5 Things We Learned This Week - 8/11/2025
August 11, 2025
To our loyal readers: 5 Things is back from our summer siesta! We will resume our normal publication schedule going forward.
The S&P 500 rallied 2.4% this week as investors shrugged off a spate of weak economic data. The Aggregate Bond Index fell 0.2%. Gold rallied 1.3% and Bitcoin jumped 3.0%.
The ISM Services PMI index came in below expectations, falling to 50.1. The Prices Paid index increased to 69.9, which is the highest reading since the inflation spike in 2022. Slowing growth and rising input costs signal stagflation risk, which could crimp corporate profit margins. Initial jobless claims clocked in at 226K, which was slightly above the survey but nothing to get alarmed about. The overall economy appears sluggish but steady.
The Top Performing Assets in 2025
The best performing assets in 2025 aren't what most investors would have put on their bingo card at the start of the year.
Gold is the biggest winner year-to-date, returning 29%. Gold has surged on the back of soaring safe-haven demand amid geopolitical tensions, elevated tariffs, and a softer dollar. At the same time, persistent inflation fears, expectations of Fed rate cuts, and accelerated central bank purchases have further propelled investors toward gold as an inflation hedge and store of value.
Bitcoin is the second biggest winner so far this year, returning 26%. Bitcoin's persistent bid is driven by robust demand from institutional investors via spot ETFs, growing corporate adoption, and heightened U.S. regulatory clarity. Bitcoin is gradually becoming more accepted by major institutions, as evidenced by the fact Harvard recently bought a $117 million stake.
Developed markets outside the U.S. are the third biggest winner, rising 20%. Many of the large European stock exchanges, like the German DAX, have dramatically outperformed the S&P 500 in 2025 thanks to a weaker dollar, more aggressive central bank easing abroad, and attractive valuations.
Emerging markets are the fourth biggest winner in 2025, up 20%. Emerging markets have outperformed largely due to a weaker dollar and renewed investor flows seeking diversification into undervalued regions with stronger real yields and accelerating growth, particularly in areas like Chinese tech and Brazilian commodities. Cost-effective AI innovation, more credible monetary policies, and improving earnings prospects have further enhanced their appeal relative to U.S. equities.
Last, the Utilities sector is the fifth biggest winner, up 16%. Utilities have benefitted from a powerful tailwind of soaring energy demand—particularly from AI-driven data centers—alongside steady, regulated revenue streams and attractive dividend yields that offer recession-resistant stability. Moreover, vast investment in grid modernization and transmission infrastructure, propelled by renewable energy expansion and electrification trends, has further strengthened their performance outlook.
We believe many of the current trends will persist into year-end and beyond. For this reason, Silverlight clients are presently overweight each of the above-mentioned themes relative to their portfolio benchmarks.
Nobody Cares About Tariffs Anymore
Not long ago, tariff announcements could send markets into a tailspin. Today, many investors barely flinch—and a big reason is the unpredictable nature of Donald Trump’s trade policy.
In 2025, tariff headlines have become a revolving door of proposals, rollbacks, exemptions, and “phase-ins.” One week it’s a sweeping tariff on European autos, the next week it’s delayed or re-targeted. The constant recalibration makes it hard to model long-term impact, and market participants have learned that many of these moves never fully materialize.
For traders and asset managers, the playbook has shifted: react less to the announcement and more to the underlying macro trends—like currency moves, inflation data, and earnings resilience. Until policy becomes more consistent, tariffs will be treated less as a structural risk and more as background noise.
So far this earnings season, tariffs haven’t dented corporate America as much as feared—many U.S. firms are beating expectations, helped by strong pricing power, resilient consumer demand, and diversified supply chains that dilute the impact of higher import costs. In some cases, companies have even passed on modest price hikes without hurting volumes, keeping margins intact.
Looking ahead, investors should watch for signs that tariff risk is rising—such as a slowdown in revenue growth for import-heavy sectors, margin compression in industrial and consumer goods firms, and guidance revisions citing trade policy uncertainty. A sharp uptick in input costs without corresponding price pass-through, or evidence of supply chain delays, could be early warning flags that the tariff backdrop is becoming a real drag.
Trump Accuses Pelosi of Insider Trading
In a blistering Truth Social post, former President Trump accused Nancy Pelosi of profiting from “inside information,” claiming she and her husband achieved investment returns that “beat every hedge fund in 2024.” According to public tracking, Pelosi’s stock portfolio soared roughly 70% in 2024, notably outperforming major benchmarks and legendary investors alike. Meanwhile, Republican Rep. Mark Green has also attracted attention—reportedly generating an eye-popping 122% return in 2023, prompting scrutiny over his trading performance.
Today’s laws, including the STOCK Act of 2012, require disclosure within 45 days and ban trading on non-public information—but only carry modest penalties and still permit these transactions. This combination creates potential conflicts of interest and ethical concerns. That’s why measures like the PELOSI Act, the Trust in Congress Act, and growing calls from figures like Elizabeth Warren to ban congressional stock trading outright are gaining traction as possible reforms to curb these practices.
FWIW: Silverlight now regularly monitors congressional portfolios for trading ideas.
Lovin Applovin Corp.
Silverlight recently initiated a position in Applovin (APP), a leading software platform that helps mobile app developers grow and monetize their apps using machine learning and advertising tools. The company’s proprietary ad engine, AXON, helps advertisers optimize user acquisition in real time.
This weeks' earnings report was met with enthusiasm across Wall Street. Applovin beat both revenue and earnings expectations, raised full-year guidance, and emphasized accelerating margins—all signals of operational excellence and improving scale. The shares surged 12% after the report.
We believe Applovin is a compelling way to play the broader “AI-Powered Digital Advertising” theme, which is benefiting from both automation tailwinds and the shift to mobile-first commerce. Applovin has very healthy operating margins near 40%. The company is expected to grow earnings 90% this year and 45% next year.
Our thesis: Applovin owns differentiated technology and proprietary data that create durable network effects. With high operating leverage, disciplined capital allocation, and continued innovation in AI-driven ad delivery, we think the company can compound value for years to come.
Diabetes Dolls Help Children Feel Accepted For Who They Are
When Mattel launched the first Barbie with Type 1 Diabetes — complete with a glucose monitor, insulin pump, and the authentic design details that matter to real families — it sold out almost instantly. The doll is a mirror for children who’ve never seen their reality reflected on a toy shelf. She wears her insulin pump proudly, her continuous glucose monitor peeks from beneath her sleeve, and she stands in a blue polka-dot skirt, the global color of diabetes awareness. For a child managing T1D, she says without words: You belong here, exactly as you are. And that’s the quiet magic — when we feel seen, we start to dream bigger.
When children feel accepted exactly as they are, it nurtures a sense of self-worth that becomes the foundation for resilience, confidence, and ambition. Instead of internalizing shame or feeling pressured to hide parts of themselves, they learn that their differences are simply one part of their identity — not a flaw to fix. As they grow, this mental model becomes a powerful source of empowerment: they’re more likely to advocate for themselves, form authentic relationships, and pursue goals without diluting who they are.
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.