Shabnam Sorkhi 12/21/25 Shabnam Sorkhi 12/21/25

The Financial Industry in 2025: A Retrospective

The defining story of 2025 is not a single headline. It is a set of linked forces that changed how the financial industry thinks about risk and allocation: the dollar moved from backdrop to policy tool; hard assets shifted from optional to necessary; credit signaled first, and public prices challenged private valuations; and emerging markets became a clean way to express the macro - NOV 2025

Shabnam Sorkhi | NOV 9, 2025

One. The dollar became a policy tool, not a backdrop

In 2025, the working assumption around trade policy flipped: instead of treating tariffs as inflationary and dollar-supportive, the market increasingly treated them as growth-negative and dollar-weakening. That shift put currency in the foreground. Once FX is treated as policy, it becomes a first-order input to earnings, spreads, and fund flows, not just a housekeeping task.

The practical consequences follow directly from that view. International equity and bond sleeves no longer default to being fully hedged. Where the macro case argues for it, currency is allowed to contribute to returns rather than being neutralized. Local-currency fixed income is used expressly to carry the dollar view, not incidentally. Sector and regional tilts also line up with the thesis: basic materials, energy supply chains, and exporters with non-USD revenue gain relevance; selective non-U.S. value re-enters the conversation for the same reason. None of this requires speculation about who did what; it is the straightforward portfolio expression of a dollar that is being managed through policy rather than left to drift.

Two clarifications matter here. First, the dollar story is not linear. There were short-term bounces, but they did not erase the broader weak-USD framework. Second, the dollar view interacts with everything else below. Credit, commodities, and EM all read through it, which is why the year’s other signals are easier to understand if you start here.

Two. Hard assets moved from optional to necessary

Gold’s performance turned a theme into a policy. The initial acceleration was sharp, but the more important point is that the bid persisted and broadened. Miners, which had lagged spot for years, finally began matching in April and then, in stretches, led. That alignment is what shifts a metals sleeve from tactical to strategic.

Silver provided a simple decision level. A sustained break through the mid-30s switched the conversation from “if” to “how much” and “in what form.” The implementation was straightforward: buy metal for purity, miners for operating leverage, or long-dated out-of-the-money calls on a silver ETF as a defined-risk expression. The point was not to forecast every tick; it was to set rules before the tape moved and to size positions so a right-tail outcome could actually matter at the portfolio level.

By mid-year and again in late October, investors holding a configuration of gold, silver, miners, and platinum alongside EM-local debt and non-U.S. value were clearly well-positioned. The strength in metals and the broader macro alignment validated that setup. Hard assets were not a side bet; they sat within the same framework that linked currency, terms of trade, and policy risk. The takeaway is simple: when the dollar is the central macro variable, metals can play a meaningful role rather than a token one.

Three. Private credit signaled trouble first

Private equity operated in a tougher environment for exits and fundraising, and attracted most of the daily attention, yet the clearer signal came from private credit, where signs of stress appeared first. Publicly traded BDCs, which hold loans described as substantially similar to those in private vehicles, traded at persistent discounts to published NAVs. A visible gap between public prices and posted private marks is not just a footnote; it changes behavior. The industry consequences are mechanical: new capital slows when comparable risk can be bought at a discount in the public market.

Four. Emerging markets were a straightforward way to express the macro view

Money began to move into EM, where balance sheets looked cleaner. In a softer-dollar environment, commodities and international equities were expected to benefit, putting non-U.S. exposure back in focus. That showed up in positioning, notably Latin America (e.g. Brazil and Colombia). Even when a short-term dollar bounce was anticipated, the stance was to keep international equity funds, treating it as a counter-trend within a broader downtrend; that is, stay with EM and non-U.S. allocations rather than unwind them.

Five. Policy signals that moved markets

Two policy signals stood out in 2025, not because they changed the official settings on the day, but because they reset expectations.

Mid-year: A U.S. debt-quality scare reframed sovereign risk and reminded markets that the “risk-free” curve can carry real beta. The effect ran through duration and funding assumptions, prompting a fresh look at liquidity and stress tolerances. The takeaway was practical: portfolios had to account for a higher-volatility Treasury backdrop.

Late October (as of this writing): At the FOMC press conference, Powell said a December rate cut was not assured. Front-end yields moved higher by a little over 10 bps and the dollar gained roughly a handle, with many reading the USD as starting to break out from a base.

Where this leaves the remainder of 2025

As of early November 2025, the setup looks like this: The dollar has firmed recently alongside a divide over near-term rate cuts, a mix that has made equities feel choppy. Rate sensitivity leans on valuations, leadership narrows toward mega-caps, and smaller, more cyclical names lag.

For non-U.S. exposure, the weak-USD framework still underpins interest in international value, with the short-term dollar bounce treated as a detour rather than a regime change.

The credit picture still matters. The visible disconnect in publicly traded vehicles tied to private loans has been the reference point for how the space was discussed through the fall.

In hard assets, the view stays constructive over the long run, but runs through a consolidation. Metals led earlier, miners caught up, and the next leg depends on the dollar’s path rather than a single headline.

On policy, mid-year’s U.S. debt downgrade and late-October guidance reset expectations without changing the official settings. The result is a more volatile Treasury backdrop and a dollar that can move cross-asset pricing quickly, which argues for keeping position sizes measured into year-end.

Principles that Last: From 2025 into 2026

Own the view and size it to last. If you have a macro view, show it across equities, bonds, commodities, and other exposures, and keep it at levels that can handle sudden shifts. Set simple rules in advance for when to trim and when to add. Let credit speak first: public credit prices can give the early read on stress and often move before equities. Keep hard assets in the conversation; gold, silver, and miners earned a place alongside other macro expressions, and the case doesn’t disappear because of one headline. Express the macro simply; use straightforward ways to reflect your big idea (e.g. currency and terms-of-trade effects) rather than structures that blur the signal. And, treat words as risk: the 2025 headlines showed that guidance can move the path even when policy does not change. Plan for detours without abandoning a sound view.

Shabnam Sorkhi 9/24/25 Shabnam Sorkhi 9/24/25

Will AI Spell the End for Equity Traders but Spare the Sales Traders, the Charming Ones Anyway?

As AI threatens to turn equity traders into museum exhibits, their smooth-talking cousins, the sales traders, seem to dance around the digital bonfire. So, while AI crunches market data for breakfast, the real question is: Can it master the art of the handshake or out-charm a sales trader at happy hour? 2023

Shabnam Sorkhi | Equity Trader | 2023

Note the date on this article. I am writing it at a time when, in my town, hardly anyone has heard of ChatGPT, let alone used it. That will change quickly, of course. Today’s novelty is tomorrow’s inevitability.

The way we invest and trade is changing rapidly. Today, investors have powerful online tools at their fingertips and are becoming more financially astute. Breaking away from conventional methods, they are taking control of their investments through modern trading platforms. As this transformation unfolds, let's hypothesize that the traditional landscape of brokers and their sales relationships endures. If this is the case, we must ponder how the inevitable march of AI will redefine their roles and the very fabric of trading as we know it.

My first hands-on experience with AI began during my graduate degree in Civil Engineering in 2009. Back then, the concept was perceived quite differently from what many understand it to be today. We regarded "Artificial Intelligence" as a complex web of codes with the ambitious goal of replicating human thought processes as closely as hardware and software would allow. Yet, despite its grand title of "intelligence," we recognized that it was not truly intelligent in its own right. It was the product of our intelligence, a coded mimicry of cognitive functions that did not possess the ability to make independent decisions and was only as smart as its creator allowed it to be. Let's call this traditional AI "Vintage AI." For a tangible metric to track the evolution of Vintage AI, just consider the progress made in robotics. Although there have been impressive strides in this field, the ongoing quest for fully autonomous, decision-capable robots indicates that there is substantial ground yet to be covered. Or, look no further than the use of trading algorithms, representing the current peak of Vintage AI in the trading world.

The AI that is now a staple on many LinkedIn profiles is "generative AI," or as I like to call it, "Ladder AI," because shouting this buzzword in the room is the new corporate ladder workout. Ladder AI markedly diverges from its precursor, Vintage AI. Take, for instance, the well-known ChatGPT from OpenAI. By the beginning of 2023, ChatGPT had gained significant attention, not all of which was informed. Many seemed to either underplay or exaggerate its capabilities. Let me tell you what it really is. It is an application built on a natural language processing (NLP) model that employs a neural network to identify patterns within vast sets of data. This is why ChatGPT has a "knowledge cutoff date," recently extended from September 2021 to April 2023. ChatGPT operates on a closed dataset, without updating or learning from new data after its knowledge cutoff date, and leverages deep learning – an advanced subset of machine learning involving neural networks with multiple layers – to understand context and generate responses. In deep learning, these layers, analogous to neurons in the human brain, process input data in a hierarchical fashion. Based on its training, the AI measures how likely different sequences of words and phrases are. After assessing these probabilities, it selects and combines them in ways that form responses most in tune with the given query. So, don't fight Ladder AI, and don't make a deity out of it, just enjoy its algorithmic acrobatics.

As simple and ordinary as I made it sound, Ladder AI is a transformative force within the realm of Vintage AI. Serving as a user-friendly and powerful catalyst, it accelerates research and development across numerous sectors, enabling scientists and engineers to tackle complex artificial intelligence challenges. In my view, Ladder AI is comparable to calculators: tools that do not erode our intelligence but enhance our problem-solving abilities. Like calculators, which handle basic arithmetic to free up mental space for higher reasoning, Ladder AI automates mundane tasks, empowering us to focus on more creative and strategic activities within Vintage AI.

As we enter a more AI-integrated world, it is important to dissect and understand the contrasting impacts of AI on different roles within the trading landscape, especially those on the sell-side, gritty warriors of the stock market. Here sit the methodical, data-driven traders alongside the intuitive, relationship-focused sales traders. Although they share the common ground of the trading floor, the introduction of AI will likely carve distinct paths for each role's evolution.

It is fair to argue that the true value of a high-touch trader lies in their mastery of the mosaic theory, tile by tile, assembled through rigorous personal market experiences. This is precisely what AI can replicate and enhance. The role of AI in complex trading, especially in executing sizable block trades, would involve using its unparalleled pattern recognition abilities and extensive memory, surpassing the limitations of human recollection and data crunching capabilities. AI-driven block trading systems would tirelessly compile, save, and sift through a wealth of data, which encompasses historical trades and the intricate trends within individual client portfolios under numerous market and liquidity scenarios. Ultimately, the human brain's cognitive capacity to process the flood of market data is limited, while AI can manage and analyze this constant stream of information with ease.

This form of AI has the potential to assist traders in anticipating client preferences, not by operating autonomously but by enhancing their ability to meet the needs of their clients. For instance, the system might suggest that Liz from Company XYZ is 60% more likely to buy shares of ABC after their price has steadily dropped by 2% over one month. The likelihood of a purchase could further increase if influential figures in the market, such as John, discuss ABC on social media platforms. Insights from AI would contribute to more informed client discussions and personalized trade execution. What will happen when the clients choose to trade differently, also due to AI? This question hints at a brewing storm, a potential overhaul. A revolution, if you will. When that day arrives, the familiar landscapes of the market, as we know them, will never look the same.

Now, let's turn our attention to the sales trader: the author of those quintessential morning briefs in the trading world. As a sales trader, if you are reading this, you are well aware of the value placed on your morning commentary. Should uniqueness fail to characterize your notes, their necessity may eventually come into question. Currently, sales traders maintain an advantage, thanks in part to copyright laws and institutional security policies. However, as AI continues to advance, the long-term viability of this advantage and the demand for manually curated morning notes could be put to the test. Ladder AI would be particularly adept from this perspective, capable of processing and disseminating news more quickly and with fewer errors.

Before we give too much credit to the silicon and chips brigade for their advancements, let's take a moment to consider a day in the life of a charismatic sales trader named Alex. It is early morning, and Alex is already up, but rather than diving into spreadsheets, they are perfecting their espresso game. Their morning note to clients isn't just dry stats; it's peppered with personal touches, like their famous Tuesday pancake tip. A day in Alex's life is less about number-crunching and more about catching up with clients on last night's game or little Timmy's latest goal. Lunch is more than just eating; it's about sealing deals with a side of smiles and shared stories at a downtown spot. The afternoon is filled with calls that might start with stock picks but end up in shared laughs about a quirky relative's dance moves. When the market closes, Alex isn't stuck behind screens; they are out on the golf course or enjoying dinner at an upscale restaurant where bonds are formed, and deals are done.

Indeed, therein lies the magic of their profession; sales traders offer critical advantages in building trust and ensuring confidentiality, keys to client relationships that AI has not mastered. It would be naïve to assume that deals simply happen because they are objectively good or that a client is convinced solely by the deal’s merits. Rather, transactions are often a result of trust and connections built on shared experiences, elements that sophisticated AI cannot duplicate.

AI may be excellent at identifying opportunities, but sales traders bring negotiation skills to the table. They persuade and argue for or against certain trades, which gets deals over the line. This involves a degree of creativity and spontaneous strategy that is responsive to the flow of a conversation and the reaction of the client, areas where AI is not yet fully competent. Sales traders tailor their advice, adjust the way they communicate, and even choose the right time to interact in a way that aligns with each client's individual personality and life circumstances, showing a level of personal attention that creates stronger bonds and trust. In contrast, AI struggles to perform nuanced interpretations of human behavior, often described as “reading between the lines.” During conversations and negotiations, it is this skill that allows sales traders to craft real-time strategies that address their clients' spoken, but more importantly, unspoken needs.

In times of market volatility, regulatory changes, or complex corporate actions, the value of a sales trader's expertise is magnified. They play an essential role in offering clients reassurance grounded in a thorough understanding of ethical practices, strict regulations, and the intricacies of corporate events, services that the data-centric approach of AI cannot fully replicate. During periods of uncertainty, it is the human element – the empathetic support and seasoned counsel of a sales trader – that provides clients with dependable and personalized guidance. This underscores the indispensable role of human insight in an industry that is increasingly influenced by technological innovations.

Now, for a moment of levity, take a breath, sales traders, for your role is not yet on the endangered list. Your position continues to stand strong against the waves of innovation. Curiously, it seems that you are the ones putting up a stiff resistance to the silicon tide, more so than your trader counterparts. The secret to survival may not lie in the intricacies of your sales trading intellect, as formidable as it may be, but rather in the irreplaceable human charm. The idea that AIcould replace these personal aspects of client engagement seems as improbable as robots leading a wine tasting, which seems unlikely in our lifetime. Yet, don't rest too comfortably; it's time for a little introspection.

Next, on your to-do list: a quick mirror check. Ask yourself: Is your face the kind that puts people at ease and makes them want to stick around? Are you the person everyone is glad to see in a room? It might be time to consider a life coach or a visit to a plastic surgeon if you are feeling brave. In a world where AI could be your new coworker, remember that a genuine smile and solid people skills are your secret weapons.

Shabnam Sorkhi 9/22/25 Shabnam Sorkhi 9/22/25

President Trump Will Have One Policy: Keep the Market Happy!

As the market tries to decipher what a Trump presidency will look like, one aspect that doesn’t seem to get enough attention is that whatever he does, he cares deeply about the stock market’s performance - 2024

Shabnam Sorkhi | SEP 2024

During President Trump's previous term, it was clear that he took cues from the stock market, often gauging the success of his policies based on how markets reacted. This was evident when Trump would walk back aggressive stances (such as tariffs) if they led to market downturns. Therefore, in a potential second term, it's reasonable to expect him to continue this approach, avoiding policies that could disrupt economic growth or cause significant market sell-offs. This sensitivity to market reactions means that even aggressive policy positions could be tempered quickly if they threaten to destabilize the financial landscape.

Using SPY as the market indicator, we can see clear patterns where his comments or actions led to volatility, and his subsequent adjustments helped stabilize or boost the market. This behavior could be factored into any forward-looking trade ideas, as it suggests that a Trump presidency would likely avoid drastic actions that would lead to sustained market weakness.

The next four years of Trump?

Simple: buy the dip, ride the rally, and keep your eye on his X account. Expect volatility, but don't bet against the market for long. He will step in with the “presidential put” to prop it back up. Stick with pro-business sectors, and stay ready to pivot when he does.

If you are banking on a ruined relationship with China or certain sectors taking a hit, those trades might not play out as expected. History shows Trump won't let things collapse in a way that hurts the market. He would adjust, pivot, or soften his stance to keep things steady.

But, don't just take my word for it. Let's look at how the S&P 500 moved during his presidency. The pattern speaks for itself.

1. January 2018 - Trade Negotiations (War) Escalation

Event: Early 2018 marked the beginning of escalating trade tensions between the U.S. and China. Trump announced tariffs on Chinese goods, prompting fears of a trade war. The market reacted negatively, with SPY dropping significantly in late January and early February 2018.

Trump’s Response: After significant market weakness, President Trump began hinting at possible negotiations and even suggested that tariffs could be avoided if a deal was reached. This softer tone helped the market recover in the weeks following.

SPY Performance: After declining sharply in late January and early February, SPY found support and began recovering in late February through March as Trump's rhetoric softened.

2. March - April 2018 - Steel and Aluminum Tariffs

Event: In March 2018, President Trump announced tariffs on steel and aluminum imports, citing national security concerns. The announcement led to fears of a trade war, triggering a drop in SPY. Markets reacted negatively, fearing that retaliatory tariffs from other countries would escalate into a broader conflict.

Trump’s Response: Following market reactions, Trump softened his stance, allowing exemptions for key trading partners, including Canada, Mexico, and the European Union. This alleviated some fears of a full-blown trade war, leading to a recovery in SPY.

Notable Tweet “Looking forward to 3:30 P.M. meeting today at the White House. We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military.” – Trump, Mar 8, 2018

3. August 2018 – NAFTA Renegotiation and Canada Concerns

Event: Throughout 2018, the Trump administration was focused on renegotiating NAFTA. In August, after reaching a preliminary deal with Mexico, President Trump threatened to exclude Canada from the new agreement if a deal wasn't reached quickly. This uncertainty led to a brief dip in SPY, as markets were concerned about potential disruptions to North American trade.

Trump’s Response: Following market reactions, President Trump softened his tone, indicating a willingness to negotiate further with Canada. Eventually, the US, Canada, and Mexico agreed to a new trade deal (USMCA), which eased market concerns, and SPY rebounded.

Notable Tweet “Deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of or there will be no deal. New President of Mexico has been an absolute gentleman. Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!” – Trump, Aug 10, 2018.

4. October - December 2018 - Trade War Dynamics and Multiple Rounds of Tariffs Announced

Event: Throughout late 2018, markets experienced significant volatility, with SPY facing a correction. A major contributing factor was the ongoing trade war, which escalated with multiple rounds of tariffs announced by the Trump administration. The market feared prolonged economic impact, leading to a sell-off.

Trump’s Response: By early December 2018, after a particularly harsh market reaction, President Trump expressed optimism about reaching a trade deal with China. He even referred to a phone call with President Xi, suggesting progress. This comment, despite skepticism, helped stem the market's decline. Later that month, Trump indicated potential pauses in tariff escalation.

SPY Performance: SPY fell sharply from early October to late December 2018, however, after Trump's softer rhetoric in early December, the market began to stabilize and rebounded sharply starting in late December, heading into January 2019.

5. May - June 2019 - Trade War Negotiations (Huawei Ban, etc.)

Event: In May 2019, President Trump escalated the trade war by placing Huawei, a Chinese telecom giant, on a trade blacklist, effectively banning U.S. companies from doing business with it. This move led to heightened trade tensions and a sharp sell-off in SPY, as markets feared further retaliation from China.

Trump’s Response: After the significant drop in SPY, Trump signaled that the Huawei ban could be lifted as part of a broader trade deal with China. This softer stance helped alleviate fears and contributed to a market recovery in June, particularly during the G20 summit, where he announced that US-China trade talks would resume. SPY started to bounce back.

Notable Tweet “I had a great meeting with President Xi of China yesterday, far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate. China has agreed that, during the negotiation, they will begin purchasing large...” – Trump, Jun 29, 2019.

6. August 2019 to January 2020 – China’s Currency Manipulation and Phase One Trade Deal

Event: In early August 2019, after China allowed the yuan to weaken past the key 7-per-dollar level, Trump's administration labeled China a "currency manipulator," escalating trade tensions. This announcement, along with existing tariff threats, led to a significant downturn in SPY, as markets reacted negatively to the prospect of further trade barriers.

Trump’s Response: Facing market turmoil, President Trump began to backtrack by stating that trade talks with China would continue, hinting at potential delays or pauses in new tariffs. This helped ease investor concerns and led to a partial recovery in SPY by mid-September.

Leading up to October, the trade negotiations had created significant uncertainty. SPY was volatile as markets feared a prolonged conflict with China. Trump, facing this market volatility, announced a "phase one" trade deal with China, reducing immediate trade tensions. The announcement of this initial deal, even if not comprehensive, helped calm markets, leading to a rally in SPY through the end of 2019.

In January 2020, Trump and China officially signed the phase one deal, which included commitments from China to purchase U.S. goods, easing trade tensions. The finalization of the phase one deal reassured markets, leading to a continued rally in SPY. The market viewed the agreement as a de-escalation of the trade war. President Trump's willingness to negotiate and finalize the deal signaled a market-sensitive approach to his policies.

Notable Tweet “As usual, China said they were going to be buying “big” from our great American Farmers. So far they have not done what they said. Maybe this will be different!” – Trump, Aug 13, 2019

Notable Tweet “We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder....” – Trump, Dec 13, 2019

7. March 2020 - COVID-19 and Economic Stimulus

Event: The onset of the COVID-19 pandemic in early 2020 led to unprecedented market volatility. SPY saw sharp declines in March 2020 as the pandemic spread and concerns about a severe economic downturn grew.

Trump’s Response: As markets continued to fall, Trump shifted his stance and began pushing for significant economic stimulus packages, including direct payments to Americans, support for businesses, and expanded unemployment benefits. This massive fiscal response, coupled with Feds actions, helped stabilize SPY, leading to a recovery in the subsequent months.

Notable Tweet “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!“ – Trump, Mar 16, 2020

8. May 2020 – US-China Trade Relations Amid COVID-19

Event: In May 2020, amidst the ongoing pandemic, tensions between the U.S. and China flared again. President Trump criticized China for its handling of the COVID-19 outbreak and hinted at the possibility of ending the phase one trade deal. This created renewed uncertainty, leading to a dip in SPY as markets feared a re-escalation of the trade war during an already fragile economic period.

Trump’s Response: After markets reacted negatively, President Trump softened his tone, stating that the trade deal was "intact" and expressing a desire to maintain the agreements. This clarification was crucial in calming market fears and helped SPY recover once again.

Notable Tweet “As I have said for a long time, dealing with China is a very expensive thing to do. We just made a great Trade Deal, the ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference - and all those innocent lives lost!” – Trump, May 13, 2020

Notable Tweet “The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!“ – Trump, Jun 22, 2020

9. August 2020 - TikTok and Tech Stocks

Event: In August 2020, President Trump issued an executive order to ban TikTok in the U.S. unless its American operations were sold to a U.S. company, citing national security concerns. This action caused market jitters, especially among tech investors, due to fears of increased regulatory crackdowns on Chinese technology companies.

Trump’s Response: Following market uncertainty, President Trump softened his stance by approving a deal that would allow Oracle and Walmart to take stakes in TikTok's U.S. operations, effectively avoiding a full ban. This move helped mitigate market fears of further tech disruptions and contributed to a recovery in SPY, especially tech-heavy sectors.

“I have given the deal my blessing. If they get it done, that's great; if they don't, that's ok too. I approved the deal in concept.“ – Trump told reporters on the White House South Lawn (Sep 2020)

The Financial Industry in 2025: A Retrospective

Will AI Spell the End for Equity Traders but Spare the Sales Traders, the Charming Ones Anyway?

President Trump Will Have One Policy: Keep the Market Happy!

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