The $7 trillion waiting on the sidelines... This isn't what a top looks like... The government's stake in Intel... Trading grants for shares in the name of national security... This company might be next...
We're always looking for useful market indicators...
Daily headlines can move the market for a day or two. And sometimes I (Corey McLaughlin) might spend too much of my time and energy on them. But beyond the topics du jour, long-term investors can consider plenty of other signals and behaviors.
For instance, look at where money is or isn't flowing over longer periods of time. It can often tell you about where stocks or any other asset class will most likely go next... and how you might want to position your portfolio in response.
Here's one example...
My colleague Brett Eversole recently shared a chart with his True Wealth Systems subscribers that grabbed my attention. It shows the staggering record amount of cash that people have parked in money-market funds right now...
Total cash in money-market accounts recently topped $7 trillion, as Brett shared in last week's True Wealth Systems "Review of Market Extremes"...
And as Brett explained...
Investors dumped more than $100 billion into money-market accounts in just the past two weeks. That flies in the face of rising stock prices. And it means more cash is sitting idly outside the market now than at any other time in history.
Now, you may take this as a "bad" sign. Perhaps people are so scared about the economy, tariffs, politics, and the future of the country, they're content to put their savings in a steady-yielding cash account. Fine.
But if you're interested in the future direction of the stock market, this behavior also means something else...
This doesn't happen at market tops...
All of this money – and we repeat, it's $7 trillion – is not in stocks or actively invested in anything else. It's just sitting in a "safe" account generating a nice 5% or so yield, taking advantage of above-average interest rates.
To be fair, the amount of funds in money-market accounts tends to grow over time. But it typically ebbs and flows. And an extreme like we see today is worth noting.
All this cash is "dry powder" that people can pour into the market. This could be for any number of reasons... A few that come to my mind: lower interest rates, higher inflation, and "FOMO" when it comes to the AI boom.
As Brett said, though, the "why" isn't the most important part. It's the mere fact that folks are sitting on record cash. Look at history, as he explained to his True Wealth Systems subscribers...
Importantly, money-market assets don't tend to peak at market tops... They peak at bottoms.
We saw a peak in 2002... 2009... and 2020. Those were the three major market bottoms of this century. Folks start hoarding cash in dark times.
And people start putting dollars to work when things get 'brighter'...
We've seen some signs of that lately in pockets of the market (like the return of "meme stock" traders). But as Brett says, the numbers tell a bigger story.
All the excess cash on the sidelines is evidence that there's still a lot of skepticism of this bull market. And counterintuitively, that means it's only heating up. As Brett wrote...
Markets don't peak when everyone's buying. They peak when everyone has already bought... and when those buyers turn into sellers.
It's easy to believe any glimpse of bubbly behavior means the top is near. That's a losing mindset, though. It'll trick you into selling midway through a bull market... instead of riding the uptrend for all it's worth.
Today, we're seeing some of that bubbly behavior. The IPO market is coming alive... Big Tech companies are just a few years from spending $1 trillion annually on artificial intelligence... And it's starting to feel like you can make money no matter which stocks you buy.
Despite all that, the data shows that – as a whole – investors are not "all in."
On top of all this, stocks are also at new all-time highs right now... Some folks think that things can't get any better, and they're keeping their money out of the markets. That's not the case, Brett says...
We likely won't see a major peak until money-market assets begin falling.
As for today...
Since this is a daily newsletter... we report that the major U.S. stock indexes today remained at or near all-time highs, with small caps outperforming ever so slightly. The big headline was investors awaiting the latest earnings report from chipmaker Nvidia (NVDA) after today's close.
Nick Koziol wrote a preview about that on our free Stock Market Trends website earlier today, and we'll have a detailed analysis of the company's report tomorrow. In the meantime, Nick also closes things out today with a look at another interesting market development...
The government's latest 'national security' move...
On Friday, chipmaker Intel (INTC) announced that the U.S. government had taken a 9.9% stake in the company – worth about $8.9 billion. But this isn't a conventional capital investment and doesn't come with a cash infusion to Intel.
From Intel's press release on the deal...
The government's equity stake will be funded by the remaining $5.7 billion in grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act and $3.2 billion awarded to the company as part of the Secure Enclave program.
In other words... if Intel wanted to keep collecting its payout, it had to give something back. Altogether, the government will get 433.3 million shares of Intel at an average price of $20.47.
And Intel wasn't the only chipmaker that the White House has recently made a deal with...
Earlier this month, the government agreed to approve export licenses for Nvidia and Advanced Micro Devices (AMD) to send AI chips to China in exchange for 15% of revenue from the exports.
Both of these agreements are under the flag of a national security issue.
Since semiconductors go into just about everything these days (from smartphones to cars), securing the semiconductor supply chain could help ensure American businesses get the chips they need. That's where the government's Intel investment comes in.
As for Nvidia and AMD, the U.S. government wants America to build a leading position in AI. Holding back the necessary chips from a competitor like China could help do that.
Still, such government influence in the free market gets our attention.
Our colleague Dr. David "Doc" Eifrig criticized the government's chip "deals" with Nvidia in an issue of his Income Intelligence newsletter last week...
At the heart of our social system is the idea that you play by the rules and get a fair shake. You work and save, and your money is worth something. You buy an airline ticket... and don't get nickeled-and-dimed to bring your luggage along.
This Nvidia arrangement is not how the system is supposed to work. It's only a further devaluation of our system.
It's not just Intel...
On Monday, President Donald Trump said that there could be "many more cases" like Intel where the government buys a stake in the company. And we're getting an idea of where he's looking for the next deal.
In an interview with CNBC yesterday, Commerce Secretary Howard Lutnick shared that there's a "monstrous discussion" within the Trump administration about investing in defense contractors.
Specifically, he singled out Lockheed Martin (LMT), calling it "basically an arm of the U.S. government" because of how many federal contracts it wins.
Last year, the U.S. government alone accounted for 73% of Lockheed's sales – good for more than $50 billion in revenue. The story is the same for other defense contractors...
The government accounted for nearly 90% of Northrop Grumman (NOC) sales last year, along with 40% of the revenue of RTX (RTX), formerly known as Raytheon.
We're willing to bet that the White House will use the same reasoning as it did with Intel if it pursues a stake in defense contractors. Since the U.S. military relies on these companies, it's the purest form of a "national security" issue.
Still, when the White House has a mind to involve itself in any private businesses, investors should be cautious. And as Doc wrote in Income Intelligence, it's not limited to Trump...
You want your investments to stay off the U.S. government's radar.
Were we under a Democrat-led government, you'd want to be careful of sectors that the Democrats tend to regulate, like health care, housing, and energy.
In any political climate, Doc says folks should look for investments that have solid operations. As he put it...
Businesses that make money – real, significant cash flows – are the best way to protect yourself from the Great Devaluation. If the dollar loses money, these businesses can raise their prices. And they'll see their value rise (in dollar terms) to protect your wealth.
Only time will tell if Intel is the first of many more deals that publicly traded companies make with the government, or just a one-off. But one thing is certain... The White House hasn't lost interest in the idea.
In this week's Stansberry Investor Hour, Dan Ferris interviews Acquirer's Multiple and Acquirers Funds founder Tobias Carlisle, who discusses the opportunity in small caps... names the stocks and sectors he likes today... and addresses several noteworthy market shifts.
Click here to watch the full interview now... Subscribe to our YouTube page to watch more episodes, and listen to the entire Stansberry Investor Hour podcast at InvestorHour.com, or wherever you get your podcasts...
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In today's mailbag, feedback on yesterday's edition, which in part covered Trump's push to fire Federal Reserve governor Lisa Cook... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Mr. McLaughlin: You write in today's Stansberry Digest as if Lisa Cook has been found guilty. That hasn't happened, except in Trump's mind. You speak as if the mere allegation of guilt is sufficient to convict. Were that the case, Trump, himself, would be wearing orange and not trying to run the country. We pay a lot to receive your journalistic commentary on the economy. We certainly deserve a higher level of professionalism from you." – Stansberry Alliance member Bruce H.
Corey McLaughlin comment: I agree you deserve professionalism, and that is one of the things I aim to bring to this job every day. I'm sorry that yesterday's edition rubbed you the wrong way. But I have to disagree with a lot of your description of it.
As we wrote yesterday, Cook faces alleged mortgage fraud. We also said it's unclear if mortgage fraud, even if true, rises to the level of "cause" or if a president even has the authority to fire a Fed board member if it does.
And as we said, "The issue will be decided in court"... by which we meant both the president's authority to fire a Fed member and whether Cook even committed the fraud she's accused of. As your take on our issue suggests, we could have been clearer that we were referring to the fraud piece as well.
We have great respect for the court system, and we hope that most folks read our analysis in the way we intended it.
Anyway, we brought up this story because of its economic implications and the market signal to take from it. Rightly or wrongly, the market appears to be looking past the ordeal... since "everyone knows" Trump wants low interest rates, and attempting to get rid of Fed officials who think otherwise isn't a surprise.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
August 27, 2025
