As the top investment officer for the state of Oklahoma, State Treasurer Todd Russ recently reported his office had more than $15 billion for investment at market value.
In a September financial update, Russ said the investments totaled $15,478,093,190 including State Treasurer’s investments of $12,000,011,409 and State Agency balances in OK Invest at $3,478,081,781. The total investments represented an increase of $1.8 billion compared to September 2022.
September portfolio yielded 2.82% with a weighted average maturity of 983 days.
Total portfolio contained 61% in U.S. Treasurys, 12% in U.S. government agencies,
18% in mortgage-backed securities, 8% money market mutual funds and 0.5% certificates of deposit.
State bond issues and foreign bonds totaled 0.5%, comprising the balance of funds invested.
Market Conditions
The 10-year treasury benchmark closed the month at 4.57%, reaching a new 15-year high in September. The 2-year and 30-year treasuries also reflected gains coming in at 5.05% and 4.40%, respectively.
| S&P | Dow | Nasdaq | |
| For the month | -4.87% | -3.50% | -5.81% |
| Year-to-date | 11.7% | 1.1% | 26.3% |
The fear of a potential government shutdown concerned investors and contributed to the stock market’s worst month of the year. All three indexes were in the red for September with the S&P, Dow and Nasdaq earning -4.87%, -3.50% and -5.81%, respectively. On an annualized basis, returns improved with the S&P up 11.7%, the Dow up 1.1% and the Nasdaq gaining 26.3%.
The Federal Reserve met on September 20 and decided to maintain the target range for the federal funds rate at 5.25% to 5.50%. Interest rates have been raised by the Fed at 11 of their past 13 meetings, with the last increase in July. The Wall Street Journal noted the “shift toward a more balanced bias on rates is driven by data showing easing inflation and a less overheated labor market. In addition, the unusually rapid rate increases implemented over the past 1 ½ years are expected to continue crimping demand in coming months.”
The Consumer Price Index (CPI) gained 0.6% in August and the core CPI was at 0.3%. More than half of the increase was attributed to a rise in gasoline prices. On an annual basis, CPI came in at 3.7% and core CPI was 4.3%. The Producer Price Index (PPI) was higher than expected at 0.7%. This was the largest single month increase since June 2022. The significant increase in energy prices was the primary reason for the increase in PPI.
Retail sales continued to surprise rising 0.6% in August. The gain during the month was attributed to an increase in gasoline prices and elevating receipts at service stations. On a year-over-year basis, retail sales increased 2.5%. Core retail sales, which exclude automobiles, gasoline, building materials and food services, rose 0.1% for the month. Meanwhile, core retail sales for July were downwardly revised to 0.7% from the previously reported 1.0%.
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.
Source: press release