Money Life with Chuck Jaffe

Bill Adams, chief economist at Comerica Bank says 2024 will end up as "a pretty good year for the economy," with the soft nearly in place as the Fed starts to cut rates in the summer. He notes that worries about an interest-rate shock or an energy-price shock -- the big two drivers of recession -- are not exceptionally high right now and any raised concerns in those areas have enough offsets for the U.S. economy to remain the world's best while global turmoil and economic uncertainty plays out. Nick Pisano discusses a Clever Real Estate survey showing that nearly three-quarters of all Americans report having an overspending problem. David Trainer of New Constructs puts SNAP Inc. back into The Danger Zone, noting the stock probably won't be out of trouble until the stock reaches zero, and Jay Hatfield, chief executive officer at Infrastructure Capital Advisors forecasts that the Standard & Poor's 500 will hit 5,750 or higher as part of the macro outlook he uses to inform his stock picking in the Market Call.

John Kosar, chief market strategist at Asbury Research, turned positive on the market back in November and he's not ready to ring the register and close out the current rally just yet, though there are some metrics showing that "the market is about as overextended as it's been historically before you get a correction." That doesn't make him nervous or worried, but he says that's a symptom rather than a sell signal. Meanwhile, he sees a bull market running in commodities and he intends to ride that until the market corrects. In the Big Interview, Steve Scruggs, manager of the FPA Queens Road funds, says that he would expect small caps to be helped along by interest rate cuts so long as the consumer does not run out of steam when it comes to spending. He favors a mix of long-term compounders and special situations, but notes that quality is expensive right now and the best opportunities are among some stocks that have been beaten down or punished due to operating anomalies that have the chance to revert to the mean and tick up from here. Harin de Silva, manager of the Allspring Global Dividend Opportunity fund says in The NAVigator segment that the US has remained one of the best places to be in terms of yields generated relative to the risks being taken. While he favors a global allocation, he noted that the fund has a surprising tilt toward the United States, helped along by the low volatility levels due to the strength of the U.S. economy. De Silva says that the big surprise in recent markets has been how the bad news from Ukraine and Israel -- along with troubles at both the Suez and Panama Canal -- hasn't created uncertainty in the market and convinced investors to stop taking on risk. Plus, Loren Hsaio discusses the latest information from Northwestern Mutual's 2024 Planning & Progress Study, which shows that Americans are coping with record levels of financial insecurity right now.

Todd Rosenbluth, head of research at VettaFi, says that American investors who have some $6 trillion in cash are in danger of missing out as the Federal Reserve begins to cut interest rates in coming months, meaning they should focus on what they are doing with their cash-like investments. That's why he made Fidelity Limited Term Bond his "ETF of the Week," noting that unexciting -- but in line with expectations -- is something investors should be striving for right now, so that they are protected when the rate picture changes. In The big Interview, Ben McMillan, chief investment officer at IDX Advisors, talks about how flexible bond-fund investors should be preparing for rate cuts and focusing in on duration plays -- where they are extending maturities right now to lock in current high rates -- while recognizing that credit quality will be a big factor in what happens when the cuts start happening. Plus, Miles Tullo discusses recent research from J.D. Power on how convenience is driving Americans to digital wallets and how satisfied consumers are making the change from greenbacks to digital use of money. Plus, Sandy Villere, co-manager of Villere Balanced and Villere Equity funds, talks stocks in the Market Call.

Brian Nick, chief investment strategist at the Macro Institute, says that people should not expect the Federal Reserve to cut interest rates in hopes of rescuing the economy or keeping the market rally rolling. Instead, he says the Fed tends to cut rates when things go wrong, which he expects to happen by the middle of the year, when bad economic news starts piling up. Nick is not expecting the proverbial soft landing, noting that macro indicators like the inverted yield curve and more are still working through the economic cycle and are making it that the full force of a slowdown will be felt in 2025, and that "the next seven to eight quarters will be tough especially compared to the five or six that have come before it." In "The Financial Crunch from Money Pickle," Dave Rowan, president of Rowan Financial, discusses how investors can integrate real estate and property investments into a portfolio and how "passive income" does not fully describe the role those property buyers play in their holdings. In the Market Call, Jeff Auxier of the Auxier Focus Fund, talks about buying businesses rather than stocks, focusing on analyzing what a company does to determine when the stock is presenting a real long-term value and opportunity.

David Keller, chief market strategist at StockCharts.com and the president at Sierra Alpha Research, says the market's first quarter was much stronger than he expected, avoiding a low that he was expecting. The current low-volatility incline the market is on reminded Keller of 2021, a time when the market was recovering from Covid and kept driving higher despite concerns. Keller says that he is watching for danger signs like a spike in volatility or deterioration in breadth indicators, but lacking those troubles he says the market is giving a "long and strong" impression that he is inclined to follow until those trouble spots become visible. In The Big Interview, Jonathan Treussard, founder of Treussard Capital Management, says that the Federal Reserve has two choices right now, one of which is declaring victory over inflation despite not having achieved its target rate, or it can push harder to get the job done, which might knock the economy off of its soft-landing trajectory. Like Keller, Treussard notes the market's low volatility as a positive, though he worries that it is making investors take extra chances that could turn into trouble when the market turns. Plus, Tom Martin, senior portfolio manager at Globalt Investments, brings his earnings-centric investment style to the Money Life Market Call.

Paul Gruenwald, chief economist at S&P Global Ratings, says that he doesn't see the economy going into a recession, allowing the Federal Reserve to cut rates "at a leisurely pace" and to get through inflation-reduction with a soft landing. Gruenwald recently raised his growth projection for the economy and he says the strong economy is letting the Fed take its time in cutting rates, but that current levels of 5.25 percent are too high. He doesn't expect the central bank to cut rates below 3 percent, which he expects it to reach with a few rate cuts this year starting in June and four to five cuts next year. Larry Tentarelli, founder/chief technical strategist, Blue Chip Daily Trend Report says the market's upward trend has room to run. As a technician, Tentarelli says the most bullish signal is a market at new highs because there is no overhead resistance, and while he expects some small, normal pullbacks along the way, he expects the long-term move to be higher. Plus, David Trainer, president at New Constructs, revisits a meme stock in The Danger Zone and author Anne Lester discusses her new book, "Your Best Financial Life: Save Smart Now for the Future You Want."

Kim Blanton of the Boston College Center for Retirement Research – where she writes the Squared Away blog -- says that Americans wind up falling into some classic psychological traps when it comes time to claim Social security benefits, and often take the money before they need it based on flawed thinking, reducing their retirement benefits for life. She highlights how savers -- even when confronted with numbers showing that their lifetime benefits will be significantly better with a late start, and assuming they have a long life -- instead jump at the chance to get a smaller amount of money so long as they can start receiving it now. Nicholas Marshi, editor at the BDC Reporter, talks about the struggles business development companies had at the end of 2023 and how they have been performing in the new year, with an outlook for what's ahead as the interest rate cycle starts to change. Plus Todd Rosenbluth, head of research at VettaFi makes BlackRock U.S. Equity Factor Rotation his "ETF of the Week," and Ken Applegate, portfolio manager for the Wasatch International Growth and International Select funds talks in the Market Call segment about the promise of foreign small-cap stocks now, after long periods of underperformance for both small-company and overseas investments.

Joe Kalish, chief macro strategist at Ned Davis Research, says that the big picture still argues for overweigting stocks relative to bonds and cash so long as the Federal Reserve follows through on making rate cuts and the economy avoids recession. While economic conditions make it look like a soft landing is in place now, Kalish is concerned about the outlook for 2025, noting that his concern level rises the longer the Fed holds off on rate cuts. Kalish says that the central bank can cut rates while still having restrictive policies, and that if it keeps rates tight for too long, cuts would come too late to avoid much rougher times. Also on the show: Bloomberg reporter Saleha Mohsin talks about her new book, "Paper Soldiers: How the Weaponization of the Dollar Changed the World Order" and how long the U.S. can maintain its position as the world's financial superpower; Brent Thurman, chief executive officer at Money Pickle discusses the latest developments in the fiduciary rule governing the behavior of financial advisers and whether it makes a difference to consumers in their day-to-day workings with brokers and financial planners; plus, with the Major League Baseball season just one day away, tax attorney David DeJong of Stein Sperling discusses what you might want to toss back and forth with your tax adviser if you are lucky enough to catch a milestone baseball when you go to the ballpark this year.

Jeffrey Cleveland, chief economist at Payden & Rygel, says that current conditions -- with inflation falling significantly year-over-year and no attendant hike in unemployment and no recession -- are the proverbial soft landing, and he believes these conditions can persist at least through the rest of the year. The soft landing as the dominant macro story will give the Federal Reserve leeway to cut interest rates less than expected, Cleveland says, and he expects central bankers to make cuts cautiously and reluctantly. By comparison, in the Talking Technicals segment, Chris Vermeulen, chief market strategist at The Technical Traders says that he thinks the stock market has one last leg up before the indexes -- which are showing signs of topping out -- take a turn for the worse, triggering a correction that he expects to start before election day in November. Further, Vermeulen says the rough market conditions will stick around, rather than representing a buying opportunity on the rebound. Plus, Larry McDonald, creator of The Bear Traps Report, is back to discuss his new book, "How to Listen When Markets Speak: Risks, Myths, and Investment Opportunities in a Radically Reshaped Economy."

Steve Sosnick, chief market strategist at Interactive Brokers, says "This is one of the most momentum-driven markets I can recall ... where the winning stocks in one month continue to be the winning stocks the next month and then continue to win again the following month." Yet he believes in being fearful at times when others are greedy, because there are enough warning signs to make investors justifiably concerned that the rally can't last forever. Sosnick says now that the strong economy has made it that the Federal Reserve doesn't need to make rate cuts now, though he still expects them later this year. Also on the show, Kyle Guske, investment analyst at New Constructs, says that recently revealed accounting concerns may be the catalyst that knocks data-center REIT Equinix from its lofty perch, so he put the stock back in The Danger Zone, but Samuel Adams, chief executive at Vert Asset Management and manager of the Vert Global Sustainable Real Estate fund, says in the Market Call that data centers -- and particularly Equinix -- are among his favorite buys right now, with his long-term buy-and-hold strategy allowing him to ride out what he expects will be short-term issues due to the reported accounting issues.