Every September brings its own ritual, the end of summer’s laissez-faire and the chaotic scramble back to reason, routine, and maybe even reality. This Sunday, I’m reacquainting myself with that peculiar rocky outcrop wedged between continents and currencies. Gone are the languid sea breezes and the lazy chorus of gulls over the Bay. In their place? The snappy artillery of school shoes ricocheting across the Rock, and the staccato murmur of parents swapping holiday tales; dissected, of course, between sips of caffeine and the latest whispered Fed rumour.

It’s the time of year when both children and capital return to class armed with half-finished homework, wistful memories of lost freedom, and a gnawing sense that September means someone will start marking the register. Trading desks refill, dealmakers and risk-takers swap sunburn for spreadsheets, and everyone sports a tan a shade too optimistic for the bracing discipline September insists upon.

If not wiser, we return warier and slightly more prepared for whatever fresh curriculum the gods of macro and monetary policy have pencilled in.

So, pour that strong café solo and let us sharpen our pencils for the lessons ahead. The only certainty? September will grade hard … testing the real schoolmasters this week; namely Powell, Lagarde, and that capricious headteacher called Volatility!

Where We Left Off (Week 35)

Week 35 fizzed with contradictions as President Trump’s latest assault on Fed independence collided with a market too busy to care. After all, why fret about constitutional chaos when dovish whispers from Powell promised cheap money and fresh highs for the S&P 500 and Nasdaq?

Gold flirted with new records as investors hedged against political mayhem, Bitcoin felt the aftershocks of a $1.4bn outflow, and geopolitical fires in the Middle East and Ukraine barely ruffled oil or risk assets.

Markets, it seems, chose Fed finality over democratic fundamentals, dancing ever closer to the dangerous delusion that only central bankers matter.

This Week 36, 2025: When Markets Get Marked; Red Ink, Rate Cuts, and the Detention of AI Darlings

Weekly Market Table 

US & Global Equities

• S&P 500 and NASDAQ: All-time highs are now a summer ritual, though the mood is less beach party, more exam results day. S&P held steady (+0.7%) at 5,652, with cyclical sectors advancing as tech names suffered a bout of September nerves. Nvidia took a (brief) pop quiz from Broadcom’s AI ambitions, but the school still can’t quit their AI homework!

• Europe: The STOXX 600 (+0.7%) and FTSE 100 (+0.2%) added to their summer grades, buoyed by banks and a fledgling “safe-haven” aura as the US political classroom descends into food fight. The UK just managing a pass despite trade tensions and political graffiti.

• Emerging Markets: The rally faded as hopes for China’s stimulus waned and capital flows returned to more disciplined markets. India and Brazil wobbled; Asia remains a hostage to both Beijing’s policy procrastination and tariff tantrums from Washington.

Gold, Digital Assets and Other Assets

• Gold: Achieved a new academic record $3,395/oz. Structural safe-haven demand remains the teacher’s pet, but dollar strength and profit-booking clipped gold’s wings by Friday’s closing bell.

• Bitcoin & Ethereum: Bitcoin (CME $111,955) snoozed, with daily outflows and leveraged traders suffering their own “tardy slips” on their first day back to school. ETF dreamers lazing at the back of calls returned for the September term. But irrespective, digital assets remain in class: volatile, noisy at the back row but not yet expelled.

• Oil: Brent found itself in a mild disciplinary spell (-1.6% to $76.10), as swelling US inventories outweighed the usual Mideast turmoil. Geopolitics offered more bark than bite, leaving oil on the cusp but not yet on the principal’s list.

Macro & Policy

• Fed Policy: September rate cut now sits at a “99% likely” neat circle on the classroom whiteboard. Markets treat Powell’s guidance as gospel, though inflation’s sticky note and policy whiplash mean few dare skip this week’s lecture.

• ECB & Central Banks: The ECB has shut the rate-cutting textbook for now (holding at 2.15%), with “Caution” Christine Lagarde emphasizing the wonders of “data dependence.”

• Financial Repression: The debate over “homework for all” persists… negative real yields and regulatory nudges drive more capital to public debt, gently squeezing savers but keeping the bond class in orderly rows.

Geopolitical Analysis

• US & Fed Independence: The constitutional pantomime (Trump’s latest, again.. yawn, joust with Fed governance) briefly unsettled the classroom, but the market gave a collective shrug as dovish guidance overwhelmed the commotion. The principal’s office remains open until November…

• Middle East & Russia-Ukraine: Ceasefire speculation, more bark than bite! Brent shrugged, gold rallied, and traders marked the wars as “ongoing, but not exam-threatening.”

• Emerging Markets: Structural reform and transparency are now prerequisites for capital inflows. China’s “stimulus study group” continues to underperform, despite valiant cramming from policymakers.

What was Pertinent this week (week 36)?

US Jobs Data: The Curveball Everyone Saw Coming

Friday’s jobs report flunked expectations, missing forecasts and sending rate cut odds for September to a near-perfect test mark of 99%. While headline figures disappointed, the devil was in the labour force details: participation wavered, wage growth plateaued, and a growing group of discouraged workers never even showed up for the test.

Markets promptly pencilled in an “A for effort” for Powell’s September rate cut campaign, pushing US 10-year yields lower and sending growth stocks to the front of the class, even as caution remains the undercurrent.

The AI Head of Class Gets into a Schoolroom Scrap

If there’s one lesson this week, it is that generative AI can be as capricious as a home-room teacher after double espresso. Broadcom’s OpenAI partnership sparked as much panic as optimism, sending Nvidia to the digital naughty step and touching off a full-blown debate over which pupils make top of class and which are merely good at cribbing last quarter’s answers.

Profit-taking swept through the Nasdaq like a whisper down a school corridor, but seasoned tech-watchers know: a little playground scuffle often precedes the next round of gold stars for the AI elite.

Tariff Tensions: More Than Just Lunchroom Gossip

Trump’s tariff tantrums made a comeback, with the US threatening fresh levies and re-opening of old trade wounds, especially toward China and Europe. While the market’s attention has been distracted by Fed policy, rising protectionism is now bubbling up like a science experiment gone wrong in the back row.

This week saw emerging market equities and global supply chain shares get marked down as investors rushed to reassess exposures. But like with every recurring trade war drama, it’s the unseen homework … the longer lead times, the rising input costs, and the capital relocation … that matters most for final grades for the end of school term results.

Private Equity’s Macro Insights

Private Credit: Welcome to the Mainstream … BNPL Joins the Report Card

It has been a few weeks since this dispatch peered into the Private Credit classroom, but what a return to school! This week, US credit agencies upended the syllabus, declaring that “buy now, pay later” (BNPL) balances will sit right alongside traditional debts on the consumer’s official scorecard.

On the plus side, this is a much-needed look at America’s hidden leverage problem. Private credit managers now get a clearer view of who’s done their homework and who’s been quietly stuffing IOUs under the desk. With institutional capital still elbowing for yield even as the FED headmaster warns, “fundamentals may wobble,” this classroom is both brimming with opportunity and dusted with chalky pitfalls.

This newfound transparency is the ultimate school report. For the diligent, it’s a chance to shine—premium spreads and gold stars for those with real fiscal discipline, just as early signs of defaults begin to creep onto the attendance sheet. But as every class knows, a tough grading curve means there’s nowhere left for shortcut-takers to hide. As BNPL and similar student obligations go up on the class board, the weak links are marched to the front; riskier, highly-levered deals get the hairy eyeball in syndication, while the sharpest pupils grab the best seats and capital.

In the new school term ahead, thriving in this stricter regime will demand much more than a shiny pencil case. It is about on-the-ground underwriting, hard-earned scepticism, and the nerve to step back when the classroom gets rowdy. Private credit victors won’t just be the best-funded instead they will be the best-prepared, agile, and pragmatic, pivoting from class monitor to crisis counsellor as markets shift. In the late innings of the credit cycle, sharper judgement and sharper pencils will decide who’s writing essays at the teacher’s desk and who’s left behind after school, marking papers long past the bell.

Watch out, global liquidity … there’s a new kid in the playground.

The September Syllabus: Seasonal Volatility

In the last two weeks’ dispatches, “September” has been the quietly ticking clock at the back of the classroom and now, with trading desks refilling and pencils sharpened, volatility has strutted in right on cue.

The summer lull is history: spreads are widening, modest news headlines are sending portfolios to detention, and even the most seasoned asset allocators find themselves reaching for their favourite hedging tools as the homework piles up.

The calendar promises mid-month central bank tests and a raft of option expiries; the result is a market handing out tardy slips for complacency, with gold and other “A+” risk hedges rallying to new term highs.

If this sounds text-book familiar, that is precisely the point. September’s curriculum for capital markets of subpar jobs data, twitchy AI trades, policy drama, and the perennial threat of headline shocks remains. But as any jaded market headmaster will tell you, the only certainty this month is that conviction and resilience will get tested, and (as ever) the most valuable lessons can’t be found in the summer reading list.

Keep sceptical, inquisitive, and always challenge that schoolbook syllabus.

Dry Powder & Deployment Discipline: “Readiness” Is Not a Hall Pass

As September’s market opens its new term, private equity classrooms are groaning with record dry powder and yet the hallways feel eerily quiet, with real deal flow stuck behind the teacher’s desk.

The real lesson? Having cash to burn does not mean the summer homework was done. This term, discipline is everything; the ability to hold fire, to wait out messy headlines and just-outside-the-door volatility, is what separates honour roll GPs from those who chase every shiny opportunity right into detention.

In a year when political and policy teachers love surprise pop quizzes, the best managers are those who can quickly pivot locations, sectors, or deal types. “Readiness” is about preparation, not bravado … deploying capital only when the price is right, the story checks out, and the upside has more merit than mere momentum.

Only patient, opportunistic deployment passes the final exam in a market where every whisper and data print can trigger a scramble for exits or a crush for entry.

Bottom line: the old mantra of “dry powder, don’t panic” has given way to a new reality; be nimble, be global, and do the real homework before hitting “submit.” Those who do will be top of class; those who don’t may be stuck rewriting their investment thesis after hours.

Closing Thoughts & Week Ahead

School’s back in session on the Rock with fresh uniforms, new timetables, and that September hum of opportunity and nerves. Markets, too, are getting their homework: constitutional storms, surprise policy tests, and the perennial quiz of thin liquidity demand sharper pencils and even sharper minds.

Just as students must adapt to new teachers and sudden syllabus changes, investors face central bank; credit and regulatory curveballs. Those who thrive will balance discipline with nimbleness, ready to jot down opportunity when the bell rings and just as ready to sit on their hands when the playground turns rowdy.

So, as a new term kicks off, remember that the best aren’t always the biggest, but those who weather the questions with clear eyes and a steady hand. A fresh quarter awaits so sharpen your pencils, keep a steady helm, and as always … don’t forget your coffee.

Ed's Final Word

As ever, these reflections are mine and mine alone; not even those of Beaufort or anyone wise enough to keep their essays to themselves. Like the first day back after summer; scuffed shoes, fresh timetables, and a classroom brimming with unknowns still the markets demand curiosity, humility, and a willingness to learn (and unlearn) on the fly.

No matter how confident that classmate in the front row sounds, nobody really knows whether the next lesson will be a breeze or a stinker. Markets can turn faster than a teacher’s question at the end of lunch, and if you don’t watch the breeze, it may blow your notes clear off your desk.

So do your own homework, consult someone you trust if you’re stumped, and don’t be afraid to challenge the syllabus. Because if anyone claims to know what happens next, well, they don’t. Neither do I. That’s why today’s uncertainty is tomorrow’s most interesting lesson.

Stay inquisitive!

For Further Reading – Like Extra Credit in Ed’s Classroom

If today’s lesson left you wanting more, here’s your  “after class” reading ... no hall pass required:

Financial Repression Past and Future
“When even seasoned fund managers look for the answer key—macro forces that bend the grading curve.” BlackRock

Stablecoins payments infrastructure for modern finance
“Digital cash that crosses borders faster than a note sent down a classroom row—how stablecoins challenge the old rules.” McKinsey

AI reshapes private equity value creation
“Robots in the boardroom? Finally, something for the tech club to cheer about.” UKAI

Update on global tariffs for major countries
“Trade policy that rewrites the lunch menu—who gets an extra pudding, who gets detention.” Thomson Reuters

Nothing new about September slides for stock markets
“September: historically the pop quiz most portfolios fail. Take notes, hedge accordingly.” RBC Wealth Management

Supporting emerging markets and developing economies in developing their local capital markets
“If EMs were students, transparency and capital reform would be ‘required’ homework.”
OECD

Week 36, 2025: As school bells ring and Wall Street’s rulers snap, September grades both the bold and the blinkered so sharpen your pencils, stay curious, and keep a steady hand on your homework (and your coffee)!