Beyond the Arches #30: Economic indicators point to higher consumer confidence. Invest in startups that drive indexes and financial outlooks.

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The weather across the country has been heating up, but the inflation outlook finally looks to be cooling. As the markets head into earnings season and investors and consumers keep a watchful eye for September rate cut indicators, several favors point to near-term relief for interest rates. 

The inflation that has haunted markets for the last two years shows possible signs of returning to normal levels after the fourth straight month of cooling. The latest reports may help convince a cautious Federal Reserve to go forward with the first of several rate cuts that were proposed earlier this year. Policymakers have engaged in cautious optimism, and consumers have awaited signs that inflation is returning to its 2% target.

The Consumer Price Index (CPI) had more good news in June, reporting a 0.1% dip in consumer prices – the first time in four years that consumer prices declined. According to the U.S. Department of Labor, the CPI was flat in May. The CPI dip is a response to other improving economic conditions, such as lower gas prices and rent stabilization. 

The third leg of the economic table, job creation, is also showing improvements. The Labor Department reported adding 206,000 jobs for the month of June, which showcases the potential for stability despite high rates. Though not as robust as the 218,000 jobs reported for May, it is still a great indication of strength heading into the second half of 2024. 

How to invest in consumer-focused startups

A strong economy means more dollars in consumer pockets – and more confidence to spend it. Consumer goods like groceries and clothing offer a window into the mindset of most consumers. These startups offer opportunities for investors who are eager to enjoy the rising tide of current economic growth: 

• Porter Road: Meat and poultry prices are always a focus for consumers, but the quality and availability of these products also matter. Porter Road offers a “farm-to-fork” selection of meats through a proprietary supply chain and a convenient home delivery system. The brand focuses on pasture-raised, dry-aged beef, forested pork, and other high-quality products that support small farms.
• Slø: Fast fashion may be convenient, but its quality and the ecological and human impacts have many consumers thinking twice about how and where they source garments. Slø offers reimagined denim in a made-to-order model with over 500 possible size modifications. The company’s mission is to create sustainable, personalized, well-constructed denim clothing that’s built to last and create value for buyers. 
• Jingle: Do you miss the nostalgic thrill of the ice cream truck’s familiar chime? If only all your favorites could arrive the same way … right? Well, Jingle built its mobile store model on this very idea. The local marketplace and app give customers a way to connect with their favorite food trucks and request visits from vendors. And Jingle goes way beyond food, featuring everything from bakeries and artisanal dinners to mobile pet groomers to knife sharpeners.

On Our Radar This Week

• President Joe Biden ended his reelection campaign Sunday, backing Vice President Kamala Harris as the Democratic candidate. The exit comes after mounting calls for Biden to end his campaign in the wake of concerns about his debate appearance and ability to serve another four-year term. Although Harris is favored to become the nominee during the August Democratic National Convention, other contenders are emerging, leaving questions about the nomination process and the optics of moving on from a candidate selected in primaries.
• The fallout from CrowdStrike’s Microsoft update outage continues with thousands of flight cancellations and delays stretching into a fourth day. Millions of users across the finance, transportation, and healthcare sectors woke Friday to a dreaded “blue screen of death” event that brought operations to a halt. The outage sheds light on the integral nature of both companies and raises concerns that the two ubiquitous entities have the potential to wreak havoc in the event of issues or cybersecurity attacks.

Macro Bites

• China cut several major interest rates to support its fragile economy for the first time since August of last year. The U.S. continues to look for signs that the Fed will follow suit.
• Budget European airline Ryanair sees a 17.3% stock plunge in the wake of a 46% fall in quarterly profits. The airline predicts lower airline prices for this summer.
• CrowdStrike stocks fall 13% Monday as outage woes continue. Analysts expect a recovery, but serious questions remain.

Start passively investing in franchises today!

Accredited and non-accredited investors can invest in our latest offering, TNT Franchise Fund Inc., today! 

TNT Franchise Fund Inc. is a diversified portfolio of up to 30 Smash My Trash locations and 25 Teriyaki Madness outlets throughout the United States.

With its patented waste compaction service, Smash My Trash is disrupting the $1.6 trillion waste management sector. By compacting waste in open-top dumpsters to reduce waste volume, customers save money (up to 20% of waste removal costs) and reduce their CO2 emissions by up to 65%.

Teriyaki Madness stands out with its fresh, made-from-scratch meals and a lively, inviting ambiance, revolutionizing the fast-casual Asian dining scene. Its surging popularity is evident on platforms like Yelp, Facebook, and Google, where an increasing community of enthusiasts sing its praises.

Highlights:

• Target locations: Up to 55
• Smash My Trash per-location economics: $885K in revenue with 28% EBITDA after 16 months of operation
• Teriyaki Madness per-location economics: $1.16M in revenue with 20% operating profit

As the Smash My Trash and Teriyaki Madness locations come to fruition, investors in TNT Franchise Fund Inc. can expect to receive excess cash flows from the business operations of the locations on a quarterly basis.

For more information on the offering, contact our team.