May 10, 2025

💬 Daily Observation

“Diversification means always having to say you’re sorry.” — William Bernstein

It’s Monday motivation: the apology isn’t for being wrong—it’s for never being able to brag about the single big winner at the next barbecue. A well‑spread portfolio is like good sunscreen: you might miss a little tan, but you also avoid the burn.

🗞️ Today’s stories that matter (and why)

1. Tariff Thaw: U.S.‑China slash most duties for 90 days. (High Impact | Assets in Focus: Equities)
   Washington will cut levies on Chinese imports to 30% from as high as 145%, while Beijing trims its retaliation to 10%; the pause follows “constructive” weekend talks in Geneva.‍
   
   • Why it matters: Cooler trade winds brighten global profit outlooks and boost risk appetite—supportive for cyclicals and multinationals.
     
2. All eyes on April CPI tomorrow (High Impact | Assets in Focus: Fixed Income
   Economists peg headline inflation at 3.1 % y/y, while Fed‑funds futures have pared back to about 63 basis points (0.63 percentage point) of easing priced in for 2025—barely half what traders expected in mid‑April. ‍
   
   • Why it matters: A hotter‑than‑expected print could rattle bond prices and keep short‑term cash yields attractive—so stay light on long‑duration exposure.‍

Assets in Focus: Fixed Income | Impact: High

3. Crude climbs on trade cheer—Brent up 0.7% to $64.34. (Medium Impact | Assets in Focus: Commodities)
   Oil extended last week’s 4 % surge after the tariff détente revived demand hopes, even as looming OPEC+ supply keeps a lid on prices.
   Why it matters: Firmer energy prices can fatten producer margins but squeeze transport and consumer‑goods costs.
4. ⚡ NRG’s $12 B Power Bet‍
   
   • Utility NRG Energy will double its generation capacity by buying 18 gas plants and a virtual‑power‑plant platform from LS Power.‍
   • Why it matters? Shows how the grid—not just chipmakers—could be an overlooked winner of the AI boom.‍
   • Assets in Focus: Equities | Impact: Medium
5. Spring Housing Season Stalls‍
   
   • Despite rising inventory, US home sales are running at their slowest spring pace since 2009; 30‑year mortgage rates hover near 6.75 %. ‍
   • Why it matters? High carry costs keep buyers—and sellers—on the sidelines, muting price gains and pressuring real‑estate funds.‍
   • Assets in Focus: Real Estate | Impact: Medium

🔎 Market Movements Snapshot (YTD through May 10)

Asset Classes

• 🟢 Commodities (Gold): +29 % YTD — safe‑haven demand surged as tariff turmoil rattled risk assets. Gold Price
  
• 🔴 Bonds (10‑Yr Treasury): Yield 4.37 %, ▲ 0.27 ppt YTD — fewer expected Fed cuts pushed yields up and prices down. YCharts

Sectors

• 🟢 Consumer Discretionary (XLY): +3.5 % YTD — tariff relief lifted retailers and travel names. FinanceCharts
  
• 🔴 Financials (XLF): –1.9 % YTD — flat yield curve and muted loan growth weigh on banks. FinanceCharts
  

For full lists, visit diversification.com/asset‑classes and /sectors.

🤯 Something Wild in Alternative Investing

$50 K Geckos, No Joke. A former UPS driver has turned his love of crested geckos into a boutique empire where a single lizard—with the right genetic stripes—fetches car‑size prices at reptile shows.
Party fact: Top‑tier morphs can lay only a handful of eggs a year—scarcity rivaling blue‑chip art.

🧠 From the Education Center

“You’re Not Diversified (Even If You Think You Are).” — Why seven tech tickers ≠ a plan. ➡️ Read more

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🚨 Don’t Guess. Know.

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Talk tomorrow,
Fernanda de Francesco
Editor, Diversification.com

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