Good morning. Yesterday, US second-quarter GDP was revised higher, while jobless claims fell notably from the prior week. The macroeconomy remains solid in aggregate, even while parts of it — housing and job growth, for example — are in rough shape. And speaking of rough: Unhedged is losing a great colleague today; see below. Send congratulations to Aiden, and condolences to the rest of the Financial Times’ New York newsroom: unhedged@ft.com.

Investor allocations vs valuations

A few days ago we wrote about allocations to cash and cash-like assets in investor portfolios. The topic is interesting because of the intuition that if individual and institutional portfolios have larger cash buffers, markets ought to be more stable. If investors have a cash buffer in place, and therefore a less extreme allocation to risk assets, it makes sense that they would be less likely to sell at the first sign of trouble, amplifying the sell-off. Whether this intuition is reliably correct, I’m not sure. Worse, I was unable to find much hard data on cash allocations, and had to resort to surveys.