May 29, 2025
4
min read
💬 Daily Observation
“Investing isn't about beating others at their game. It's about controlling yourself at your own game.” — Jason Zweig
This quote by financial journalist Jason Zweig highlights the importance of self-discipline in investing. Rather than focusing on outperforming others, successful investors prioritize managing their own behaviors and emotions. Recognizing and controlling personal biases can lead to more rational decision-making and long-term success in the financial landscape.
So grab your coffee, and let’s keep informed with today's fresh edition of Diversification Daily.
🗞️ Today's stories that matter (and why)
1. 💻 Nvidia tops earnings despite China hurdles
Nvidia reported a record $44.06 billion in revenue for Q1 FY2026, marking a 69% year-over-year increase, driven by a 73% surge in its data center segment to $39.1 billion. However, adjusted earnings per share came in at $0.81, falling short of expectations due to a $4.5 billion charge related to unsold H20 chips amid US export restrictions to China.
The company anticipates an additional $8 billion revenue impact in the current quarter from continued export challenges. Despite these setbacks, Nvidia's shares rose over 5% in after-hours trading, reflecting investor confidence in its AI-driven growth.
Why it matters: While AI demand appears robust, ongoing export controls introduce uncertainty for global supply chains. Investors may want to closely monitor how geopolitical policy shapes growth in AI-linked equities and infrastructure.
Assets in focus: Equities
2. 🏛️ Fed minutes reveal inflation and unemployment concerns
The Fed’s May 6–7 meeting minutes indicated heightened concern about persistent inflation and labor market softening, calling the outlook “unusually uncertain.” The discussion also noted how recent tariffs have complicated the inflation picture. The Fed held rates steady at the meeting.
Why it matters: The Fed’s acknowledgment of economic crosswinds reflects the complexity of its policy path. For fixed income and currency markets, uncertainty around future moves could maintain volatility in yield curves and the dollar.
Assets in focus: Fixed Income
3. ⚖️ US Court blocks most Trump tariffs
A federal court has ruled that President Trump's broad tariffs, imposed under emergency powers, exceeded his authority, effectively blocking most of them. The decision has been welcomed by markets, with stock futures rising in response.
Why it matters: The court's decision underscores the constitutional limits of executive power in trade policy and may lead to significant shifts in US trade relations and market dynamics.
Assets in focus: Equities
4. 🏠 Housing market shifts in favor of buyers
The US housing market is shifting in favor of buyers, leaving many home sellers struggling and facing difficult decisions. In April 2025, nearly 500,000 more sellers than buyers were recorded—the largest gap on record. Approximately 40% of listings sat unsold for 60 days or more, the highest share in five years.
Sellers are responding by cutting prices, with about one in five listings seeing reductions in April. Some homeowners are even opting to rent their properties instead of selling at a loss.
Why it matters: The transition to a buyer's market indicates changing dynamics in real estate, with increased inventory and longer listing times. This shift may lead to more favorable pricing for buyers and potential opportunities in residential real estate and homebuilder equities as sellers adjust to the new market conditions.
Assets in focus: Real Estate
5. 🌍 Global shift away from US dollar debt
In the first five months of 2025, non-US sovereigns reduced their US dollar bond issuance by 19% to $86.2 billion—the first decline in three years. Countries like Canada, Saudi Arabia, Israel, and Poland saw reductions between 29% and 37%.
Conversely, local currency bond issuance surged to a five-year high of $326 billion, driven by falling domestic interest rates in nations such as India, Indonesia, and Thailand.
Why it matters: This trend indicates a growing effort by countries to diversify their debt portfolios and reduce reliance on the US dollar, potentially impacting global financial markets and currency dynamics.
Assets in focus: Currencies
🌀 Diversification Score – Have you evaluated your portfolio's diversification?
Are you spread across the right risk factors—or leaning on just a few big bets?
📊 Market Movements Snapshot
Asset Classes:
- 🟢 Emerging Market Equities: +7.06YTD. Investors have funneled over $10 billion into EM equity funds so far in 2025 as US stock valuations remain stretched and sentiment improves in Asia and Latin America.
- 🟢 Real Estate: +1.79%. Real estate returns have turned modestly positive after two years of correction, as long-term bond yields eased and net operating incomes stabilized
For the full list, click here
Sectors:
- 🟢 Utilities: +7.69% YTD. The Utilities sector has benefited from record clean-energy generation—renewables supplied over 50% of US electricity in April and May—offsetting a drop in natural-gas output and underscoring growing grid flexibility.
- 🔴 Energy: −4.21% YTD. Energy’s underperformance reflects a roughly 7% decline in average oil prices year-over-year in Q1 2025, which translated into lower upstream earnings and wider refining‐margin compression. At the same time, global energy demand growth has shifted toward renewables.
For the full list, click here
🤯 Alternative investment highlight: From meme to market, the rise of digital collectibles
In 2025, digital collectibles, particularly Non-Fungible Tokens (NFTs), have emerged as a surprising frontier in alternative investing. A notable example is XCOPY's "All Time High in the City," which sold for 1,630 ETH (approximately $6.2 million) in January 2022 to collector @rarecollector3000.
This animated artwork, minted in 2018, depicts the ferryman of the underworld transporting a man across the river Styx, embodying themes of death and dystopia. XCOPY, a London-based digital artist, is renowned for his glitchy, abstract style that has become a staple in the NFT ecosystem. His works often explore dark, philosophical themes, resonating with a niche audience in the digital art world.
The burgeoning market for NFTs illustrates the evolving landscape of alternative investments.
🧠 From the Education Center: Diversification, a Practical Guide
Diversification is powerful—but only when it’s done right. Learn how to spread risk smartly across assets, geographies, and time.
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