September proved to be a pivotal month as markets grappled with competing narratives: resilient equity performance versus deepening labor market concerns; and central bank easing versus mounting fiscal anxieties. Global equities climbed to new all-time highs for the fifth consecutive month, driven by renewed optimism in artificial intelligence and Federal Reserve rate cuts.

Troubling employment revisions revealed the largest downward adjustment in decades. This disconnect between market exuberance and economic fundamentals highlights the complex environment in which investors currently operate, where traditional safe-haven hierarchies are being challenged and speculation in unprofitable technology companies raises questions about sustainability.

The outlook for the final quarter of 2025 remains nuanced. Although tariff-induced inventory front-loading may lead to weaker growth as the mini-boom transitions to adjustment, fiscal support measures expected in 2026, including US tax cuts and targeted stimulus in Germany, China and Japan, could offset this. Central banks have significant scope to ease further if economic conditions deteriorate; however, the path forward depends on whether AI-driven productivity gains can offset immigration-related jobs supply shocks and tariff pressures.

We hope you enjoy reading these updates and find them helpful for the month ahead.