I hope this message finds you well. As part of our monthly update, I’d like to share a short video where we review recent economic developments and what they mean for your portfolio.
Click on the video below to watch.
Key Highlights from the August 2025 Market Update:
- Slowing Job Growth
- July’s jobs report showed just 73,000 new jobs, with the 3-month average falling to its lowest since 2010 (outside of COVID).
- This slowdown highlights a weakening labor market and adds pressure on policymakers.
- Unprecedented Political Intervention
- President Trump’s firing of the Bureau of Labor Statistics head, following negative job revisions, marks the first time a developed economy has taken such a step.
- Additional dismissals, including former Fed governor Lisa Cook, underscore rising political tension around economic data and Fed independence.
- Interest Rate Outlook
- Fed Chair Jerome Powell signaled possible rate cuts in September, lowering the current 4.25–4.5% range.
- Meanwhile, President Trump has openly called for 0% rates, intensifying concerns about political influence over monetary policy.
- Stock Market Concentration
- Despite slowing economic indicators, U.S. equities reached all-time highs, largely driven by AI enthusiasm.
- Nine stocks including Nvidia, Microsoft, and Amazon now account for 60% of total market returns.
- Valuations are at record highs, raising concerns for long-term returns over the next 5–10 years.
- Commodities as Economic Signals
- Crude oil is flashing signs of economic weakness, while gold has reached all-time highs, supported by central bank diversification away from the U.S. dollar.
- Silver has also surged, benefiting from both industrial demand and central bank buying.
- Crypto & Regulation
- The newly passed Genius Act has established stablecoin regulations and SEC reforms.
- Ethereum prices are rising on expectations of increased stablecoin issuance, reinforcing crypto’s role as an alternative asset in the current environment.
- Dollar Weakness
- The U.S. dollar continues to decline, driven by challenges to Fed independence and reduced global investor confidence.
- This trend is supporting gold and crypto prices as investors seek alternatives.
Our Perspective
Markets today reflect both opportunity and risk. While headline equity indices are at record highs, underlying signals, from jobs and commodities to political intervention and currency weakness, suggest a more fragile backdrop. We remain cautious and disciplined in managing portfolios, emphasizing diversification, capital preservation, and alignment with your long-term goals.
I encourage you to watch the full video for a deeper dive into these topics. As always, please reach out if you’d like to review your portfolio positioning in light of these developments.
Omar Bassal, CFA
Chief Investment Officer
