Beyond the Arches #41: Strong inflation and labor market data chalk up a win for stocks and commodities. Hope for future Fed rate-cut activity lifts all ships after weak December. 

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Stocks are bouncing back from a slow downward crawl in the wake of good news on inflation and labor. The Dow Jones Industrial Average surged over 700 points Friday, and the S&P 500 posted its best day since November. The Nasdaq rallied nearly 2.5% in trading after weeks of declines or break-even performance. Treasury yields dipped accordingly, with the 10-year yield down 13 basis points. 

Inflation and Fed data put more gas in the tank for Bitcoin as well. The coin topped $100,000 Wednesday after trailing off from record-high prices earlier in the fourth quarter of the year. The strong inflation data likely reignites talks of further Fed cuts after analysts began adjusting their expectations on rate drops in the near future. 

Gold and other precious metals also rose on the CPI news, gaining 3.2% on a yearly basis in December in response to economic markers and the corresponding dip in the U.S. dollar. While no immediate rate cuts are in the works, analysts see a higher possibility of Fed actions later in 2025. 

Three exciting FranShares investment opportunities

• Kidokinetics offers accredited investors the opportunity to participate in a $1M capital raise for this franchisor to fuel expansion and enhance the franchisee network
• Bravehart Development presents accredited investors with the opportunity to invest in the first tranche of an investment featuring 10 Hawaiian Bros brand locations.
• Sloan Capital presents accredited investors with the opportunity to invest in this offering, which includes 24 locations of the brand Everbowl.

On Our Radar This Week

• A possible end to the violent conflict between Israel and Gaza is within reach as Israel and Hamas move toward a signed ceasefire agreement. Though final voting over a three-stage ceasefire and hostage trade has been delayed until Friday, parties on all sides are hopeful for an end to the hostilities that have claimed tens of thousands of lives and reduced huge swaths of Gaza to rubble. Beyond the end of hostilities, the ceasefire will have major global policy and economic implications.
• The Consumer Price Index (CPI) was a bright spot in economic news this week, as core inflation slowed to 3.2% in December. Although the cooling inflation numbers came in under analyst expectations, the market response was immediate. Stock market futures surged in the wake of the report’s release, while bond yields tumbled. Energy and shelter prices factored heavily into the overall weighting of the CPI, stymying the Fed’s progress at bringing core inflation under its stated 2% target. 
• Response teams continue to battle the raging Los Angeles wildfires, struggling to contain the Eaton and Palisades fires as millions flee dangerous conditions and the Santa Ana winds drive increased spread and destruction. The historic fires in one of the country’s most populated areas will have major implications for local and national industry, infrastructure, housing costs, and investments. Current damage and economic impact estimates are well over $250B USD. 

Macro Bites

• ChatGPT adds agentic AI and task management, reminder features. Pro users will now have the power to schedule tasks and routines ahead of time with the help of a ChatGPT AI agent.
• CapitalOne accused of cheating customers out of $2B in interest payments. A Federal lawsuit claims the giant bank deliberately underpaid savings account interest, even as rates rose.
• TikTok prepares for U.S. shutdown. With a looming Sunday deadline and no serious buyers for the platform, ByteDance prepares to go dark for U.S. accounts.

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.