Showing posts from August, 2019

From Trade War to Currency War?

Fred Imbert of CNBC reports the Dow plummets more than 600 points after Trump orders US manufacturers to leave China:
Stocks plunged on Friday after President Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China. Apple led the way lower.

The Dow Jones Industrial Average closed 623.34 points lower, or 2.4% at 25,628.90. The S&P 500 slid 2.6% to close at 2,847.11. The Nasdaq Composite dropped 3% to end the day at 7,751.77. The losses brought the Dow’s decline for August to more than 4%.

The major indexes also posted weekly losses for the fourth straight time. The Dow dropped about 1% this week while the S&P 500 pulled back 1.4%. The Nasdaq lost 1.8%.

Trump tweeted on Friday: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..your companies HOME and making your products in the USA.” However, it is not clear how much authority the president has on this front.

Our Cou…

OTPP and CDPQ's Half-Year Results

The Ontario Teachers’ Pension Plan (OTPP) announced net assets top $200 billion in first half of 2019:
Ontario Teachers’ Pension Plan (Ontario Teachers’) today announced its net assets reached $201.4 billion as of June 30, 2019, a $10.3 billion increase from December 31, 2018. The total-fund net return was 6.3% for the first six months of the year.

“Our focus is on achieving stable results that help deliver financial security to our members through a variety of market conditions,” said Ron Mock, President and Chief Executive Officer. “Our balanced portfolio approach is delivering strong returns that are in line with our long-term objectives.”

Mid-year results provide a snapshot of the Plan performance over a six-month period, while historical returns underscore the long-term sustainability of our investment strategy. As at December 31, 2018, the last date for which there are full year figures, the Plan has had an annualized total fund net return of 9.7% since inception. The five- and …

CPPIB Ready For The Next Downturn?

Shane McNeil of BNN Bloomberg reports that CPPIB ready to 'take advantage' of potential market downturn:
The head of Canada’s largest pension plan says his fund is ready to take advantage of economic instability.

“We like to be able to take advantage of the opportunities that happen when everyone else is stressed,” Canada Pension Plan Investment Board Chief Executive Officer Mark Machin said in an interview with BNN Bloomberg Tuesday.

“That really should be one of the defining features of funds like ours. We have incredibly stable money, incredible long-term money. So, when other funds are suffering redemptions, or banks are under stress, we can buy assets at prices that come up once in a generation.”

The key, Machin says, is to rigorously stress test portfolios and ensure they’re prepared for absolute worst-case scenarios.

“The really key thing is understanding the risks you’re exposing yourself to, making sure you’re not compounding risks you haven’t thought about,” he said.


Bond Market Jitters Overdone?

Sunny Oh of MarketWatch reports on why the bond market isn’t as worried about a recession as you think:
The sharp swoon in U.S. Treasury yields this month may not point to a looming economic slowdown after all.

Less than half of the bond-market’s rally in August can be explained by a deterioration in the economic growth outlook and expectations for further monetary easing from the Federal Reserve, according to Marko Kolanovic, J.P. Morgan’s global head of quantitative and derivatives strategy, in a Tuesday research note.

The rest of the bond market move was driven by non-economic factors that nonetheless have spurred demand for long-term government debt.

Market participants have complained that the speed of the bond market’s rally this month appeared overdone given the resilience of the U.S. economy. Recent data including strong retail sales and continued growth in jobs underscore the strength of U.S households that have weathered the worsening global economic growth trajectory.


The Caisse's New Real Estate Chief

The Caisse de dépôt et placement du Québec (CDPQ) just announced that Daniel Fournier will soon retire as the CEO of Ivanhoé Cambridge, the Caisse's massive real estate subsidiary, and will be replaced by Nathalie Palladitchef who is currently the President of the organization:
After more than ten years of service at Caisse de dépôt et placement du Québec (CDPQ), including over nine as the CEO of Ivanhoé Cambridge, Daniel Fournier has announced that he will retire in fall 2019. To ensure an orderly transition, Mr. Fournier will continue to serve in his role until October 15, 2019.

“Daniel has done an outstanding job turning Ivanhoé Cambridge into one of the world’s largest real estate investors. Thanks to him and his team, Ivanhoé Cambridge has built world-class expertise in acquiring, developing and managing real estate assets. His legacy – a unified and truly global real estate company with a clear strategy and solid execution capability – is one that CDPQ will be able to build …