Money Life with Chuck Jaffe

Alan McKnight, chief investment officer at Regions Asset Management, sees storm clouds on the horizon for the market and the economy, but his outlook remains benign, suggesting that a well-diversified portfolio will withstand heightened volatility for the remainder over the year. He says we have experienced a muted, rolling downturn and doesn't see a full-blown recession happening. By comparison, Avi Gilburt, founder of the Elliott Wave Trader, entered the year calling for the market to reach record highs no later than the second quarter — which it has — but then to turn into the start of a full-blown bear market that will last years and bring the Standard & Poor's 500 down by well over 50 percent. Gilburt says that the market remains on track for that. In the middle of that kind of disagreement, it's hard for investors to know what to do, and Andy Reed, head of investor behavior research at Vanguard, discusses research into certain biases that are leading most investors to make mistakes that result in diminished gains and missed opportunities.

Joe Boyle, Fixed Income Investment Strategist for the Hartford Funds, says that the re-set in fixed-income after rates popped up in 2022 and 2023 have made it unimportant to bond investors whether the Federal Reserve cuts rates any time soon, because the yields should remain strong. That said, Boyle said he was looking further out the yield curve — especially is it looks likely to normalize after two years of being inverted — because adding longer, high-quality bonds will pay off when the rate environment changes. Kyle Guske, investment analyst at New Constructs, put EventBrite — a stock that had been in the Danger Zone right after it went public in 2018 — back into the Danger Zone now, Jaime Dunaway-Seale discusses a Clever Real Estate survey showing that nearly half of all recent homebuyers say they feel over their head financially having made the purchase, and Martin Leclerc, chief investment officer and portfolio manager at Barrack Yard Advisors, talks stocks in the Market Call.

Jeffrey Hirsch, editor-in-chief of the Stock Traders' Almanac — chief investment officer at Hirsch Holdings — says that calendar effects and seasonal sell signals may be indicating that it's time to "sell in May and go away," but he says long-term investors have plenty of reason to remain bullish enough thanks to election effects and more that investors "have no need to go away," so long as they can put up with the market's increased chop over the summer. Hirsch noted that the election effects suggest that the market will benefit from having a second-term president — regardless of who wins in November — but that there tends to be weakness in the first two years of any lame-duck president, which means he may take a more cautionary stance once the election passes in November. John Cole Scott, president of Closed-End Fund Advisors — chairman of the Active Investment Company Alliance — talks about the good and bad in recent industry trends that have fund sponsors taking steps to keep a lid on discounts and to reduce a fund's potential attractiveness to activist investors, as well as the trend towards managed payouts and how investors should size up distributions that might be connected more to marketing materials than to what a fund actually can deliver. In the Market Call, Tom Plumb, president and chief investment officer at the Plumb Funds, covers growth stocks with disruptive technologies and business plans.

Simeon Hyman, global investment strategist at ProShares, is doubling down on a forecast he made before 2024 started, in which he said the outcome of the year for the market and economy was not "all about the Fed." He says the Federal Reserve's grip on the economy has eased, largely because the long end of the yield curve is free from the tight grip of the Federal Reserve. With the long end of the yield curve driving equity prices, Hyman thinks the market can find more room to run, and that's what he is expecting, although he does think there is an economic downturn with a soft landing in our near future. Hyman notes that valuations remain difficult, though he explains how using equal-weighted funds should pay off a little better moving forward. Todd Rosenbluth, head of research at VettaFi, turns towards an all-purpose commodity fund for his "ETF of the Week," Cassandra Happe, an analyst at WalletHub, discusses how consumers expect to use credit cards to pay for their summer travel and how they can help themselves with the right credit-card deal. And in the Market Call, Brian Frank of the Frank Value Fund talks about absolute value investing at a point when the market is near record highs.

Jose Torres, senior economist at Interactive Brokers, expects consumers to keep spending and to help power the economy through at least the end of the year without a recession, but he notes that if the Federal Reserve ultimately decides that it's going to 2 percent inflation or bust, there will be a bust for the consumer and the economy, with the current party ending in a potentially protracted period of struggles. Jack Nelson, portfolio manager of the global emerging markets sustainability strategy at Stewart Investors, says that while many investors are avoiding China, it's important to not be so fearful as to miss out on the opportunity that a number of companies there represent, due to valuations that are more compelling in much hotter markets like India. Sarah Foster, analyst at Bankrate.com discusses the site's latest survey showling that while nearly nine of 10 Americans know what financial success looks like in their life, only one in four think they will achieve it. Plus, Chuck answers a listener's question about whether it's time to convert traditional long-term retirement savings into Roth IRA accounts.

Ryan Detrick, chief market strategist at the Carson Group, notes that the economic news and growth remain so strong that "the odds of recession are quite low."Detrick notes that 10 of 11 sectors in the Standard & Poor's 500 are higher year-to-date, which is why his firm is overweight in equities generally, and has been adding to financials and industrials in particular. Detrick says there are several disconnects between hard and soft data -- soft data shows low consumer confidence but hard data shows strong retail sales -- and he is trusting the hard data to see the economy continue to broaden out for the remainder of the year. Also on the show, Chuck explains how the new securities settlement standard of "T+1" will affect individual investors, and while he explains that the changes are minimal and won't be noticed by a lot of everyday investors, he also lays out that virtually every stock, bond and ETF trade moving forward will be impacted by the new rules. Plus, in the Market Call, long-time CNBC contributor Ron Insana, the chief executive officer at iFi AI, showcases his platform's technology, which brings together artificial intelligence and stock market data to decide which securities are likely to go on big runs in the next week, month and year.

Jeff Bishop, chief executive officer at RagingBull, says that the market is showing signs of topping out, though he thinks that the building downturn now will likely be short and not too steep before a rally again chases record highs. Bishop notes that "all of the bears have been destroyed," so there are few investors betting against the market, which is typically a sign that trouble is ahead. Bishop notes that those bearish investors were tired of their losses, and that betting against the market now would be risky, but he says there is more downside risk than potential upside right now. Sam Millette, senior investment strategist at Commonwealth Financial Network, says that as the market adjusts to the Federal Reserve delaying rate cuts as long as possible, it will set up the market for a better second half of the year. Stephen Minar, head of closed-end funds at BlackRock, discusses how discounts drive money flows into closed-end funds, but they also attract activist investors whose actions may be harmful to others. BlackRock has created some initiatives to fight back, reducing discounts but hoping to increase a closed-end fund's consistency. And in the Market Call, David Brady of Brady Investment Counsel returns, and is the only guest who tackles the ticker list by simply addressing the first five names on it.

Rusty Vanneman, chief investment strategist at Orion Wealth Management, says that while the economy has been stronger than investors expected entering the year — and isn't likely to have a sudden reversal — investors need to heed the warning signs and balance optimism with caution, remaining properly diversified. He notes that some international markets are particularly well-positioned right now in terms of valuations compared to domestic equities, particularly in hot industries like artificial intelligence, where the bargains are more with global stocks. Vanneman also likes real assets and discusses the importance of adding alternatives to generate both returns and stability. Todd Rosenbluth, head of research at VettaFi, talks about adding international bonds to the portfolio mix with his pick for the ETF of the Week, Chuck answers a listener's question about properly selecting bonds and bond funds for a retirement portfolio, and Les Rubin of Main Street Economics discusses his new book, "Why You Should Give A Damn About Economics: The US Debt and Your Future."

Gina Sanchez, chief market strategist at Lido Advisors, says that the stock market is changing its mind so fast that every month investors have a new focus. She notes that the market has gone from favoring value to growth to defensive growth and kept rotating to where it is now back to growth, but she says that can't continue for long because the current level of "productive inflation" will stop working, leading to a slower economy in the second half of the year. While she doesn't expect a hard landing — and in fact expects a long, slow period of sluggishness — it will create volatility and conditions that favor quality, profitability and cash flow. Jennifer White discusses the latest J.D. Power research on consumer financial health, which showed modest improvement despite headline issues over inflation, although there is some concern that it's still a small group of consumers claiming improving circumstances. Plus, Kevin Walkush, portfolio manager at Jensen Investment Management, talks about quality growth stocks — with an eye towards the artificial intelligence companies that deserve the "quality" label — in the Market Call, and Chuck tells the story of Bitcoin Pizza Day, and what happened to the guys who in 2010 exchanged two pizzas valued at roughly $25 for a little more than $40 in bitcoin, which today is worth hundreds of millions of dollars.

Dave Rosenberg, president of Rosenberg Research, says that anyone believing a no-landing scenario believes in pixie dust, and that investors are mistaking record highs on the stock market for a booming economy. He sees the economy as cooling off, and warning signs building, and notes that the Federal Reserve is too focused on lagging indicators, but the trouble they have been guarding against is still coming. Meanwhile, Rosenberg says investors aren't getting paid to take on equity risk, so he is happy in being in money markets and bonds while he waits for conditions to change. Also on the show, Stephen Dover, chief market strategist at Franklin Templeton — head of the Franklin Templeton Institute — digs into his research on just how much election results actually matter for the market, and Will Rhind, chief executive officer at GraniteShares, talks in the Market Call about investing in disruptive stocks.