury note experienced its biggest one-day increase since 2020, registering an 18-basis-point rise. The yield on the 30-year Treasury bond increased 15 basis points, reaching 2.26%.

By Friday, as investors continued to focus on volatility-adverse assets, Treasury yields declined, with the yield on the benchmark 10-year Treasury note falling more than 10 basis points to roughly 1.73%, and the yield on the 30-year Treasury bond reaching 2.15%, a decline of approximately 7 basis points.

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.