Title
Receive and accept the Treasurer's Report of Investments for the Quarter Ending September 30, 2019.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Receive and Accept the Treasurer's Report of Investments for the Quarter Ending
September 30, 2019.
SUMMARY:
Government Code Section 53646 (b) (1) states the Treasurer may submit a quarterly report of investments. The attached exhibits provide a narrative portfolio review of economic and market conditions that support the investment activity during the July - September period, the investment portfolio position by investment type and the investment portfolio by maturity range.
DISCUSSION:
During the July - September quarter, U.S. Treasury yields continued to fall, and the inversion of the yield curve worsened (a classic early warning sign of recession) with the 10-year Treasuries falling below those of the 2-year Treasuries. A deteriorating U.S. economic outlook was made worse by ongoing trade tensions which prompted the Federal Reserve to cut rates by 25 basis points (0.25%) at both the July and September Federal Open Market Committee (FOMC) meetings. While a U.S. recession is not in the immediate forecast, risks are rising including escalating U.S China trade tensions and slowing growth abroad.
On September 30, 2019, the Monterey County investment portfolio contained an amortized book value of $1,551,246,310 spread among 164 separate securities and funds. The par value of those funds was $1,557,346,901with a market value of $1,550,705,226 or 99.9% of amortized book value. The portfolio's net earned income yield for the period was 2.46%. The portfolio produced an estimated quarterly income of $9,734,550.44 that will be distributed proportionally to all agencies participating in the investment pool. The investment portfolio had a weighted average maturity of 350 days. The County Treasury continues to use shorter term debt to provide portfolio liquidity and enhanced invest...
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