Money Life with Chuck Jaffe

Michael Kelly, portfolio manager and global head of multi-asset at PineBridge Investments, says that investors should expect volatile choppy markets -- moving sideways at best -- while the economy pivots away from the rising inflation and interest rate trend, but that investors shouldn't expect much good news until at least May of 2023. Kelly says that he expects China to pivot on some of its policies early in 2023, which will make its economy and stock market the only market with higher cash flows and an easier central bank come springtime, encouraging investment there while the rest of the world markets are volatile and choppy. He also suggests that investors will want to take the reasonable yields they can get on bonds while waiting for the equity markets to improve. Also on the show today, Tom Lydon, vice chairman at VettaFi goes international with a trend-following pick for his ETF of the Week, Mark Hamrick, senior economic analyst at Bankrate.com discusses all of the action around jobs and the labor market this week and what it portends for the news cycle and the stock market, and Chuck answers a listener's question about tax-loss harvesting, which he notes might be as popular with investors this year as holiday shopping is with consumers.

Alan McKnight, chief investment officer at Regions Asset Management, says that fallout from the current global supply-chain crisis will be a worldwide shift to there is going to "near-sourcing," the ability to have suppliers closer to home, which will lead to Corporate American spending money to make it happen, which should benefit industrial companies and energy stocks moving forward. Those sectors plus health care should be leading as the market and economy head into a volatile 2023 that McKnight says may not include a recession if the Federal Reserve gets its moves right. Also on the show, Bankrate.com analyst Sarah Foster returns to the show to discuss how inflation has been hitting some of the biggest holiday expense items hard and how higher costs could be the Grinch to steal Christmas traditions this year, plus we revisit a recent chat all about the financial and banking sectors with David Ellison, portfolio manager for the Hennessy Large-Cap Financial and Hennessy Small-Cap Financial funds.

Glory Liu, author of "Adam Smith's America: How a Scottish Philosopher Became an Icon of American Capitalism," says that people evoking the famous economist's memory to support their thinking are typically wrong about his teachings, noting that the patron saint of capitalism had a lot of ideas that have mostly been forgotten by leaders and politicians trying to appropriate his fame and use it as an endorsement. She suggests it might be a warning sign as to what is being promoted using Smith as a tool. Also on the show, Patrick Fisher, founder of Creation Investments Capital Management, discusses active ESG investments in banking, micro-loans and fintech in underserved parts of the world, plus retirement planner Jeremy Keil of Keil Financial Partners talks about the impact that sustained inflation is having on senior clients and how people can respond and plan to get through price hikes.

Eric Boughton, portfolio manager/chief analyst at Matisse Capital -- which runs mutual funds that invest in closed-end funds -- says that investors can find attractive discounts in a few sectors right now, notably in municipal bonds, high-yield and bank-loan funds are worth investigating in fixed income, with foreign stocks and MLP funds (investing in master limited partnerships) leading the opportunity set in equities. Boughton notes that investors can do significant "discount capture" -- making profitable trades as discounts to net asset value narrow and change, using that volatility as an additional way to generate profits. Also on the show, Bankrate.com analyst Sarah Foster discusses the pressure consumers are feeling -- and especially younger shoppers -- to spend up this holiday season, plus we revisit a late October interview with Chris Davis, portfolio manager and chairman of Davis Advisors, a conversation Chuck has described as "one of the very best interviews we will do on the show this year."

It's Black Friday, ahead of Cyber Monday and the start of the home stretch for holiday shopping, but it's not just about what's happening with retailers. John Cole Scott, chief investment officer at Closed-End Fund Advisors sorts through the big discounts in the closed-end fund world right now and comes up with four issues -- two in stocks and two in fixed-income -- that would be sound additions to an investor's holiday wish list now. Then the talk turns to retail fraud as Melanie McGovern of the International Association of Better Business Bureaus, discusses how online fraud losses thus far in 2022 have hit record levels of nearly $400 million before the holiday shopping season even gets up to speed, then Julie Ramhold of DealNews talks about the differences between Black Friday and Cyber Monday and how consumers can make the most of both days and the rest of the holiday bargains, plus Chuck discusses steps that listeners can take to keep the holidays in perspective during times of rising interest rates and high inflation.

Colin McWey, portfolio manager at Heartland Advisors, says that current market conditions are setting up well for value-oriented investors, because it is clear that many companies e market is building a scenario where a lot of companies will be worth much more in three to five years, although a number of stocks that were overpriced in 2020 and '21 will never re-attain past highs. The wash-out of companies that had a disconnect between fundamentals and enormous expectations was necessary, McWey says, but now the market is going through a healthy cleansing where the market is starting to respect a valuation discipline again, focusing on fundamentals in order to realize that profit potential as the market rebounds in the next few years. Also on the show, Tom Lydon of VettaFi makes a dividend-income fund with a covered-call strategy his pick for ETF of the Week, Regina Conway of Slickdeals discusses consumers' shopping expectations for Black Friday and hedge-fund manager Steven Grey of Grey Value Management talks about stocks in the Money Life Market Call.

John Kosar, chief market strategist at Asbury Research, says that the market has reached a key point, and he believes the lows the market made in June and retouched in October -- in the 3,500 range for the standard & Poor's 500 -- will stick, and last several quarters. He remains positive on the market for now, noting that his key indicators remain green, but notes he won't be surprised if the market re-tests those lows before moving forward again in 2023. Also on the show, Amanda Agati, chief investment officer at PNC Asset Management, discusses the rising cost of the "12 Days of Christmas," noting that inflation in the firm's Christmas Price Index is running even higher than inflation elsewhere in the economy, and how that reflects current events and broad economic conditions, author Paul Tucker discusses his new book, "Global Discord: Values and Power in a Fractured World Order" and, in the Market Call, Hank Smith, head of investment strategy at The Haverford Trust Co., discusses large-cap companies with a history of paying/raising dividends.

Brian Overby, senior markets strategist at Ally, says that the market is in a good place to have a Santa Claus rally into the end of the year, boosted by the strong consumer, but he noted that good news could carry into 2023 with an economy that could actually pull off a soft landing so long as employment, inflation and spending numbers stay where expected and continue current trends. Overby noted that while current conditions are rocky, it makes for a selective buying opportunity while waiting for the Federal Reserve to show its cards for the new year. Also on the show, Marc Zeitoun of Columbia Threadneedle discusses a survey showing that advisers and investors are looking for more flexible strategies to get by in rough markets, David Trainer of New Constructs puts a low-priced maker of oat milk and similar products in "The Danger Zone" and, in the Market Call, Bernie Horn, manager of the Polaris Global Value Fund talks about buying stocks in the messy market conditions currently being experienced around the world.

Jacob Channel, senior economist at LendingTree, says that while everyone is counting on the Federal Reserve to beat back inflation and tackle the economic problems facing the nation, 'the reality is that some of the issues we are facing aren't the kind of issues that the Fed has the ability to fix." He warns that if global supply chains struggle, prices will remain high no matter what happens with interest rates, and a worst-case scenario would be stagflation where unemployment is rising but prices email high; while that is not his base case for what's next, he expects a recession in 2023 as the price paid for getting a handle on inflation and returning the economy to more normal times. Also on the show, Michael Grayson, portfolio manager for three interval funds from First Trust Capital Management, says that investors should be giving up some liquidity to get the flexibility to invest in assets that their standard mutual fund or ETF can't hold responsibly, allowing investors to generate decent returns at times when the rest of the market is struggling. Plus, Jamie Dunaway-Seale of Clever Real Estate discusses the site's recent survey showing that a surprising number of home sellers are feeling remorse for the move they made, and Chuck answer's a listener's question on where to park short-term cash now to generate yield responsibly without taking on too much risk.

Barry Metzger, managing director of trading and education at Charles Schwab, says that the firm's latest trader sentiment survey shows that nearly 60% of traders feel like the United States is already in a recession or will be in one by the end of the year, with nearly that entire group believing that the economic slowdown will last less than one year. These traders -- investors who make 80 or more transactions in a year, but not part of the day-trading community -- are largely bearish, but believe there are opportunities in energy, health care and consumer staples. They are rotating toward value stocks and fixed income. In the ETF of the Week, Tom Lydon of VettaFi talks about a fund that was up double-digits just a week ago off of the inflation news, a move so big that it moved the ETF above its 200-day moving average and put it back into buying territory. Chuck answers a listener's question on cryptocurrency trading and the concept of "not your keys, not your coins," and the show revisits a recent interview with Jeffrey Cleveland, chief economist at Payden & Rygel.