The City of Moose Jaw’s investment portfolios generated nearly $10 million this year in interest, while the portfolios have created over $20 million in additional revenue since their inception two years ago.
During city council’s Dec. 13 regular meeting, council received the investment committee’s report for 2021. From Jan. 1 to Nov. 30, the municipality’s medium-term and long-term portfolios had generated $9,255,474.49 in interest.
There was $29,806,075.08 in the medium-term portfolio and $82,061,692.44 in the long-term portfolio as of Nov. 30, for a total of $111,867,767.52. In comparison, by the end of 2020, those portfolios were $31,279,510.67 and $75,367,454.91, respectively.
Since 2019, the portfolios have generated a combined $20,945,110.87 in interest.
Council later voted to receive and file the document.
Medium-term portfolio
During the shortened fourth quarter, the medium-term portfolio saw a negative return of 0.44 per cent. However, year-to-date, the portfolio achieved 6.35 per cent, while it has seen returns of 6.4 per cent since inception in 2019.
In comparison, the expected return of this file was 4.25 per cent.
Long-term portfolio
During the shortened fourth quarter, the long-term portfolio saw a negative return of 1.12 per cent. However, year-to-date, the portfolio has achieved 9.70 per cent, while it has seen returns of 9.88 per cent since inception two years ago.
In comparison, the expected return of this investment file was six per cent.
Committee comments
The investment committee continues to overweight both portfolios in equities by about five per cent, a decision made to offset historic lows in fixed income markets that are seeing negative returns due to inflation, said Coun. Dawn Luhning, a member of the investment committee.
The committee’s decision to sell the city’s bond portfolio and reinvest that money into guaranteed investment certificates (GICs) is proving to be a good decision, she added, given the near-negative — or in some cases, actual negative — returns of current bond opportunities.
Investment outlook
The economic rebound from last year’s recession is now past and some of the “extreme dislocations” resulting from the pandemic are moderating, the Royal Bank of Canada said in its global investment outlook that was part of the investment report.
“While the economy is slowing, growth remains robust and consumers are well-positioned to support the expansion. Bond yields remain unsustainably low and we continue to prefer equities as surging corporate profits have pushed the bull market to new highs,” the report continued.
RBC forecasted that real gross domestic product (GDP) growth in many developed countries would be about four per cent, nearly double the pre-pandemic levels. While the pandemic remained a risk and government stimulus money was still floating around, one factor that could offset those risks is the trillions of dollars that consumers had saved and that could boost the economy through increased spending.
Inflation was expected to return to pre-pandemic levels once the “distortions of the pandemic” had faded, while the U.S. greenback was expected to see a long-term downward trend with further weaknesses in the coming years, the report added. Meanwhile, soaring corporate profits were contributing to an extended bull market in stocks.
The next regular city council meeting is Monday, Jan. 10.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
