September 20, 2025

 

The S&P 500 made a fresh all-time high this week, rising 1.3%. The Bloomberg Aggregate Bond Index lost 0.3%, while Gold gained 1.1% and Bitcoin fell 1.5%. 

Retail sales jumped a more than expected 0.6% in August, continuing a three-month trend of strong growth. US GDP growth appears to have accelerated even as employment growth has faltered, which is a historical rarity. Maybe AI is starting to play a role here? Housing starts dropped 8.5% in August, while building permits fell 3.7% to a new cycle low. Builder sentiment also remained bleak, with the NAHB Confidence Index stuck at 32—near record lows—signaling ongoing pessimism about future housing conditions.

 

 

 

The Fed Cut Interest Rates, Which Is Probably Bullish For Equity Investors

 

 

Fed Chair Jay Powell acknowledged “the near-term risks to inflation are to the upside and risks to employment are to the downside—a challenging situation,” during his conference this week, highlighting the dual strains of sticky inflation and weakening employment facing the central bank’s mandate. The evidence of employment weakness is stark: recent job gain revisions erased over 900,000 positions previously thought to have been added to the US economy. Meanwhile, initial jobless claims spiked to a nearly four-year high in early September, with a single-week jump to 263,000 claims—the highest level since late 2021 and pointing to increased layoffs.

In contrast, the core inflation rate remains stubbornly high—persisting near 3% and in August registering 3.1%. The Fed has remained above its 2% inflation target for over 42 consecutive months, dating back to February 2021.

Amid this backdrop, the Fed decided to cut its key rates by 25 basis points to better support job growth while inflation remains well above target. The Fed has cut rates with the S&P 500 within 2% of an all-time high (like it is now) 20 times historically. In all 20 instances, the subsequent 12-month returns were positive, with an average return of +13.9%. 

One area that may not benefit as much from the interest rate cut is real estate. Since the Fed cut short-term rates earlier this week, the average 30-year mortgage rate has risen. This is because the long end of the yield curve is likely discounting heightened inflation risk going forward.  

 

 

Why The US Housing Outlook Is Turning Bearish

 

 

On a scorching August afternoon in Austin, a couple who paid $400,000 cash for a starter home in 2024 told Yahoo Finance they’re ready to walk away—absorbing a $40,000 loss just to be done with it. They’re not alone. Axios reports nearly half of homes bought in Austin since mid-2022 could now sell at a loss, the highest share among major metros.

Housing analyst Melody Wright recently told Thoughtful Money that a correction is “underway… and it’s spreading.” Here are three underappreciated forces behind the shift:

New homes undercut existing ones. In July, median new-home prices fell below existing homes for the first time in years, pressuring sellers to follow builders down.

Renting beats owning. Across big metros, monthly mortgage costs average 38% more than rent, sidelining buyers and slowing demand.

Demographics add supply. Aging Boomers and household consolidation mean more listings and less demand at the margin.

Together, these dynamics suggest 2025 could be the first broad down year for U.S. home prices in over a decade. 

Here is a list of major metro areas seeing the biggest declines: Oakland, CA (-27%), Cape Coral, FL (-27%), Austin, TX (-25%), Saint Petersburg, FL (-24%), San Francisco, CA (-16%).

 

 

The Benefits of Strategic Tax Loss Harvesting

 

 

Several new clients asked this week if Silverlight does proactive tax loss selling. The answer is yes.

One of the most overlooked benefits RIAs can deliver in a separate account structure is active tax loss harvesting. The mechanics are simple: sell investments trading below cost basis, realize the loss for tax purposes, and reinvest in a similar—but not identical—security to maintain exposure. Those realized losses can offset gains elsewhere, reducing a client’s overall tax bill and boosting after-tax returns. Importantly, losses not used immediately can be carried forward to future years, maximizing long-term planning opportunities.

Timing matters, though. Tax loss selling is usually concentrated in November and December as investors rush to lock in losses before year-end. However, a study by Russell Investments showed that harvesting losses several months before the end of the year, rather than in the final weeks, yields superior results by avoiding crowded trades and diminished liquidity. Proactive loss harvesting allows investors to sidestep price pressures and obtain better trade execution. 

This week, we sold NVO as a tax loss harvesting exercise. We flipped that allocation into another health care stock with better intermediate-term growth prospects, and gained a tax benefit. 

 

 

SoFi Technologies Investment Thesis

 

 

In a crowded fintech landscape, SoFi Technologies stands out with a simple but powerful thesis to own: it’s building the first true digital full-service bank.

Unlike most online challengers with narrow offerings, SoFi has created a one-stop shop for its members’ entire financial lives—from student loan refinancing to investing, mortgages, even estate planning. This breadth creates sticky relationships, cross-selling opportunities, and a structurally lower cost of acquisition.

The strategy is working. Since gaining its national banking charter in 2022, deposits have surged from $1 billion to nearly $30 billion, giving SoFi a durable funding base and fueling rapid net interest income growth. At the same time, its loan platform has attracted strong investor demand, allowing SoFi to monetize originations at favorable prices while scaling its ecosystem.

Expenses are high, but this is the hallmark of a company still in growth mode. With projected revenue compounding at over 17% annually, SoFi offers long-term investors exposure to a uniquely scalable digital banking model that traditional banks can’t easily replicate. Silverlight clients allocated to our Core Equity Strategy own SOFI.  

 

 

Agreeable Disagreement Is The American Way

 

 

If more of us could respectfully disagree with one other, the world would be a better place.

CNN's Van Jones recently chose to attend the Charlie Kirk memorial. It was a surprising revelation since the two were frequent political sparring partners in the media and definitely "not friends," according to Jones. But Jones had a change of heart about Charlie Kirk.

He shared that Kirk had reached out to him the day before his death via DM, inviting Jones for a civil discussion about political issues they vehemently disagreed on. “After he was murdered, my team called and said he was trying to reach you … This guy is reaching out to his mortal enemy saying, we need to be gentlemen and sit down together and disagree agreeably." 

Kirk’s message expressed a genuine desire for a thoughtful, courteous dialogue—a gesture that transcended the toxicity that often permeates our modern political and cultural divides. This moment reflects something deeply American. Our founders enshrined freedom of speech and assembly not so we could shout each other down, but so we could wrestle with opposing ideas without tearing our country apart. From spirited debates in Philadelphia in 1787 to kitchen-table arguments across generations, agreeable disagreement has long been part of the American way.

Here are three ways we can carry that tradition forward today:

• Politics: Ask clarifying questions before countering. It shows respect and keeps debates constructive.
• Workplace: Focus on shared goals when conflict arises—team success over personal pride.
• Personal Life: Separate the issue from the person; affirm the relationship even when views clash.

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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.​​