{"id":98794,"date":"2025-10-02T09:52:07","date_gmt":"2025-10-02T09:52:07","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/98794\/"},"modified":"2025-10-02T09:52:07","modified_gmt":"2025-10-02T09:52:07","slug":"q3-2025-post-mortem-markets-continue-to-climb-gold-shines","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/98794\/","title":{"rendered":"Q3 2025 Post-Mortem: Markets Continue to Climb, Gold Shines"},"content":{"rendered":"

Autumn is here with falling leaves, football and October baseball. Turning our attention to the third quarter’s market, post-April’s recovery, there were heavy headlines, from tariff talks to jobs revisions, but market volatility stayed subdued overall.<\/p>\n

For investors eyeing retirement and portfolios, here’s what unfolded and what it means going forward.<\/p>\n

S&P 500’s steady climb<\/p>\n

Q3 further extended Q2’s rebound, with the S&P 500 up 8%<\/a> to just under 6,700, surpassing February’s peak. Fed rate cuts<\/a> and strong earnings<\/a> fueled five straight positive months, a bullish turn after Q2’s topping flirtation, and holding well above the 200-day moving average.<\/p>\n

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Valuations, however, flash caution. S&P’s forward P\/E hit 24x<\/a>, earnings yield is at 4.2%, matching 10-year Treasury yields. The price-to-sales ratio is highest on record at 3.3.<\/p>\n

The Buffett Indicator<\/a> climbed to 217%, topping the peaks during the dot-com bubble and before the 1929 crash, and two standard deviations above the long-term trendline. High valuations suggest leaner long-term returns, but they’re not reliable for short-term predictions.<\/p>\n

Technically, the market is at an interesting position as the S&P 500 nears a monthly channel ceiling, and the Russell 2000 eyes a double top. But momentum is strong, and the question is still open on whether this is a sustainable breakout or the setup for a pullback ahead.<\/p>\n

Speculative trading, with 0DTE (zero days to expiration) options at a record 75% of Nasdaq total options volume, fuels risk.<\/p>\n

U.S. markets were led by the Russell 2000 small-cap value index<\/a>. The S&P Equal Weight was one of the weakest areas as the Magnificent 7 powered much of the gain, led by AI-fueled and other momentum names.<\/p>\n

Across S&P sectors, communication services, information tech and consumer discretionary led with double-digit gains, while consumer staples lagged and was negative for the quarter.<\/p>\n

Takeaway:<\/strong> Raise some cash if you’re concerned about valuations. Rebalance if megacap strength continues, tilting toward mid\/small-caps or value for rotation potential.<\/p>\n

Global markets hold strong<\/p>\n

International stocks continued their uptrend, with the MSCI All World Ex-U.S.<\/a> up 5% in Q3. Emerging markets finished stronger, outperforming developed international and the U.S.<\/p>\n

The dollar steadied after the big first-half drop, leaving it with its worst year since 1973. International markets overall were led by China, Japan, Mexico and Spain, while India and Germany lagged.<\/p>\n

Overall, ex-U.S. stocks trade at 17x and emerging markets at 14x, while the S&P trades at 24x. Markets have been supported by global central banks having cut interest rates 168 times over the past 12 months, which is the third-highest reading this century.<\/p>\n

Takeaway:<\/strong> Allocating to international stocks buffers some U.S. risks. Favor emerging markets for value.<\/p>\n

Bonds steady amid yield pressure<\/p>\n

Bonds edged slightly positive in Q3, with the 10-year Treasury yield at 4.1%<\/a> after Q2’s spike. The 30-year dipped to 4.7%, post-September’s Fed cut, though inflation concerns lifted long-end yields.<\/p>\n

Annualized interest payments topped $1.1 trillion, fueling deficit debates. The average 30-year mortgage rate<\/a> is currently at about 6.4% as housing remains historically unaffordable.<\/p>\n

Globally, Japan’s 10-year yield hit 1.1%, and Switzerland’s held close to zero, highlighting divergence.<\/p>\n

Takeaway:<\/strong> Short-term bonds may hedge yield volatility. Emerging market local bonds add currency diversification.<\/p>\n

Gold’s momentum continues<\/p>\n

Gold<\/a> climbed to over $3,850 per ounce, having the best September in 14 years and best overall year since 1979. Gold miners (GDX<\/a> up 116% YTD) are scorching-hot.<\/p>\n

Silver is approaching $50 per ounce, its highest since 2011 (and 1980), poised for a historic breakout if it clears the level after decades of attempts. Platinum and palladium followed strongly.<\/p>\n

Dollar weakness from the first half of the year lingered as a tailwind, alongside central bank buying, geopolitics and fiscal concerns.<\/p>\n

Morgan Stanley now favors a 20% gold allocation<\/a> as a more resilient inflation hedge at a time when U.S. equities are offering historically low upside over Treasuries, while DoubleLine Capital CEO Jeffrey Gundlach, known as the “bond king,” believes holding a 25% gold position “isn’t excessive.”<\/a><\/p>\n

Gold is now the second-largest reserve asset, behind the U.S. dollar.<\/p>\n

Takeaway:<\/strong> If you lack precious metals exposure, explore a modest allocation on dips to hedge long-term inflation, adjusting for your risk tolerance.<\/p>\n

Crypto’s mixed bag<\/p>\n

Cryptocurrencies held strong in Q3, with bitcoin<\/a> (BTC<\/a>) above $110,000. Bitcoin now makes up 58% of the overall crypto market, which is valued at $3.9 trillion.<\/p>\n

Altcoins like ethereum, XRP and Solana outperformed bitcoin on momentum trades. Regulatory uncertainty looms.<\/p>\n

Takeaway:<\/strong> Limit crypto to 5% or less for most portfolios, favoring bitcoin for relative stability.<\/p>\n

Jobs under pressure<\/p>\n

Q3 job growth slowed, with the Bureau of Labor Statistics’ September revision from 2024-early 2025 the largest since 2000, slashing monthly averages to 70,000.<\/p>\n

AI’s impact grew: Walmart CEO Doug McMillon told The Wall Street Journal<\/a> that he plans to keep the company’s workforce at 2.1 million as AI reshapes roles.<\/p>\n

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Hiring froze, per the Federal Reserve’s so-called Beige Book<\/a>. The Fed is eyeing cuts to spur hiring, risking inflation (2.9% core PCE, the highest since February).<\/p>\n

Fed Chair Jerome Powell noted in a September 23 speech<\/a>, “Near-term risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation.”<\/p>\n

Takeaway:<\/strong> Bolster emergency funds<\/a> (six to 12 months’ expenses) and increase retirement contributions for AI-driven disruptions.<\/p>\n

What else can you do?<\/p>\n

Here are some actionable steps to consider:<\/p>\n