Specialty Capital News & Views: May 15, 2024

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Today we saw the much anticipated April Inflation report with CPI easing at 3.4%. While the data print came in line with expectations and lower than last month, consumer prices continue to be elevated above the FED’s 2% bogie. On a positive note, core inflation came down to 3.6% which is the lowest reading since April 2021.

Stock futures are up and treasury yields have come down as rate futures markets are showing an increasing probability of a rate cut in September. We wouldn’t get too excited with these numbers. Prices are still elevated, especially for food stuff and gas. What is troubling is that shelter costs remain stubbornly high. In our past write ups, we discussed how shelter (as a leading indicator) can drive down inflation but this has not happened.

We also had a retail sales print showing that consumers aren’t spending as inflation continues hurting their pockets. Forecasts were for a 0.4% increase but they were unchanged from March. The two previous months were also revised downwards, but YoY spending is up a tad.

We continue to see files in the trucking SIC come in and more and more we hear that no one is offering on this SIC. We are pretty selective on these files but are open minded depending on time in business, cash flow and jurisdiction. Our sweet spot remains the specialty contractor SIC, we love hearing their stories.

We’ve seen an influx of funeral homes asking for financing. We’ve spoken to a handful and they all say the same thing – Covid they grew operations as there were lots of deaths but a lot less people are dying now and they cannot sustain their operations.

Submission quality this month has been far better across the board with higher offer rates. We will be attending Broker Fair next week as a Sponsor, come say hi.

Happy Funding!

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Specialty Capital News & Views: May 15, 2024

Today we saw the much anticipated April Inflation report with CPI easing at 3.4%. While the data print came in line with expectations and lower than

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