Feb 8, 2025

 

The S&P 500 closed down 0.2% this week. The Bloomberg Aggregate Bond Index gained 0.4%, Gold rallied 1.1%, and Bitcoin fell 5.6%.

The ISM Manufacturing survey rebounded back above 50 for the first time since October 2022, indicating the manufacturing sector is once again expanding. The Prices Paid Index rose for the fourth consecutive month, so inflation continues to be sticky. The January labor report showed 143,000 new jobs were added, missing forecasts for 170,000. 

 

 

 

Trade War Update 

 

 

This week, President Trump made big adjustments to US tariff policy. On February 3, the US reached agreements with Canada and Mexico to temporarily pause the 25% tariffs on imports from these countries. In exchange, both nations committed to actions addressing border security, illegal drugs, and immigration issues. The pause will last 30 days, until March 4, 2025, with retaliatory tariffs from these countries also suspended during this period. 

The tariffs on China were implemented, however. On February 4, the US imposed a 10% tariff on all imports from China and Hong Kong. These tariffs are in addition to existing Section 301 tariffs. President Trump hinted at further measures this week, including potential new tariffs on countries that have trade deficits with the US. Bottom-line: trade policy uncertainty is likely here to stay. 

 

 

 

Trump Announces Sovereign Wealth Fund and Branded Investments

 

 

This week, President Trump signed an executive order directing the creation of a plan for a US Sovereign Wealth Fund (SWF). Trump said tariffs could be a funding source for the sovereign wealth fund, which would acquire strategic assets. He named Tik Tok as one potential example.  

It's odd for a Republican President to propose something like a SWF, because it contradicts core Republican principles of limited government and free-market economies. SWFs are state-owned investment funds typically found in countries with trade surpluses, where excess reserves are invested in foreign assets. They're commonly found in oil rich nations or export-driven economies, not deficit-running countries like the US. SWFs are vulnerable to political manipulation, often benefiting wealthy donors who influence fund management and investment decisions. 

In other news, Trump Media and Technology Group said Thursday that it applied to register trademarks for brand names connected to the upcoming launch of its customized exchange-traded funds (ETFs) and customized separately managed accounts (SMAs). The trademarks include “Truth.Fi Made in America ETF,” “Truth.Fi Made in America SMA,” “Truth.Fi U.S. Energy Independence ETF,” “Truth.Fi U.S. Energy Independence SMA,” “Truth.Fi Bitcoin Plus ETF” and “Truth.Fi Bitcoin Plus SMA,” according to a press release.

Will a US sovereign wealth fund invest in energy infrastructure and Bitcoin? Probably. This is one of the reasons Silverlight managed portfolios are long energy infrastructure stocks and Bitcoin. 

 

 

 

Gold Trades at All-Time High

 

 

Gold surged to an all-time high of $2,861 per ounce, rising for the sixth consecutive week. Gold is already up 9.4% year-to-date. 

The gold bull market is driven by a perfect storm of economic and geopolitical factors. President Trump's recent decision to impose tariffs on Canada, China, and Mexico has heightened fears of a trade war, pushing investors into safe-haven assets. Central banks, particularly from emerging markets, are also making very large gold purchases. "We've gotten to a point where central banks are mopping up everything they can because of an unfriendly world. Between tariffs, trade wars and so on, they don't want to hold US treasuries, they want gold instead," said Golden Prospect co-fund manager, Rob Crayfourd. 

Silverlight managed portfolios are long gold and we expect the price to climb over $3,000 by the end of 2025. 

 

 

 

78% of Nvidia Employees Are Millionaires

 

 

The K-shaped economy is real and evident by how much money Nvidia employees make. A recent survey revealed that 78% of Nvidia employees are now millionaires, with half boasting a net worth exceeding $25 million. This staggering wealth creation stands in stark contrast to the plight of the average middle-class American, whose real wages have slipped over the past five years. While Nvidia workers reap the benefits of the AI boom, with the company's stock soaring 3,776% since 2019, most Americans struggle to keep pace with inflation. The wealth gap continues to widen, with the top 10% of households holding 67% of total household wealth, while the bottom 50% possess only 2.5%. 

Consistent with many tech firms, Nvidia runs a human capital-light business. Whereas Nvidia has 29,600 employees and a net worth of $3.2 trillion, and old-economy industrial company like General Motors has 162,000 employees and a net worth of $47 billion. The reason there is a K-shaped economy is because more and more profits are being earned by a narrower and narrower segment of the population. 

 

 

 

Sortitude: The Art of Not Being Sure

 

 

Sometimes you sorta know what to do, sometimes you don't, and that's ok. 

In a world that values certainty, there’s something refreshing about embracing sortitude—the state of being unsure yet open to possibilities. Sortitude isn’t about indecision; it’s about recognizing that not every question has a clear answer and that ambiguity can be a space for growth.

When we accept sortitude, we allow ourselves to explore different perspectives without rushing to conclusions. It fosters curiosity, creativity, and adaptability—traits essential for problem-solving and innovation. Instead of fearing uncertainty, we can see it as an opportunity to ask better questions and refine our understanding.

Sortitude also helps us navigate relationships. Rather than assuming we have all the answers, we can listen more, learn more, and approach conversations with humility. Life isn’t black and white, and sometimes, the best response is, “I’m not sure, but let’s figure it out.”

So, embrace sortitude. It’s not a flaw—it’s a superpower.

 

 

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This material is not intended to be relied upon as a forecast, research or investment advice. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and non-proprietary sources deemed by Silverlight Asset Management LLC to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Silverlight Asset Management LLC, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any of these views will come to pass. Reliance upon information in this post is at the sole discretion of the reader.​​