Money Life with Chuck Jaffe

Zach Jonson, chief investment officer at Stack Financial Management, says that while the stock market has been moving to record highs, "it wasn't healthy." He says that market valuations are overblown, with concentration in the index being more of a concern than at any time in history, which means that current conditions are lining up with some rare time periods, most notably the tech bubble days of the late 1990s, which ended turning ugly when the bubble burst. That's in contrast with the view from Eric Wallerstein, chief markets strategist at Yardeni Research, who says the Dow Jones Industrial Average will reach 60,000 and the Standard & Poor's 500 will hit 8,000 before the end of the current decade, and while that run could end up ugly at that point, any downturns in the interim are buying opportunities. Plus, John Cole Scott, president of Closed-End Fund Advisors — chairman of the Active Investment Company Alliance — provides an update on what's happened with closed-end funds through the first half of 2024, and Jaime Dunaway-Seale discusses Clever Real Estate's Gen Z Home Buyer Report, which showed that 60 percent of the generation just entering the workforces thinks they will never own a home.

Eric Crittenden, chief investment officer at Standpoint Asset Management, says the market has weakened to where there are no "great, super-strong trends out there," but he thinks the market is entering a transition period where new trends will start and emerge. That transition may not include a recession, Crittenden says, because "the algebra says to me that it's going to be hard to have a recession," due to the government actions that have staved it off and made it hard to forecast what's next. Todd Rosenbluth, head of research at VettaFi, goes with something new as his ETF of the Week focuses on one of the nine new Ethereum funds that debuted earlier this week. Chip Lupo discusses the 2024 Money and Relationships Survey from WalletHub, which showed that nearly 40 percent of Americans have a financial account that their partner doesn’t know about. In the Market Call, Mike Bailey, director of research at FBB Capital Partners, discusses "beat and replace" investing.

Jeffrey Hirsch, chief executive at Hirsch Holdings and editor of the Stock Trader's Almanac — which tracks stock market performance relative to presidential terms and election cycles — says that while the upcoming election is no longer a battle between two second-term presidents, the potential election of a first-term president in Kamala Harris would not result in much change for the market. While first-term presidents historically hit the ground running and make some of their most drastic moves early, Hirsch says Wall Street is prepared to adjust, which leaves him more concerned with how the market will perform late in the term — in 2026 — than he is concerned with what happens close to the election. Adam Rozencwajg, managing partner at Goehring and Rozencwajg — which specializes in investing in natural resources commodities — discusses the recent rally in natural gas and makes the unusual case for it as a play that's adjacent to the artificial intelligence boom. And speaking of "AI-adjacent" investment potential, that's exactly one of the things currently appealing to Brian Mulberry, portfolio manager at Zacks Investment Management, who talks about it among his stock ideas in the Money Life Market Call.

Dec Mullarkey, head of investment strategy and asset allocation for SLC Investments, says investors are "pretty risk-on," meaning they expect the economy is headed to an environment where rates will settle down at reasonable levels and consumers will keep spending, creating a sound environment for investors. That extends to Europe and some international markets, which will help balance a portfolio that may be impacted by a downturn late in the year, but Mullarkey says any downturn is likely to be a buying opportunity because current conditions can't keep the market down for long. That general market optimism through volatility and a correction is shared by Michele Schneider, director of trading education at MarketGauge.com, who expects heightened volatility but who sees the market likely being higher at the end of the year, with 6,000 — up about 8 percent from current levels on the Standard & Poor's 500 — being a level the market will challenge. Plus, Jonathan Smucker, portfolio manager at Marietta Investment Partners talks stocks in the Money Life Market Call.

Bob Doll, chief investment officer at Crossmark Global Investments, says that stock market valuations are extended to the point where "things need to be nearly perfect to justify those valuation levels." He is finding much better valuations internationally, noting that "Non-U.S. equity markets are cheap relative to the U.S. by an amount we have never seen before," which is why he is suggesting investors start nibbling and dollar-cost averaging into foreign markets now. Doll also reviews his annual list of 10 forecasts for the calendar year and sizes up where his forecasts stand after the mid-year point of the 2024. Doll says the economy is slowing and he expects that to show up in a market downturn before year's end. Michael Urich, chief economist at Seventh Point Analytic Consulting, discusses the latest Business Conditions Survey from the National Association for Business Economics -- released today -- which shows that a record number of respondents reported that their firms had raised prices in the last three months, but fewer respondents reported higher sales and profits, a dichotomy that suggests there might be some economic trouble ahead. Plus, Kyle Guske, analyst at New Constructs, puts a mutual fund in the Danger Zone.

Michael Green, chief strategist at Simplify Asset Management, says that the economy is showing signs of slowing in some ways, while still having some measures being strong, and a lot of it is determined by consumers where the division between the haves and have-nots are growing, and where current conditions hurt people with less money dramatically more than the wealthy. Green says people are confusing the stock market's run to record highs as strength for the economy, which he says is misplaced, but which he says has handcuffed the Federal Reserve on rate cuts because it's hard to say that moves are needed when markets are peaking. In the Talking Technicals segment, Tom Samuelson, chief investment officer at Vineyard Global Advisors, says he'll stay bullish despite expecting a 3 to 5 percent correction now and a 5 to 10 percent dip closer to the election; he's optimistic because "strength begets strength," and a strong first half of the year bodes well for gains in the second half, as does increasing breadth supporting an uptrend. Plus, Jason Akus, head of healthcare investing at abrdn — manager of the firm's four closed-end funds covering healthcare — gives his current take on the healthcare and biotech space, noting that the sectors last rallied around the vaccine makers during the pandemic but they are now showing signs of the next big rally, and Rachel Perez discusses research from Preply showing which side gigs provide the best wages and most job stability.

Peter Repetto, vice president of investment strategy at iCapital, says that while rate cuts historically are good for markets — gaining roughly 9 percent in the year after cuts start historically — they do struggle if cuts are made during times of recession or downturn. Repetto expects a soft landing and moderate downturn, which is setting up for reasonably well for "rate-cut beneficiary" businesses moving forward. Repetto notes that markets also tend to gain in the 12 months after a presidential cycle, saying they tend to gain about 15 percent on average regardless of which party wins control of the White House, which should create a good market for the market if the Federal Reserve starts cutting rates amid a mild slowdown. Ahead of the expected rate cut from the Federal Reserve that is increasingly considered likely for September, Todd Rosenbluth, head of research at VettaFi, looks to the granddaddy of actively managed bond funds for his "ETF of the Week," Mark Hamrick, senior economic analyst at BankRate.com discusses a new survey showing how Americans feel their personal finances are being influenced by the current presidential candidates, and what they expect for the future depending on who wins in November, and Chuck answers a listener's question about diversifying a portfolio and how many investments to hold.

James St. Aubin, chief investment officer at Ocean Park Asset Management, says that as long as the economy "keeps humming along" and meets high expectations for earnings growth and stable balance sheets, the current rally should keep rolling. When that trend breaks, however, the market and economy could turn quickly; St. Aubin sees "some cracks starting to form" with consumers and with some of the economic data, and while a soft landing is possible, any problems are likely to get more painful. Also on the show, Jason Chepenik of OneDigital Retirement + Wealth discusses the firm's 2024 Employee Value Perception Study, which looks at the disconnect between what employers think workers want beyond compensation, and what workers actually are looking for from their employers. Plus, Andrew Graham, founder and portfolio manager at Jackson Square Capital, gives his take on the current market in the Market Call.

Terri Spath, founder and chief investment officer at Zuma Wealth, says that the market is in the early stages of an impressive bull market, noting that the current rally is now about 20 months old and that the market has dramatic gains since hitting lows in October 2022, but she notes that the average bull market runs longer and gains more and there's still plenty of room for that. She says "We're feeling great about this market. We love it from a fundamental standpoint ... and on a technical basis because the trend continues to be up as well." While she does see the potential for a correction, she says the outlook for the rest of the year is strong. Ted Rossman, senior industry analyst at Bankrate.com discusses the site's recent study on side hustles, which found that 36% of American adults have a side hustle, with the average side hustler now making $891 per month. Plus, Chuck answers a listener's question about when to get travel insurance and when to leave home without it.

Michael Mullaney, Director of Global Markets Research at Boston Partners, says that the stock market is trading far enough above moving averages that it's due for a correction on the short term. As that pullback happens, he expects the Federal Reserve to kick in with rate cuts beginning in September, driven more by the jobs report than inflation numbers, but he notes that may not have more than a short-term stimulative effect. Mullaney says that while the broad economy may be able to put off any sort of landing until next year, the bottom quintile of consumers is already living through a recession, which is creating some of the disconnect between solid economic fundamentals but weak consumer sentimentals. Also on the show, Kyle Guske, investment analyst at New Constructs, says Targa Resources is the stock "most likely to miss earnings," which is why it's in The Danger Zone now, plus Brian Glenn, chief investment officer at Premier Path Wealth Partners discusses both ETFs and stocks in the Market Call.

Jerremy Newsome, founder of Real Life Trading, says that with the election looming after the traditional summer-fall doldrums — and having already hit his profit targets for the year — he is about to move 100 percent into cash. "I think it's too easy right now," he says. "We're too high, it's too easy, everything is going straight up ... no reason not to be all up in cash up here for me." Newsome was clear that he's selling into strength and locking in profits, because he does think the market will be going higher once there is more certainty after the election; he expects to have at least half of his money back into stocks by the end of the year. Mark Gatto, co-founder and co-chief executive officer at CION Investment Group — which runs CION Investment Corp., a business-development company — discusses the heavy interest and cash-flow into BDCs and how that is changing the space and making it important for investors and advisers to "pull back the layers to understand what they are investing in," paying particular attention to the deals and credit quality a BDC gets involved in. Plus, Christopher P. Davis of Hudson Value Partners gives his take on value investing, — which mixes in more macro factors than the traditional bottoms-up value manager — in the Money Life Market Call.

Tim Urbanowicz, head of investment strategy and research for the Innovator ETFs, says that the current bull market run has the stock market hitting new highs roughly every four days, which is fast compared even to the Internet bubble days, and while investors are nervous that things must take a turn, he points out that hitting all-time highs has never been a catalyst for a sell-off, and isn't likely to be one now. That makes it crucial for investors to manage risk and balance their fear of loss against their fear of missing out. Innovator makes products that create that balance using options strategies to define potential outcomes and to make returns more certain or that at least remove some of the market's unknowns. Todd Rosenbluth, head of research at VettaFi, uses recent political changes in England as a motivator for his pick as the "ETF of the Week," discussing the additional risks an investor takes by investing in a single-country fund. And deep-value investor Michael Campagna, senior investment analyst at Moerus Capital Management, talks in the Market Call about why this is "one of the most attractive times to find opportunities" that he has seen in the last two decades.

Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co., says the economic cycle is now in its last stages, and while there may be a blow-off top before trouble is here, he expects a recession and he will not be surprised if it occurs after the Federa;l Reserve cuts interest rates. While many observers expect cuts to help markets, Schutte says that the Fed has never been able to take an overheated economy and cool it without triggering a recession. He added that the last four recessions all occurred shortly after rate cuts. In the Market Call, Ira Rothberg, portfolio manager for the Hennessy Focus Fund, discusses buying great companies at modest discounts, with the courage to hold them for years waiting for the payoff. Plus, Chuck answers a listener's question on deciding whether pet insurance is a good idea for a new puppy.

Sam Stovall, chief market strategist for CFRA Research, says the market needs to "digest its gains," which he expects to turn into a "low teens selloff," but that will be a bull market correction and not a catastrophic event like the 2008 financial crisis. Stovall expects the Federal Reserve to make cuts starting in September, but he notes that the central bank is going to wait until it absolutely must make a move rather than making any change simply because the market is anticipating one, and he notes that could portend trouble because the Fed has historically waited too long before acting. Also on the show -- and agreeing with the idea that the market is strong but due for a selloff is Jeffrey Bierman, chief market technician at TheoTrade.com, and the founder of TheQuantGuy.com. He says the market is driven by "the 4 N’s," which involve a market that is numb to all news, neutralized against all volatility, that has normalized inflation and momentum trading and that has "negated all valuation." That has set up a market that can keep going despite an economy that is slowing. Plus, Chip Lupo discusses WalletHub's 2024 Credit Card Debt Survey, which showed that credit-card balances are on the rise and that nearly half of Americans are still paying down the credit card bills they ran up last summer, which does not bode well for how things will look for their credit when Labor Day rolls around.

David Trainer, founder and president of New Constructs, was still in a festive Fourth of July mood, so instead of going to his usual spot in "The Danger Zone," he picked a quality, classic American business as a potential buy, singling out HF Sinclair, the oil company, for "The Attractive Zone." Between consistent growth in its dividend and stock buy-backs, Trainer says HF Sinclair could have a potential yield of 10 percent or more. Mark Hamrick, senior economic analyst and Washington bureau chief at BankRate.com weighs in on Friday's jobs report and what some weakness in those numbers suggests for when the Federal Reserve will decide it's time to cut interest rates. William Vanderbloemen, founder and chief executive officer at Vanderbloemen Search Group, discusses the skills and traits that workers will want to bring to the job in a world where artificial intelligence is expected to take over a lot of tasks. In the Money Life Market Call, Rob Isbitts, co-founder and chief investment strategist at Sungarden Investment Publishing, talks about YARP, his "Yield at a Reasonable Price" strategy.

Nikolaj Schmidt, chief international economist at T. Rowe Price, says he's expecting a correction soon "but it's not going to be something too deep or too dark or too scary," noting that the economic backdrop remains strong enough that the Federal Reserve can likely finish the year with just one rate cut. Schmid discusses T. Rowe's 2024 Mid-Year Outlook, and notes that he is concerned that with foreign central banks already having cut rates, the Fed's timing is now more critical because it does not want its monetary policy to be too far out of sync with the rest of the world. John Cole Scott of Closed-End Fund Advisors compares two high-yielding offerings from Ares, showing that while both could be viable and attractive options for diversifying a portfolio into the alternative credit space, there's much more to making an investment decision than a big yield. Plus, Karen Brown, a reporter at New England Public Media and the host of "The Secrets We Keep" podcast talks about financial secret-keeping, particularly around the salaries we make and what ending the secrecy might mean for individuals and for society.

David Lubchenco, partner at Chautauqua Capital Management, says that the underperformance of foreign stocks for several years has been so extreme that relative valuations look good and international stocks are poised for a strong run whenever the market's next cycle begins. Lubchenco says that when there is a concentrated market like what investors have seen during the rise of the Magnificent Seven stocks, it portends change ahead, which makes this a good time for investors to make sure they take a diversified approach now. Todd Rosenbluth, head of research at VettaFi, equates quality with greatness so he's celebrating the July 4 holiday by picking a quality-focused fund as his ETF of the Week. In the Market Call, Roger Conrad, editor of Conrad’s Utility Investor and The REIT Sheet talks about income and dividend investing.

Xander Gray, founder and chief executive officer at XG Capital Strategies, says that a bear market is coming, with a number of potential catalysts contributing to trigger the downturn. He says that while he expects a downturn of up to 30 percent, he does not expect it to take long. Further Gray says that for investors who have not been buying now likely want to wait until next year, with the market around record highs but likely to have at least a minor blow-off before the real bear market shows up. Jeff Clark, head of defined contribution research at Vanguard talks about “How America Saves,” the company's annual look at the behaviors of more than five million retirement-plan investors, which showed that savers were setting aside money at a record pace, and that average amounts that workers are putting into savings are on the rise. Plus, Elizabeth MacBride, co-author of "The Little Book of Robo Investing: How to Make Money While You Sleep" discusses the pros and cons of using robo advice platforms as compared to human financial advisers, plus Chuck answers a listener's question comparing the returns on gold to those of the stock market and suggesting that investors should want to hold more of the metal.

Jeff Timlin, head of municipal strategies at Sage Advisory Services, says that potential problems surfacing in the California and New York municipal bond markets are telegraphing "an economic slowdown nationally," but that investors should not worry about a significant increase in defaults, and should instead find munis becoming increasingly attractive once the Federal Reserve starts cutting rates. David Trainer, president of New Constructs, puts electric-vehicle maker Nio back into The Danger Zone, noting that while the stock's price has cratered, it can't even justify its current price in the range of five bucks per share. Divya Sangameshwar discusses a ValuePenguin.com study showing that the average American household will spend roughly $1,730 this year on their pets. Plus, Nancy Tengler, chief investment officer at Laffer Tengler Investments, discusses growth at a reasonable prices in the Money Life Market Call.

D.R. Barton Jr., Director of Market Research at the Foundation for the Study of Cycles, says the longest cycles suggest that the market is topping out now, but 'near-term overbought doesn't bother me right now.' He is expecting more upside into the election and carrying into 2025 before any downturn is more dramatic than a simple buying opportunity. He says that he doesn't expect much downside risk until or unless the Standard & Poor's 500 falls below the 5,300 level; meanwhile the market is telling him that money keeps flowing in and can sustain the rally longer. John Cole Scott, president of Closed-End Fund Advisors, returns from a recent industry conference that was focused on business-development companies and he gives his takeaways from the event, including how BDCs compare to private credits, how the market is changing and how some money managers are using artificial intelligence to get better information on the market trends that should help them pick better investments or to have better timing on the trades they make and more. Plus, Julie Guntrip, head of financial wellness at Jenius Bank, explores 'The Mind-Money Connection,' a study that looks at how managing money can make you happier or more stressed out. In the Market Call, Lance Cannon, portfolio manager at Hood River Capital Management, returns to discuss growth-centered small-cap investing.