No one is expecting a global boom. This former hedge-fund manager says it’s coming and has a way to play it.

A worker displays US dollar banknotes at a money exchange outlet in New Delhi on July 31, 2025. A hot India economy is one part of a contrarian call that says energy deserves a second chance, says this former hedge-fund manager. - arun sankar/Agence France-Presse/Getty Images

Investors are hoping Nvidia earnings will reignite a stock rally that has lost a bit of traction during August. Markets seem ready to go nowhere until those earnings hit after the close.

AI is not the only game in town, says our call of the day from former hedge fund portfolio manager and author of Your Weekend Reading (YWR) Substack, Erik Renander, who says expectations for a global economic boom are on few radars right now.

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Renander writes that China stocks, last year viewed as “uninvestible,” are “waking up” to that global boom view. The Hang Seng HK:HSI is up 25% versus a 9.9% gain for the S&P 500 SPX this year.

But global sentiment is clearly not buying the boom-y view, given the thirst for bitcoin, gold and AI stocks, he says. “The most consensus view is that the world can’t grow. Stagnate yes. Grow no. [Portfolio managers] say to buy inflation plays, and tech because the rest of the world is screwed. Nobody thinks a boom can happen,” he writes, offering a BofA chart from its monthly poll of fund managers.YWR/BofA -

More evidence to support his theory? The U.S. consumer, who is “always ‘rolling over,’” has never been in better shape, with low jobless levels and solid household balance sheets, boosted by the value of their stock market holdings as well as house prices, says Renander.

A weakening dollar DXY — down 9% this year — is another positive. “Everything in the cycle flows from there,” and that gradual weakening offers the “slow realization it’s safe to go back into the rest of the world,” he says.

Read:The central bank with the third-largest reserves is swapping dollars for euros

He also points to global business sentiment that’s been slightly improving, and potentially at a positive inflection point. European purchasing managers index readings are rising, and China’s could be next. Underestimated completely is India.

“We are all focused on how a chatbot, which can’t even do basic math, is going to steal all of our jobs, but is the real story here India? Do we have another China on our hands over the next decade?” he asks, offering this chart:YWR/Deloitte -

Onto the best way to play this global-boom prediction, which he says is oil, as he also warns it’s most unloved.

“Oil is hated because it needs real growth to work and that’s what nobody thinks can happen. Futures positioning is at record lows. Everyone prefers gold and bitcoin,” he says.

Story Continues

He expanded on this in a post last week, discussing how the S&P Oil and Gas Equipment XX:SPSIOP sector is the “worst performing sector of the last 10 years,” with a total negative return of 65% versus a 655% gain for semiconductors XX:SPT74.

Renander pointed out that India’s growth is likely being underestimated, along with its thirst for oil. If global oil production doesn’t grow due to companies not investing, with depressed upstream oil and gas capital expenditure, then “India’s demand will have to resolve itself through higher prices,” such as $200-per-barrel oil, he wrote.

And if traditional oil-producing spots such as Russia, the U.S, Canada, the Middle East, end up individually problematic, all new discoveries will be deep offshore in places like South America, Africa, Mexico and Asia.

“This is the setup for a massive squeeze in a sector which nobody owns, and nobody follows. And the story will be that the world is still growing, the world needs more oil, and it needs ‘safe’ oil from trustworthy jurisdictions with safe shipping lanes,” he said.

Subsea oil is particularly hated by investors, he said, suggesting investors look at a play via the recently announced Saipem IT:SPM and Subsea 7 NO:SUBC merger in offshore services.

The markets

U.S. stocks DJIA SPX COMP have opened largely flag, while yields on 10 BX:TMUBMUSD10Y and 30-year BX:TMUBMUSD30Y bonds keep climbing. The dollar DXY is higher.

Key asset performance Last 5d 1m YTD 1y S&P 500 6465.94 0.85% 1.49% 9.93% 14.93% Nasdaq Composite 21,544.27 1.08% 2.11% 11.57% 21.34% 10-year Treasury 4.274 -2.50 -10.50 -30.20 43.40 Gold 3430.4 1.13% 3.08% 29.97% 35.11% Oil 63.07 0.37% -10.28% -12.24% -15.21% Data: MarketWatch. Treasury yields change expressed in basis points

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The buzz

Nvidia earnings NVDA are due after the close, with investors expected to scrutinize China bookings and overall AI demand next year. Follow MarketWatch’s live coverage here.

CrowdStrike CRWD, NetApp NTAP and HP HPQ results are also on tap for later.

Kohl’s stock KSS is soaring to trade above $15 for the first time since Dec. 2024 on a sales beat in part powered by Sephora mini-stores.

Cracker Barrel shares CBRL jumped after the restaurant chain brought back its old logo following a backlash and objections from President Donald Trump.

Shares of MongoDB MDB are climbing after the documents database group lifted its full-year outlook again after forecast-beating sales.

Cloud-based banking solutions provider nCino NCNO lifted its outlook as results beat expectations. Shares are climbing.

Trump’s 50% tariffs on India are taking effect.

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The chart-

Using World Bank data, Rob Connors of The Crude Chronicles calculates that capital spending as a percentage of fixed capital formation from the tech sector has surpassed the oil and gas sector, which he says is more disciplined. He has a reason why: “A quick scan of the annual proxies of the high-flying tech sector shows that management compensation is not tied to things like profit margins, operating or free cash flow, capital and cost discipline, or my favorite, returns on capital.”

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

Ticker Security name NVDA Nvidia TSLA Tesla NIO NIO PLTR Palantir Technologies GME GameStop AAPL Apple AMD Advanced Micro Devices TLRY Tilray Brands AMZN Amazon INTC Intel

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