Daily Commentary

MarketMinder’s View: Indian GDP rose 5.4% y/y in Q2, well below expectations for 6.5%, due to weakness in manufacturing and mining. While that is much quicker than most other major economies this year, the growth disappointed many experts, which we find notable from a sentiment perspective. For a refresher, moods toward the second-largest Emerging Markets (EM) economy have been relatively warm this year, with many excited about its long-term growth prospects and as a beneficiary from firms leaving China. While we aren’t (and weren’t) down on India’s prospects, many of the reasons cited for bullishness were pretty widely known—and likely reflected in stock prices already. These latest data (and some of the economists’ recalibration of their forecasts) suggest expectations may have gotten ahead of reality a bit, which reinforces a timeless investing lesson: Markets are efficient discounters of widely known information. When the consensus is optimistic for similar reasons, question what the crowd may be missing—markets tend to do something different than what the consensus anticipates. For more, see our March commentary, “India: Solid Fundamentals, but Check Sentiment.”

MarketMinder’s View: Herein lies a disturbing but informative tale of one woman’s encounter with a highly advanced scammer. In this case, the criminal identified themselves as an “FBI handler,” calling the victim frequently to build a personal relationship. Unfortunately, this trust (the titular “Ether”) left the victim vulnerable to falling under the “ether” (i.e., getting someone in an emotional state, putting logic and rationality on pause). “These seemingly innocuous conversations are actually well-rehearsed orchestrations of a relationship, the flood of attention designed to work them into such a heightened state of emotion that they suspend reason.” The article also includes quotes from a scammer, who details their methods in reaching victims’ “emotional Achilles heel.” We recommend giving this piece a full read, but we have two main takeaways: First, beware any call from someone purporting to be from the government. A government agency will never call you out of the blue and ask for personal, sensitive information. Second, if you find yourself becoming emotional in a conversation, it is always wise to take a step back and breathe before revealing any information. Easier said than done, of course, but a level head is best to guide you forward—quick, emotional decisions can have serious consequences.

MarketMinder’s View: That titular pile refers to the money-market industry’s assets, per research outfit Crane Data. This piece takes on the popular notion that this sizable sum is the mythical “cash on the sidelines” that will fuel the next leg of the bull market, and in our view, it correctly breaks down some of the issues with this argument. For example, as one analyst notes herein, many folks may use money market funds in a manner similar to traditional bank accounts, using this cash for household bills or discretionary purchases—not a segment of one’s finances that would logically go into stocks. Moreover, we wouldn’t project some huge boost for stocks due solely to cash levels. The stock market is an auction, where prices move on buyers’ willingness to pay for shares. Prices rise when buyers are more willing to bid up, and vice versa—the number of buyers matters less than investors’ eagerness to buy. Stocks don’t require “new” money or buyers to rise. As the article touches on near the end, this fluctuating demand is tied mostly to investors’ expectations (sentiment) versus economic reality. Keep this in mind the next time hype spirals around the levels of “sidelined” cash. For more on this topic, see our March commentary, “The Trouble With the ‘Sidelined’ Cash Theory.”