Money Life with Chuck Jaffe

Jeff Rosenkranz, fixed income portfolio manager at Shelton Capital Management, says that if the Federal Reserve waits too long to cut rates or if systemic problems resurface -- including potential troubles with bank safety -- the economy could be due for more trouble than most observers expect. Rosenkranz expects to see a significant increase in credit troubles and defaults, noting that the classic default cycle that accompanies rate hikes hasn't really occurred yet, but that it's unlikely to be avoided completely. One area that has struggled with the rate cycle has been municipal bond funds, and Jonathan Mondillo, head of North American fixed income for abrdn, says that has pushed muni closed-end funds to record discount levels, but that has created opportunities for attractive income levels and heightened total return for investors willing to swim against the tide. In the "Talking Technicals" segment, Alex Coffey, senior trading strategist at Charles Schwab, says that with the Standard & Poor's 500 on the verge of the 5,000 level, the market has gotten beyond levels of resistance which creates significant opportunity for the market to run right up to the point where it runs out of steam, warning that these kind of rallies "typically don't end well." Plus, author Malissa Clark discusses finding the right work-life balance and her new book, "Never Not Working: Why the Always-On Culture Is Bad for Business--and How to Fix It."

Kathy Boyle, president of Chapin Hill Advisors, is worried that with 'all of Wall Street being bullish again," overblown earnings expectations, strong employment and the more getting the Federal Reserve to where it will wait longer before cutting rates, the stock market has gotten a bit overblown. As a result, she thinks there's a good chance of a short-term correction, potentially down to the 4,400 level on the Standard & Poor's 500, though she does think there's a good chance the market comes through that to finish the year on a positive note. Rick Gable, portfolio manager for the MFS Global Real Estate fund, takes stock in the real estate market, noting that while the entire business has made a lot of negative news, the sour stories mostly are impacting office space and the rest of the market is full of opportunities. Plus, Todd Rosenbluth, head of research at VettaFi, looks at a young fund with a great three-year track record that can be an actively managed addition to the passive portions of a portfolio, and Chuck answers a listener's question about the fund offering filed Wednesday by hedge-fund manager Bill Ackman.

Today, Money Life debuts its latest feature, The Financial Crunch with Money Pickle, a fin-tech company that is changing the financial world by making affordable and convenient financial coaching available to investors. Brent Thurman, Money Pickle's chief executive, discusses finding a financial adviser and how investors have it so much better now that technology can make the process smooth and easy. Kelley Wright, editor at Investment Quality Trends, returns to the show for the first time since 2017, and discusses his take on how to pick value stocks in the Market Call. Plus, Ken Costa, author of "The 100 Trillion Dollar Wealth Transfer: How the Handover from Boomers to Gen Z Will Revolutionize Capitalism," and Chuck discusses his Super Bowl Ad/IPO indicator, which suggests that the real losers of this weekend's big game will be investors in young companies advertising during the telecast.

Jim Thorne, economist/chief market strategist at Wellington-Altus Private Wealth, says that "The Fed is the Fed of the world," and that how central bankers act in the United States act will determine the economic prospects of the rest of the world, and he worries that as the Federal Reserve tightens, it could over-tighten and create economic issues. He expects a growth shock, but says the U.S. will get through it and remain the best market to invest in around the globe. Michele Schneider, chief strategist at MarketGauge.com, says that the "inside sectors of the U.S. economy" -- small caps, retail and transportation -- will be the ones that tell the economic story moving forward; she says those sectors are still adjusting, to the end of zero-interest rate policy but are showing signs that there should be plenty of opportunity there for the rest of the year. Also, entrepreneur Madeline Pendleton discusses her new book, "I Survived Capitalism and All I Got Was This Lousy T-Shirt: Everything I Wish I Never Had to Learn About Money."

Pedro Palandrani, head of research at Global X, says that the continued evolution of the electric vehicle market will make it so that lithium and copper companies are the next equivalent of the Big Oil stocks, but he worries that the industries are among the most sensitive globally to geopolitical risk, which he says investors should factor into their allocation decisions. In honor of the upcoming Valentine's Day holiday, David Trainer, founder and president at New Constructs foregoes the Danger Zone in favor of talking about an attractive stock this week, and he singles out Photronics as a company which despite good recent numbers has a long way to go. Plus Dan Skubiz, chief investment officer and senior portfolio manager at ZCM, makes his debut in the Market Call talking about investing in small=-cap stocks at a time when a few mega-cap names have been dominating the market.

Jim Welsh, author of "Macro Tides" and the "Weekly Technical Review" newsletters says that if the market can rally past recent highes -- with the Standard & Poor's 500 topping 4931 -- it will finish the market's recent rally and leave stocks vulnerable to a small correction over the next few months. That said, Welsh believes in a 17-year cycle that his charts show dates back nearly 100 years, and that cycle is cooking up a coming secular bear market that ultimately could last for a decade and crater the market in the process. Susan Fahy discusses the latest "CreditGauge" measures from VantageScore, which show that the consumer is showing signs of financial stress, but the action hasn't been as bad in most areas as the headlines might suggest. Ian Merrill of SCG Asset Management and The Alternative Strategies Income Fund talks about how money managers can add derivatives to a portfolio in ways that mitigate risks but goose returns over the long haul, and Vince Lorusso, president/portfolio manager of Clough Capital, talks valuation investing in the Market Call.

Todd Rosenbluth, head of research at VettaFi, says investors should be looking at an equal-weighted approach to the market -- allowing all winners to have a chance to succeed -- despite the strong 2023 put up by the Standard & Poor's 500, a market-cap weighted index whose results were dominated by the so-called Magnificent Seven stocks. Rosenbluth made the Invesco S&P 500 Equal-Weight Technology ETF his ETF of the Week, noting that while the tech sector is a big part of most asset allocations, most of the money has been going into the few names rather than the broad group of stocks. Also on the show, Ted Rossman on the latest Bankrate.com study on financial infidelity, which showed that 40 percent of people in live-in romantic relationships are keeping financial secrets from their spouse or partner. Long-time financial journalist and money coach Lynette Khalfani-Cox returns to the show to discuss financial literacy efforts, student loan repayments, money media and more, and Rob Isbitts brings the methodology that's behind his new site -- ETFYourself.com -- to the Market Call.

Mark Hebner, chief executive officer at Index Fund Advisors, says that the dominant action of the so-called Magnificent Seven stocks is nothing new, and that the market has long shown a propensity for companies to have oversized performance as their shares moved into the top 10 of an index, only to then regress toward the mean. It's not just why he thinks the Magnificent Seven will cool off in the not-too-distant future, but it reinforces investors using index funds to ride out the market rather than trying to be stock-pickers and falling prey to the market moving against them. Matt Brannon, data analyst with Clever Real Estate, discusses the site's 2024 State of Retirement Finances report, which found that 40 percent of retirees worry about living their savings and nearly 20 percent more say they already have. Plus, Chuck answers a listener's question about selecting bond funds, and author Ernest Scheyder discusses his new book, "The War Below: Lithium, Copper, and the Global Battle to Power Our Lives."

Michael Kelly, global head of multi-asset at PineBridge Investments, says that the Federal Reserve seems to have pulled off the rare soft landing, and that portends good things ahead because previous soft landings -- in 1964, 1984 and 1994 -- the markets mostly rewarded investors who invested "as if it was late cycle," where growth funds tend to lead the way. Kelly does think the market has gotten a bit ahead of itself, but still thinks the year should be positive; he also notes that investors will want to add to the fixed income side of their portfolios, and he currently likes intermediate-term investments given the shifts ahead in the yield curve. Mark Hamrick, senior economic analyst at BankRate.com discusses the site's lates Emergency Savings Report, which shows that only 44 percent of Americans say they could afford to pay for a $1,000 emergency expense, plus we introduce a new sponsor to the show as veteran money manager Rob Isbitts talks about his latest venture, ETFYourself.com and, in the Market Call, Michael Lowenberg, portfolio manager of the Modern Capital Tactical Income Fund, talks stocks.

Sheraz Mian, director of research at Zacks Investment Research -- which focuses on earnings results for much of its forecasting -- says that with about one quarter of companies having now reported earnings results for 2023, the numbers look like "more of the same, more of the good stuff." He doesn't expect growth to be impressive this year, but there's also not much negative guidance or gloomy outlooks from companies, and he expects that mixed but largely benign environment to last through the year. Meanwhile, Hamish Preston, director of U.S. equity indices for S&P Dow Jones Indices, talks about the market's recent record highs and what they portend for the year ahead, noting that In years when the S&P 500 hits a new peak in January, gains tend to be higher than normal for the year, an average gain of roughly 10.5 percent compared to years when the market fails to reach record levels until later. Plus, David Trainer of New Constructs puts a large-cap fund that gets a four-star rating from Morningstar into the Danger Zone for holding too many dangerous stocks, and Lynette Khalfani-Cox discusses her new book, "Bounce Back: The Ultimate Guide to Financial Resilience."