Meriden Retirement Board
Tuesday – April 10, 2007
Overview
“When the U.S. sneezes, the world catches a cold.” Few economists or market strategists would doubt the truth of that remark over the past half century. The current investment climate however gives rise to talk of “decoupling” America’s economy from the rest of the world. Could it be that overseas demand is throwing a lifeline to U.S. corporations?
While the housing slump and weak business investment weighed down U.S. domestic demand, exports were accelerating and imports, shrinking. Both Europe and Japan report broad, sustained growth this year. For the first time in more than a decade, trade may add to U. S. growth instead of subtracting from it. With a weakened U.S. dollar, heavy equipment and consumer goods from American firms are now cheaper overseas. Imported goods from overseas are rising in cost here in the States. Higher-growth economies in China and the Sub-Continent turn to high-quality goods from America. One strategist in London now suggests: “When the U.S. sneezes, the rest of the world goes shopping.”
Meriden Retirement Funds
March was a recovery month. The Meriden Retirement funds closed out the third fiscal quarter at $235.2 million, a preliminary showing of +1.6% for the quarter and +9.4% FYTD. The City Employees fund totaled $133.7 million, while the Police/Fire pension funds held $101.5 million. Composite asset allocation softened, with 74% in stocks, 13% in fixed income, 13% in alternative investments including real estate trusts and managed futures. During the quarter, the Dow Jones Industrial Average was down 0.9%, the S&P 500 gained 0.2% and the NASDAQ gained 0.3%.
Manager/Investment Updates
The CNL Hospitality sale to Morgan Stanley Real Estate is scheduled to be voted on tonight at CNL’s shareholder meeting in Orlando. In February, the Meriden Board authorized reinvestment of the sale proceeds in other REIT offerings. The April 24th Investment Sub-Committee meeting is scheduled for 4:00 pm and will include presentations by Neuberger Berman and Roxbury. All Board members are encouraged to attend. Neuberger’s fixed income management has recently been re-branded as Lehman Brothers.
Patrick J. Sheehan
Gerald Hazen Glass
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