Sep 01, 2025
4
min read
💬 Daily Observation
"Time is your friend; impulse is your enemy." – John C. Bogle
September begins with Labor Day in the United States, a holiday that encourages a pause from work at a time when markets often turn choppy.
Bogle’s reminder that time works in your favor and impulse works against you is a useful guide. Use the long weekend to step away from the noise: assess whether your portfolio still reflects your goals and risk tolerance.
Regular maintenance, and rest, can help you avoid rash decisions and keep you aligned with your long‑term objectives.
☕️ So let’s dive into today’s fresh edition of Diversification Daily.
🗞️ Today's stories that matter (and why)
1. ⚠️ September looms with political and policy risks
Markets enter September with a long list of risks. A Reuters analysis notes that investors are worried about the month’s reputation for weak equity returns and about policy shocks.
US President Donald Trump has moved to fire Federal Reserve Governor Lisa Cook, raising concerns about the Fed’s independence, while French Prime Minister Gabriel Attal has called a no‑confidence vote over budget cuts. Geopolitical tensions from the Ukraine war to US–China trade disputes, and rising long‑term bond yields across the US, Europe and Japan add to the uncertainty.
Why it matters: Historically, September is the market’s worst month and complacency can prove costly. Political turmoil in France could spill over to European bond markets; attempts to undermine the US central bank’s independence may alter the timing of rate cuts. Investors should revisit their portfolio’s shock absorbers, high‑quality bonds, cash and alternative assets, to weather potential volatility.
Assets in Focus: Equities
2. 💵 Dollar sinks ahead of US jobs data
The US dollar index fell to 97.64, its lowest level since late July, as investors braced for this week’s labor‑market reports.
Money markets are pricing in about a 90 % chance that the Federal Reserve will cut rates at its September meeting.
The euro climbed 0.35 % to $1.1724 while China’s offshore yuan firmed; markets also digested a US appeals court ruling that most of Trump’s tariffs are illegal.
Why it matters: A weaker dollar lifts overseas earnings of US multinationals and tends to support commodities. Rate‑cut expectations reflect growing cracks in the job market and would lower borrowing costs across the economy. However, political fights over tariffs and Fed independence could complicate policy. Investors should think about how a falling dollar might impact their international holdings and commodity exposure.
Assets in Focus: Currencies
3. 🛢️ Oil climbs on supply risks and weak dollar
Brent crude added roughly 1.2 % to $68.31 per barrel while US West Texas Intermediate rose 1.3 % to $64.84 as concerns about Russian supply disruptions and a softer dollar supported prices.
The rally comes even though August marked the first monthly decline in four months due to increased OPEC+ supply. Analysts expect modest trading volume ahead of the US holiday and note that President Volodymyr Zelenskiy has vowed to retaliate against Russian drone attacks.
Why it matters: Oil remains a barometer of geopolitical risk. Supply disruptions from the Russia–Ukraine war and OPEC+’s output decisions could quickly tighten markets. For long‑term investors, energy stocks and commodities are a hedge against inflation and geopolitical shocks, but they also carry volatility when demand softens.
Assets in Focus: Commodities
4. 🌍 US keeps pushing trade deals despite court ruling
The US trade representative’s office says negotiations with Britain, Kenya and other partners will continue even after a federal appeals court ruled that most of President Trump’s tariffs are illegal.
The court said Trump lacked explicit authority to levy tariffs on national security grounds but allowed the duties to remain in place until Oct. 14 while the administration appeals. Trade experts note that older statutes could still be used to justify tariffs. leaving companies uncertain about future rules.
Why it matters: Trade policy affects everything from supply chains to inflation. Ongoing uncertainty about US tariffs on allies and adversaries makes it difficult for businesses to invest and could slow global growth. Investors should be prepared for headline‑driven volatility in industries exposed to trade (autos, industrials, technology) and consider diversification across regions.
Assets in Focus: Equities
5. 🏭 Europe’s factories show life as Asia stumbles
Eurozone manufacturing activity expanded for the first time since mid‑2022, with the Purchasing Managers’ Index rising to 50.7 thanks to domestic demand offsetting the impact of US tariffs.
Germany’s PMI improved to 50.5 after 15 months of contraction. In contrast, Japan, South Korea and Taiwan remain below the 50‑point threshold that separates growth from contraction, reflecting weak global trade and the drag from US trade barriers. China’s private-sector PMI surprised to the upside at 50.5 even though official surveys showed contraction.
Why it matters: A recovery in European manufacturing suggests domestic demand may be strong enough to withstand tariffs, while Asia’s continued weakness highlights how export‑oriented economies remain vulnerable. Diversifying across regions and sectors can help investors avoid overexposure to a single economic cycle.
Assets in Focus: Equities
🌀 Diversification Score – Have you evaluated your portfolio's diversification?
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🤯 Alternative investment highlight: ⚔️ Conan’s Blade slices into auction records
A resin sword wielded by Arnold Schwarzenegger in the 1982 film Conan the Barbarian fetched $176,400 at PropStore’s Entertainment Memorabilia Live Auction this spring, well above its $75,000–$150,000 estimate.
The Atlantean Blade was designed by sci‑fi artist Ron Cobb and crafted by master bladesmith Jody Samson; runic decorations and battle damage give the prop its gritty look.
Other lots included a Star Wars storyboard drawing that sold for $15,120 and Charlie Chaplin’s boots from The Great Dictator that fetched $157,500.
The sale shows how pop‑culture nostalgia can turn film memorabilia into prized alternative assets—more conversation piece than portfolio diversifier.
🧠 From the Education Center:IPOs make headlines—but who actually profits?
First-day IPO surges often dominate headlines—but those gains usually go to institutional players, not everyday investors.
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