Steady approach advised in stock market following strong initial period, according to La Caisse
In the wake of President Trump's announcements of multinational tariffs, financial markets have experienced high volatility. This volatility, however, provided an opportunity for La Caisse to make profitable investments in the stock market.
Charles Emond, President and CEO of La Caisse, expressed satisfaction with a 6% performance in the first half of the year, but is adopting a cautious approach for the second half. He emphasized the importance of maintaining agility in the financial markets for the rest of the year.
Vincent Delisle, Senior Vice-President and Head of Liquidity Markets at La Caisse, explained that the agility referred to is the ability to sell securities and buy them back during market fluctuations. The resale of securities allowed La Caisse to be well-positioned to take advantage of the market downturn in April.
La Caisse's investments in the stock markets were the main contributor to its overall 4.6% return in the first half. The stock market rebounded robustly after the downturn caused by President Trump's announcements.
However, the potential impact on the growth of the American economy, with volatility linked to external trade, is a concern for La Caisse. The main factor of instability, as per La Caisse's executives, is the uncertainties surrounding the Trump administration's trade war policies in Washington.
The primary source of geopolitical instability that La Caisse's executives are closely watching in relation to the Trump administration's trade war policies is the protectionist and isolationist agenda pursued by the Trump administration. This has resulted in a trade war with China, tariff hikes, and overall uncertainty surrounding the international trade regime, security agreements, and the role of the US dollar in the global monetary system.
This geopolitical tension driven by trade policy uncertainty and tariff disputes is a key factor influencing La Caisse's risk assessments and strategic outlook. The market downturn in April was caused by President Trump's 'Liberation Day' announcements of multinational tariffs.
Charles Emond emphasized that the clarity of trade policy and the full impact of already announced measures will be closely watched in the second half. He also highlighted the risk of inflation increasing as prices may rise in the wake of current tariffs. Vincent Delisle stated that the almost uninterrupted rally in an unstable geopolitical context increases the risk of investor disappointment in the coming months.
Despite these challenges, La Caisse boosted its liquidity at the beginning of the year through the resale of securities. The stock market gains following the return of Donald Trump to the White House were a factor in La Caisse's decision to boost liquidity.
Financial markets have remained resilient so far, but the upcoming effects on the economy are beginning to materialize and should not be underestimated. La Caisse will continue to closely monitor the situation and adapt its strategies as necessary to navigate the volatile financial markets.
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- Amidst the uncertainty surrounding President Trump's trade war policies and the impact on the American economy, La Caisse is planning to invest strategically in various sectors such as real estate and finance, knowing that their ability to sell and buy securities during market fluctuations will be crucial.
- Additionally, La Caisse is keeping a close eye on the stock-market volatility caused by the ongoing trade disputes, acknowledging that the influx of funds from the stock market rebound following the downturn could be used for further investing opportunities, especially considering the potential for inflation due to ongoing tariffs.
