The past two weeks have brought decisive shifts in global markets. The US labor market is showing signs of fatigue, supporting the case for rate cuts, while European spreads are widening, particularly in France. This is yet another confirmation of our earlier warnings that Europe and its economies would soon face headwinds, mainly due to misguided policy decisions, a point we have stressed consistently since the start of the year.
In this environment, investors need to readjust strategies, especially those who haven’t repositioned since early August, by seeking the right allocation across sectors and regions that can lead performance in the final quarter of the year. We advocate balance between value positioning and selective risk-taking in targeted sectors.
US: Weakening Labor Market, Rising Calls for Cuts
August saw just 22,000 new jobs created in the US, with unemployment climbing to 4.3%, the highest since 2021 but within expectations. More worrying was the annual revision, which revealed 911,000 fewer jobs between April 2024 and March 2025.
This reshapes expectations for the Fed. Markets are pricing in cuts, and even Bank of America now forecasts two rate cuts by year-end, a stark shift from its earlier stance of none, as growth momentum weakens. The recipe of prolonged high rates appears far less successful than intended. Bold cuts, perhaps starting with 50 bps, may now be required.
The move is already visible in 10Y US Treasury yields. As we wrote in our last piece, sidelined capital will begin to seek better returns once fear eases. Coupled with political inertia and flawed policymaking in Europe, this could accelerate disinvestment from European markets, a trend already visible in the mild pullback of European indices and the simultaneous rise of US benchmarks, still, in our view, trading at modest profit levels for the year.
Opportunities in Undervalued US Equities
We have repeatedly pointed out the significant opportunities stemming from undervalued US stocks. Recent sessions show a divergence: index performance does not fully reflect the returns of selective sectors and individual names.
Take Oracle, for instance: at the time of writing, its shares are up more than 35%, adding $300 billion in market cap on major news in the AI sector, a theme we have consistently highlighted. And this is only the beginning.
Our systems continue to confirm such opportunities, detecting them not only from relative valuations on the board but also from deeper market patterns.
Q4 Outlook: Volatility Across Assets
The final quarter of the year will be rich in opportunities, not only in equities, but also in commodities and FX. Volatility will be significant, rewarding those investors willing to approach markets with discipline and professionalism.
The Baltic Dry Index (BDI) maintains its upward trend, supported by strong activity and momentum in shipping, something we correctly anticipated months ago. The critical level to watch: 1,920 points.
Oil is expected to trade within a $60–70 range, offering attractive opportunities for investors who exploit the swings with speed and strategy. Natural gas is another likely outperformer; its strong performance this month has already rewarded early movers, and we believe this is only the start.
Currency markets, too, will remain fertile ground for aggressive-profile investors, particularly with policy shifts in Europe and Asia adding fuel to volatility.
Key Dates to Watch
- Sept 11 – ECB rate decision.
- Sept 17 – Fed decision (critical: will the expected 25 bps cut turn into something larger, and what language will Powell use?).
- Sept 19 – Witching Day: multiple derivative expirations, typically a turning point that can set market direction for weeks ahead.
The message is clear: this is not the time for “big bets” but for risk management.
An Invitation to Maritime Economies Readers
Free Portfolio Assessment
We are pleased to offer all our readers the opportunity for a free evaluation of their current portfolio. Using back testing and our proprietary systems, we assess whether the risk you have undertaken aligns with your investment objectives and expectations.
Our goal is to help every investor gain a clearer perspective and move forward with strategy, consistency, and confidence.
Remember: the greatest returns often emerge in periods of uncertainty, and today’s environment is living proof.
by Kotsiakis George
