Stock market boss predicts a potentially disheartening conclusion to the year from La Caisse perspective.
Headline: TGV Project Moves Forward, La Caisse Warns of Financial Market Volatility
The TGV project, which has been in discussion for four decades, is finally making progress as it receives nearly $4 billion for the next phase of planning from the federal government. This suggests that the high-speed rail project, involving private interests, is likely to proceed in stages.
Meanwhile, La Caisse de dépôt et placement du Québec, a major Canadian investment firm, reported a solid 4.6% return at mid-year 2025, outperforming their benchmark. However, their executives have warned that the next few months could be challenging, especially regarding US inflation numbers and underlying economic softness.
To face turbulence and volatility, La Caisse has reduced the risk level of certain portfolios and increased liquidity levels. They anticipate financial market volatility and possible headwinds connected to inflation volatility and economic softness. Despite the cautious outlook, they remain ready to capitalize on opportunities during turbulent periods.
The US-China trade war, with the US imposing tariffs, continues to be a significant factor. The ongoing trade war, coupled with the economic policies of the Trump administration, poses a risk of stagflation, a decline in growth combined with an increase in inflation. This could pressure markets adversely.
La Caisse's approach reflects an evolving risk management philosophy, acknowledging the complexity of today's interconnected geopolitical shifts, climate disruptions, and technological changes, which reshape risk and return dynamics requiring more agile responses.
One of La Caisse's largest stock investments is Nvidia, valued at over $3 billion. They are also open to investing in Lyten if the company manages to acquire the Northvolt project in Quebec. However, details regarding the recovery of the $30 million loan with Finalta Capital, part of which was invested in Lion Electric, are not yet public.
The cost of living is expected to rise due to Donald Trump's tariffs, according to experts. The risk of investor disappointment is high due to the potential weakening of the American economy, stemming from tariffs and immigration restrictions.
In a separate development, the agreement between Nvidia and the Trump government reflects a very dirigiste economic policy. There is no information about payments to Meta or Monica Seles in the latest interview.
On a positive note, April was the seventh most volatile month in history, with significant market fluctuations. However, CDPQ Infra, the infrastructure subsidiary of La Caisse, is not experiencing a growth crisis. The teams working on the Montreal Metro (REM) project will be reassigned to other projects once the two branches are opened.
In conclusion, while the TGV project moves forward and La Caisse continues to navigate financial market volatility, investors and stakeholders should remain vigilant, particularly regarding US inflation numbers, underlying economic softness, and the ongoing trade war.
La Caisse, while outperforming their benchmark, has expressed concerns about potential headwinds resulting from US inflation numbers, economic softness, and financial market volatility. With these concerns in mind, they have adjusted their investment portfolios, aiming to minimize risks and increase liquidity.
Moreover, considering the environmental impact of their investments, La Caisse is open to investing in projects such as the Northvolt project in Quebec, aligning their business interests with a more sustainable environment.
