Money Life with Chuck Jaffe

Zed Osmani, portfolio manager for the Martin Currie Global Portfolio Trust, says the domestic and global economies could avoid a recession this year, although he sees a 65 to 70 percent chance of a sharp slowdown instead. Osmani says the key word for the year is 'pivot,' the centerpiece of a 'healthy bull-bear debate' about whether central banks will pivot in 2023 and how fast they will pivot; the result of that back-and-forth will be heightened volatility and a tough outcome to predict. Ted Rossman, senior industry analyst at Bankrate.com, discusses the recent news that America's cumulative credit card debt had reached an all-time high, Hailey Neff discusses a recent survey from Todayshomeowner.com showing that one in 20 American homes carries a million-dollar pricetag but asking whether one in 20 Americans can afford that much, and Kevin Kelly of Kelly ETFs talks about thematic investing in the Money Life Market Call.

Michael Kahn, senior market analyst at Lowry Research Corp., says that the technical indicators that the market peaked several weeks, 'screaming overbought, screaming this is not the time to be buying if you are not going to be holding forever,' which has the market in a short-term downturn even as the long-term outlook is positive. He notes that in times like these with conflicting signals, investors can nibble and be selective buyers, but they want to stick to the best names with positive fundamentals that can be held in line with the longer-term positive forecast. Jon Maier, chief investment officer at Global X discusses thematic investing and which themes or specialties stand out under current market conditions and which to avoid. Maier says that capital expenditure from corporations remain strong and investors should ride with that idea, particularly at a time when it appears that consumers are ready to cut spending, fatigued by inflation. And in the Market Call, David Kalis, portfolio manager at The Future Fund discusses his search for growth-company stocks that 'can change the world or are in the process of changing the world.'

Kathy Bostjancic, chief economist at Nationwide, says in The Big Interview that the economic data showing that both the economy and inflation are running hotter than expected is going to force the Federal reserve to make some moves that are more likely to trigger not just a recession but a harder landing for the economy. Bostjancic says the Fed has plenty of reason to keep tightening and the markets are starting to price in a bigger rate hike for the March meeting; if February economic data shows continued economic heat, the central bank's response could be the catalyst for a more protracted downturn. But not all economists agree with Bostjancic -- or with each other for that matter -- as shown when Ken Simonson, chief economist for Associated General Contractors of America discusses the latest Outlook survey from the National Association for Business Economics, released today and showing that there is no strong consensus for how the current situation will play out. Plus, Kyle Guske of New Constructs puts DoorDash in the Danger Zone, noting that it's a zombie stock already well down from 2021 peaks but likely to deliver a second helping of losses as it sinks to a very low fair value. And Stan Haithcock, 'Stan the Annuity Man' joins Chuck to answer a question about a listener's pending pension-versus-annuity decision.

Jim Welsh, portfolio manager at Smart Portfolios and editor of the MacroTides newsletter, says that the next downturn is being set up by recent moves that have bolstered confidence and lulled investors into feeling good. When the market turns, closer to mid-year, Welsh thinks the disappointment of those investors will make the market more vulnerable to 'a significant decline,' which he believes will take the Standard and Poor's 500 down to the 3,500 level, with a hard-landing economy putting 3,200 within the realm of possibilities. In The Big Interview, Steve Rick, chief economist at CUNA Mutual Group, foresees a 'growth recession,' likely to start in the second half of 2023 as consumers start to tighten up their spending. Rick says a recession, if it happens, will be mild. In The NAVigator segment, Steven Perry, vice president at XA Investments, discusses the benefits and risks associated with leverage in closed-end funds during a rising-rate environment, plus Chuck answers a listener's question about how he set up -- and changed over time -- the allowance practices used with his daughters.

Legendary mutual fund manager Bill Nygren of the Oakmark Fund, says that any recession would be an unusual one because there has never been such a weak economic environment with such strong labor and other key conditions. That makes it that auto stocks, consumer lending companies and other businesses that typically suffer in a recession could actually perform well. Nygren emphasizes that despite changing conditions, buying high-quality, cash-generating businesses at reasonable prices continues to work, noting that 'there are a lot of stocks today at single-digit P/E multiples,' and that investors who stock up on those names will look back in five years happy that they purchased the companies despite current chaos. Also on the show, Tom Lydon of VettaFi makes a young, unique fund that could diversify any portfolio his 'ETF of the Week,' and Mike Winter of Leatherback Asset Management and the Leatherback Long/Short Alternative Yield ETF makes his debut in the Market Call talking a mix of buys and shorts.

Brad Lamensdorf, strategist at The Lamensdorf Market Timing Report and chief executive at Active Alts, says the market is 'very, very extended' and is poised for a 20 percent correction that he expects to hit in the second quarter, driving the Standard and Poor's 500 below 3,500 before any real recovery can begin. Lamensdorf says the decline he expects will not be the result of a recession, because he believes the economy may be able to sidestep that kind of growth slowdown but stocks can't, owing to a fair value estimate that he pegs at 3,000 on the index. George Milling-Stanley, chief gold strategist at State Street Global Advisors, looks at the same uncertainties and says they have moved gold to 'right where it should be,' positioned for a good year as the market sorts out everything from inflation and interest rates to geopolitical concerns in China and the war in Ukraine. Plus, Laura Adams discusses a Finder survey showing that more than half of American parents aren't paying their kids an allowance, and how the money adults save now will likely cost the children later due to missed educational opportunities.

Lisa Shalett, chief investment officer for wealth management at Morgan Stanley says 'Investors may be relying too much on recent trends to extrapolate corporate earnings resilience' at a time when corporate earnings are not impressive compared to years past. Meanwhile, slowing economic growth means 'There's still a lot of room for downside in company earnings estimates if we just revert to the mean, forget about hard landing or soft landing." While Shalett thinks a recession is coming, nearly 70 percent of Americans believe it's already here, according to a recent survey; research analyst Jaime Dunaway-Seale of Clever Real Estate discusses the disconnect between economic numbers and consumer expectations. And in the Market Call, portfolio manager Eric McNew of Summit Global Investments discusses managing risk in current market conditions.

Brian Jacobsen, senior investment strategist at Allspring Global Investments, says that while the economic picture remains muddled, there has been an earnings recession -- successive quarters of decline -- and there is now potential for recovery. He says in The Big Interview that the Federal Reserve will not be able to put off a recession indefinitely, but that how investors feel about that economic slowdown can depend mostly on what level the decline starts from and gets to, and the Fed can mitigate a lot of the pain if it manages interest rates properly. feel different based on how far activity falls. Matt Fox, president of Ithaca Wealth Management, says that the technical indicators are all flashing go signs and 2023 is setting up strong with the market continuing to make higher lows and higher highs, with more and more securities participating in that rising trend. Fox says that if the market can stay above 4,300 on the Standard and Poor's 500, it will soon be testing levels as high as 4,500. In The NAVigator segment, Will Rhind of GraniteShares says that the peak in inflation has created a more favorable outlook for business-development companies and closed-end funds. Plus, Frank Bonanno, managing director at StoneCastle Cash Management talks about how higher interest rates have made cash a viable, investable asset class again and how the ultra wealthy might better manage and protect cash in insured bank accounts.

Joe Ferrara, investment strategist at Gateway Investment Advisers, says that a recent study done by his firm shows that many recent drivers of short-term market swings won't matter over time, because 'long-term returns after years like we had last year in 2022 are attractive but volatile,' which is precisely what he expects for the remainder of this year. Moreover, Ferrara notes that history indicates that -- if history holds true -- the market is likely to show a good five-year stretch after the troubled year, although that period will be rocky and is likely to include one down year too. Also on the show, Tom Lydon, vice chairman at VettaFi, goes back to the Vanguard Group for the second week in a row -- a rare move for him with any fund family -- to find his ETF of the Week, and Martin Leclerc, chief investment officer at Barrack Yard Advisors, says in the Market Call that he believes the market and economy have reached 'a generational pivot point' caused by the current form of capitalism 'not working for enough people,' and discusses stocks that can thrive through a rocky transitional period.

Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, says that the market has reached a time when the better things are in the present, the gloomier they set up for the future. He says that rather than a soft or hard landing for the economy, we could be facing 'no landing,' which further pushes back difficult times because 'the recession has not been canceled, it has just been delayed. I would argue that we are delaying the inevitable and ultimately the longer we delay it the worse it is going to be.' In the Market Call, James Abate, chief investment officer for Centre Asset Management and portfolio manager for the Centre Funds talks infrastructure investing. Plus, the latest installment of the Weird Financial News, featuring the 6-year-old who placed massive food orders from GrubHub when he was supposed to be playing on his father's phone.