Divine Insights ✨
🍂 September 2025 🍂
Dear Divine Clients & Friends,
September is the season of harvest — apples and pumpkins here in the Hudson Valley, but also the return to structure after the looseness of summer. Kids are back in school (and college!), workplaces are shifting into high gear, and somehow Halloween candy is already lining store shelves. At our table, we’ve been laughing at how fast the season turned and the deer ate all my perennials. It feels fitting that markets, too, are moving into a transitional, bulking-up-for-winter mood.
Welcome to Divine Insights. Each month we’ll step back from the noise to look at the forces shaping markets and the economy. Our focus is on one or all of the five themes that guide our investing https://www.divineassetmgt.com/ and our work with clients: Global Lens, The Sheconomy, Connected, Wellness and Power, and Energy. By connecting the dots across these areas, our goal is to help you see where risks and opportunities are forming — and how they might impact both investments and businesses.
1. Global Lens 🌍
From New York to Tokyo to São Paulo, markets are breaking records. The S&P 500, Nikkei, FTSE, Euro Stoxx 50, Mexico’s IPC, and Brazil’s Bovespa are all at or near all-time highs. Only China stands apart, up more than 40% over the past year but still well below its 2007 peak.
Source: Tradingeconomics.com and Divine Asset Management
What makes this moment unusual is the backdrop. We’re seeing these highs at the same time tariffs are rising, trade relationships are fracturing, and central banks are moving in different directions. The U.S. market is trading at valuations not seen since the dot-com bubble of 1999/2000. Earnings are growing, yes, but not fast enough to explain all of the enthusiasm. So what’s driving it?
Part of the story is liquidity and expectations. Investors are looking past tariffs and betting on the helpful hand of Central Banks; in the US we are expecting Fed rate cuts this week and later this year.
Another piece is scarcity of growth: with global manufacturing still sluggish, capital is crowding into tech, infrastructure, and anything tied to AI and energy demand. And then there’s behavioral momentum — when markets are at highs, money often chases what’s working.
The gains aren’t without merit - corporate profits have held up as shown from the chart below, and consumers continue to spend. But it does raise the question: are markets celebrating a stronger economy, or simply pricing in the best-case scenario?
2Q earnings CHART
A signal we watch closely is unemployment. The numbers are softening, and companies are reacting by adjusting inventories, slowing expansion plans, and even pulling back on employee benefits. Sherwin-Williams is a case in point — they recently paused their 401(k) match, a move that often comes before deeper cuts. Yet on the same earnings call, their CFO proudly announced they had returned $716 million to shareholders through buybacks and dividends. Some companies need to get their priorities straight.
It’s the risk of unemployment tipping upward that has the Fed poised to cut rates this week. A quarter-point cut to the Fed Funds Rate of 4.25 % to 4.50 % won’t provide much relief, but a half-point cut risks signaling more trouble than stability.
Our stance: we’re enjoying the ride but staying clear-eyed. That means being cautious in areas where valuations are stretched and trade frictions could bite, while leaning into the quieter opportunities — the infrastructure that will be needed regardless of politics, tariffs, or headlines.
We’re defensive where tariffs could bite (import-heavy industries, companies overly tied to one market).
We’re leaning into energy-adjacent infrastructure — grids, data centers, and power solutions.
We’re keeping global diversification in place, because interest-rate paths are not moving in lockstep.
We’ve raised cash, which means we have cash in money market instruments that are earning a yield while we wait for opportunities.
2. The Sheconomy 💃
U.S. retail sales rose ~0.6% in August, beating expectations and showing that people are still buying, from clothes to gadgets. At the same time, real consumption (adjusted for inflation) has ticked up only modestly, suggesting that many of these gains are from prices rising rather than big jumps in quantity.
Women, who already make the majority of spending decisions, are reporting more financial stress than men. Inflation and uncertainty are hitting their sense of security, which has a ripple effect on where dollars go. That means essentials are protected, but “extras” — from big-ticket fashion to home improvement — are getting squeezed.
At the same time, we’re seeing something more unsettling: the political and legal backlash against DEI. Over the past few months, diversity programs have been rolled back in government agencies, major universities have been forced to strip out DEI infrastructure, and corporations doing business with the U.S. government are retreating from commitments they once held up proudly.Some big names (e.g., Goldman Sachs, Deloitte) are quietly scaling back DEI policies, removing pronouns from email signatures, changing or dropping DEI hiring/disclosure commitments. Others resist but are doing so under increasing legal, political, and reputational risk. Even a Fed governor is under attack.
Verizon Communications
Ended its DEI programs: removed DEI website, dropped DEI references in employee training, no longer maintain workforce diversity goals or use diversity in compensation metrics.
Reuters: “Verizon ending DEI programs as it seeks US approval for Frontier deal.” (Reuters)
Tractor Supply
Eliminated all DEI roles; retired its DEI goals; stopped sponsoring non-business/pride/voting-related events.
AP: “Which US companies are pulling back on diversity initiatives?” (The Associated Press)
Citigroup
Dropped some external DEI reporting, removed “aspirational’ representation goals; DEI teams scaled down or merged; references scrubbed.
Unleash.ai & other reports: “DEI: Which companies have rolled back...” (UNLEASH)
PepsiCo
Shifted away from its previous DEI approach, replacing the language with a new strategy (‘Inclusion for Growth’) and dropping certain DEI functions.
Unleash.ai & related coverage. (UNLEASH)
Walmart
Ended or scaled back multiple DEI trainings, diversity supplier preferences, closed its racial equity center, and withdrew from certain diversity indexes.
AP & Guardian: “Walmart rollbacks of DEI policies.” (AP News)
Lowe’s
Stopped participation in external DEI indices, scaled back DEI programs, no longer committing to non-business DEI sponsorships.
TheMus, 2025 coverage: “Lowe’s Is the Latest Retail Chain to Curb DEI Programs” (Them)
Cracker Barrel
Removed its DEI web page; eliminated DEI-specific positions and references; removed LGBTQ+ content from policies and materials.
NY Post / Fox Business: “Cracker Barrel eliminates its DEI web page...” (New York Post)
For those of us who’ve long seen women and BIPOC professionals power the economy, it’s a shock. DEI has never been window-dressing — it’s been about access, opportunity, and ultimately performance. Pulling DEI down is dismantling systems that helped broaden participation in the very economy driving these record market highs.
3. ⚡ Connectivity ⚡
Phones, streaming, AI (hi Teddy 👋), the Internet of Things — everything that ties us together has been buzzing this summer. And while the headlines keep circling around “AI hype,” the real story is in the plumbing: the data centers, fiber, 5G, and edge computing that make all of it possible.
Spending on data centers hit records this summer as Big Tech raced to keep up with the demands of AI. In June, U.S. spending on data centers hit a record $40B, up ~30% year-over-year, driven by AI/ML demands. Hyperscalers like Microsoft, Amazon, Alphabet are racing to build more capacity.
Networking companies are reporting order books stuffed full of switches, servers, and routers — all to support the flood of machine learning. 5G, once marketed as “faster for your phone,” is now being redefined as the backbone for edge computing and industrial AI. Without it, all those smart sensors and factory robots don’t work in real time.
IoT is having a quiet boom. Federal studies show that investments in IoT infrastructure — sensors, monitoring, smart grids — are paying back at rates of 10 to 20 times the cost. Manufacturers are finally moving AI from the pilot stage to the production line, where predictive maintenance and quality checks are saving real dollars. That shift is turning “AI” from a buzzword into a cost-saver, especially in logistics and industrial sectors.Manufacturers aren’t just tinkering anymore — many now have CEO-driven AI strategies for industrial applications: predictive maintenance, quality inspection, edge AI/agentic AI, etc. The industrial AI market was ~$43.6B in 2024 and is projected to grow at ~23% CAGR through 2030.
It’s not without hurdles. Building all this connectivity is expensive, messy, and increasingly regulated. IoT rules are tightening, spectrum allocations are political, and companies with global supply chains are still tripping over tariff walls. But the direction of travel is clear: AI and IoT aren’t side projects anymore, they’re core infrastructure.
Our focus: we’re staying close to the picks-and-shovels of this story — the infrastructure that keeps the lights on for AI and connectivity. These are businesses with long runways, real cash flows, and demand that isn’t going away just because the next shiny gadget comes along.
Good Sh*t 📚
Books, Podcasts, Ideas, or Videos
Scientists at Johns Hopkins University found that a blood test could detect cancer DNA more than three years before a patient receives a clinical diagnosis.
Just 1% of healthcare research and innovation is invested in female-specific conditions beyond oncology. But that’s changing; in August, The Gates Foundation announced a $2.5 billion commitment through 2030 to accelerate research and development (R&D) focused exclusively on women’s health. And Melinda French Gates has announced a new partnership that will commit $100 million to accelerate women's health research
Dani Hughes
Divine Asset Management LLC
📧 dani@divineassetmgt.com
🌐 www.divineassetmgt.com