Daily Commentary

MarketMinder’s View: This is a must-read featuring a warning from banks and the FBI about a scam that is presently circulating: Using banking information and other personal data acquired via the dark web, scammers are using technology to appear as bank fraud departments. They call customers and urge them to move money from their accounts into “protected” ones that are anything but. They often claim to be partnered with the FBI and will add an air of legitimacy by giving things like account balances and/or FBI “badge” numbers. Two general rules this article shares seem wise to us: One, “A bank will never call a customer and ask that person to send money.” And, two, “The Federal Trade Commission also has a direct warning for consumers, saying it is a scam if someone tells consumers to move their money to ‘protect it.’ ‘Never transfer or send money, cryptocurrency, or gold to someone you don’t know in response to an unexpected call or message.’” We will add a third: Any call that gets your emotions ramped up and urges you to disclose personal information or move money is likely a fraud. Simply put, fraudsters’ best tool isn’t AI, the dark web, phone number masking or anything like that. It is your emotions. Staying coolheaded and remembering that someone blindly calling you and urging immediate action is likely a ne’er-do-well is your chief defense.

MarketMinder’s View: The Institute for Supply Management’s Services purchasing managers’ index—a survey-based gauge of business leaders that aims to estimate the breadth of growth across the US’s chief economic sector—ticked down from 54.0 in March to 53.6 in April. Now, readings above 50 indicate more companies reported growth than contraction, so this downtick really isn’t very significant. But this article spends more time on the -7.1 point drop in the “new order” gauge. And yes, the 53.5 read is a notable cooling from March’s 60.6. But here again, this is still an expansionary read and some volatility is typical. Finally, the other area where this coverage focuses is prices paid, which was at 70.7—meaning a large majority of firms saw rising costs. But this is a breadth gauge. So is that surprising? We think not, considering oil and gas prices’ rise is so, so, so widely known. It doesn’t really tell you where things are heading … or even how much prices rose.

MarketMinder’s View: Citing an excessively weak yen (versus the dollar, chiefly), Japanese officials have conducted several days’ worth of interventions in currency markets, buying up yen and selling other reserve assets like dollars in an effort to prop it up. The government aims to do so to limit the weak yen’s potentially inflationary impact on import costs, particularly for energy. This article notes IMF rules allow governments to intervene three times in six months and still qualify as having a “free-floating currency,” so the fact the present multiday effort is tabulated as one move gives them some leeway to intervene again later. But here is the thing: Unilateral yentervention like this has a spotty record of success. Look at the four-year graph included. Both prior interventions since the pandemic needed two rounds to have “success,” which likely came as a result of broader market conditions and not the intervention itself. In 2022, for example, the yen began strengthening in October … as the dollar weakened against a basket of currencies. Ditto in 2024. Sure, the yen may play a role in that. But it is only 5.2% of the broad currency basket (source: Federal Reserve). It didn’t sway the whole basket. People make a lot out of currency interventions, but unless they are coordinated and global, they rarely have much identifiable and lasting effect. They are noise more than news for markets.