TOTAL FUNDS INVESTED
Funds available for investment at market value include the State Treasurer’s investments at $12,267,490,678 and State Agency balances in OK Invest at $3,512,931,865, American Rescue Plan investments at $960,230,222, and the Oklahoma Capitol Improvement Authority Legacy Fund at $863,965,960 for a total of $17,604,618,725.
he year-to-date returns for the major stock indices were higher for August compared to July with the S&P 500, Dow Jones Industrial Average and Nasdaq coming in at 9.84%, 7.05% and 11.11% respectively. Wall Street sold off high-flying tech stocks contained in the S&P in the final session before the Labor Day holiday. On a monthly basis the S&P 500 gained 1.9%, the Dow was at 3.20% and the Nasdaq earned 1.58%.
The Federal Open Market Committee (FOMC) voted on September 17 to drop interest rates by 0.25% to the target range of 4.00%-4.25%. This was the first time in 9 months that a rate cut was considered. There was one dissenting vote by the new committee member Stephen Miran, who preferred to lower interest rates by 0.50%. The statement issued by the FOMC said “job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated.” The Committee continues to seek maximum employment and inflation at the rate of 2% over the longer run and “risks to both sides of its dual mandate and judges that downside risks to employment have risen.”
ECONOMIC DEVELOPMENTS
The job growth in the US dramatically fell in August along with the unemployment rate increasing to 4.3%. The unemployment rate was the highest since the fall of 2021. The Bureau of Labor Statics (BLS) reported that payrolls increased by a mere 22,000 and the July nonfarm payroll number was upwardly revised to 79,000. According to Reuters, sweeping import tariffs and an immigration crackdown reduced the labor pool and the hiring side was struggling. According to the Bureau of Labor Statistics, “A job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction.”
The Consumer Price Index (CPI) for August rose to the highest in 7 months, at 0.4%. The rise in prices for shelter and food was attributed to the increase. The cost of shelter jumped 0.4% and prices at the supermarket increased 0.6%. On a year-over-year basis, CPI advanced 2.9% in comparison to 2.7% in July. Core CPI, which excludes food and energy components, rose 0.3%. Reuters writes the rise was broad with “tariff-exposed products like new motor vehicles, apparel and household furnishings and operations costing more.” The Producer Price Index (PPI) unexpectedly decreased 0.1% in August on a seasonally adjusted basis compared to advancing 0.7% in July and 0.1% in June. The fall in the PPI was attributed to a 0.2% decline in services prices.
Retail sales came in better than expected in August, up 0.6% and July was upwardly revised to 0.6% from 0.5%. The Census Bureau reported that non-store retailers were up 10% from last year, while food service and drinking places were up 6.5% from August 2024. According to Reuters, there are concerns “momentum could ease amid labor market weakness and rising goods prices because of tariffs on imports.”
The total existing home sales in July were at a seasonally adjusted annual rate of 4.01 million, up from 3.93 million the month before. The unsold home inventory was at a 4.6 months’ supply, and the median existing home sales price was $422,400. According to the National Association of Realtors, current inventory is at its highest since May 2020, during the COVID lockdown.
The Bureau of Economic Analysis (BEA) reported that the second quarter real gross domestic product (GDP) increased to 3.3% on an annual basis. The first quarter GDP reflected a contraction of 0.5%. The BEA said the 0.3% increase from the last estimate was primarily due to upward revisions to investment and consumer spending that were partly offset by a downward revision to government spending and an upward revision to imports.
COLLATERALIZATION
All funds under the control of this office requiring collateralization were secured at rates ranging from 100% to 110%, depending on the type of investment.
Best regards,
TODD RUSS
STATE TREASURER
