Although “very happy” of the yield of 6 % obtained in the stock markets during the first very volatile half, the senior managers of the Caisse de Dépôt et Placement du Québec are now displayed in “prudence” mode for the second half of the year.
“The financial markets experienced strong volatility, with a stock market correction in April, followed by a significant rebound. This is a trend that invites caution, “said the president and chief executive officer Charles Emond, during the presentation of mid-year results.
Despite this strong volatility in April, and a relatively “good” start to the year in the stock markets, “the rally almost uninterrupted in a geopolitical context which remains unstable certainly increases the risk of investors’ disappointment in the coming months”, added Vincent Delisle, first vice-president and chief of liquid markets (financial).
What is the main factor of instability? The vagaries of the Trump administration’s business war policy in Washington, the Caisse leaders say.
Photo Édouard Desroches, the press
The CEO and President of the Caisse, Charles Emond
The financial markets remained after all resilients [durant le premier semestre]but we must not underestimate the effects to come in the economy, which are barely starting to materialize.
Charles Emond, president and chief executive officer of the Caisse
Consequently, “the clarity of pricing policy and the full effect of the measures already announced will be scrutinized in the second half”, according to the president of the fund.
“First in terms of the impact on the growth of the American economy, while we begin to perceive a slowdown in demand, with volatility linked to foreign trade. Secondly, at the level of the increase in inflation, while prices may increase in the wake of current prices. »»
“Continue to be agile”
In this context, what a special challenge for the cash register by the end of the year? “What that means for us, in the financial markets, is to continue to be agile, as we were during the April stock exchange, which was beneficial to us thereafter,” said Charles Emond.
What agility? The explanation came from Vincent Delisle, first vice-president and liquid markets (financial).
After the big American stock market gains with the return of Donald Trump to the White House, “we decided to enhance our liquidity at the start of the year [par des reventes de titres] “Summaged M. Delisle.
“We were then well positioned to make buybacks when falling back [en Bourse] provoked by the “release day” of President Trump in April ”(the announcement of multinational customs duties).
In retrospective, “it was a beautiful window of opportunity which we are happy to have been able to take advantage of when the markets rebounded in a robust manner thereafter”.
The result? With their yield of 6 %, the fund’s investments in the stock markets proved to be the main contributor to its overall yield of 4.6 % during the first half.
