Money Life with Chuck Jaffe

John Blank, chief investment strategist and chief economist at Zacks Investment Research, says that there will not be a recession -- or anything resembling it -- this year, but he makes it clear the can't be said for 2025, once the election cycle and concerns about the impact of higher interest rates and inflation staying around longer play out. Blank says he does not expect the Federal Reserve to be pressured into making rate cuts, but notes that it could make a cut in the fall leading into the election if the data suggests one is appropriate, but he doesn't see the central bank moving off of its plan to get inflation back to the 2 percent level. When that plays out in that recession that's coming for next year, Blank says it could help to minimize the duration of the downturn. Also on the show, Adam Ruben, vice president of the Economic Security Project, discusses the group's survey of consumers using the IRS Direct File pilot program, noting that the new filing methods drew a lot of consumer interest but also a lot of praise by the 140,000-plus taxpayers who used the system across 12 states. He expects the IRS to dramatically expand the program in the near future, given the strength of the results this year. Plus, in the Market Call, Noland Langford, chief executive officer at Left Brain Wealth Management talks growth stocks.

Brian Levitt, global market strategist at Invesco, says that the years after peak inflation and peak tightening tend to be good for markets, and he expects that to continue with a market and economy that he thinks can avoid big downturns. Levitt says the economy never got the recession many people expected because the economy didn't have a lot of excesses to create bubbles or big issues, but also because trouble came in spots, rolling into one area without taking over the whole landscape. As a result, Levitt's major guideposts for recession haven't been flashing warning signs, though he acknowledges that the next six months will likely rise and fall almost entirely based on the actions of the Federal Reserve and how the market responds to them. Jeff Krumpelman, chief investment strategist at Mariner Wealth Advisors, says he expects the market to recapture the record highs it was at earlier this year, with a year-end target of 5400 for the Standard & Poor's 500. Plus Ken Laudan, portfolio manager, Buffalo Large Cap Growth Fund discusses innovative, high-quality, durable large-cap growth companies in the Market Call.

Dominic Ceci, chief investment officer at Johnson Financial Group, says that while a soft landing has been priced into the stock market, sticky inflation is what could make things take a turn for the worse, noting that the longer inflation hangs around, interest rates won't be cut and that will lead to a rougher downturn. Ceci says interest rates are a driving force for stock markets, with an inverse relation where rates staying high would be bad for equities, while rate cuts would be a big plus. Also on the show: Lester Jones, chief economist for the National Wholesale Beer Association, discusses the Beer Purchasers' Index reaching its highest levels since 2021, portending a strong summer not only for beer drinkers but for the economy; David Trainer of New Constructs puts a Fidelity sector fund into the Danger Zone, and Mac Sykes, portfolio manager for Gabelli, talks financial stocks in the Market Call.

Jeremy Schwartz, global chief investment officer at WisdomTree, says that despite current headlines, the economy will have a higher real growth rate, with productivity improved by technological advances and continued full employment, which should help the economy avoid recession. He notes that inflation rates may not be quite as high as they seem, saying that inflation is below official government levels when looked at in more updated, modern ways to evaluate consumer prices, noting that shelter costs are dramatically overstated in traditional measures, skewing the numbers. All of this creates a positive long-term outlook, Schwartz said. Adam Turnquist, chief technical strategist at LPL Financial, says the market's technical picture suggests a downturn in the offing, but likely nothing beyond a 5 percent decline before the market resumes pursuit of record highs. Jonathan Mondillo, head of North American fixed income for abrdn says that record discount levels for municipal bond closed-end funds, coupled with attractive yields on those funds, are creating real opportunities for income investors. In the Market Call, Adam Peck of Riverwater Partners talks about putting a social investment lens over a market view to select stocks.

Jack Janasiewicz, portfolio strategist for Natixis Investment Managers Solutions, says that inflation is moving in the right direction -- albeit more slowly -- and economic growth remains resilient, creating an environment where corporate earnings continue to grind higher. That has him locking into his plan and overweighting stocks. Janasiewicz says that so long as inflation doesn't reaccelerate and force the Federal Reserve to increase rates, conditions should remain benign and comfortable for investors. Also on the show, Todd Rosenbluth, head of research at VettaFi, makes the Van Eck Gold Miners ETF (GDX) his pick for "ETF of the Week," and in the Market Call, David Kalis, portfolio manager at The Future Fund, talks about finding the right forward-looking opportunities in markets now.

Lyle Fitterer, portfolio manager for the Baird Strategic Municipal Bond fund, says that investors should take the Federal Reserve at its word, expecting interest rates to have peaked, anticipate a cut but don't expect it to happen until the numbers warrant it. That may not happen until late in the year or into 2025. Meanwhile, he notes investors are getting strong returns -- particularly in muni bond funds where there are additional tax benefits from investing -- though not getting paid to take on extra credit risk, even though defaults and delinquencies haven't gone up dramatically with rates staying higher for longer. Also on the show, Ted Rossman discusses the latest Bankrate.com survey showing that Americans aren't just planning to go far and wide this summer, they're planning to go into debt to get there; Chuck goes "Off The News" with the Department of Labor's release of new fiduciary guidelines for investment managers, and Ryan Jacob, chief investment officer of the Jacob Funds talks small-cap technology in the Market Call.

Andrey Kutusov, portfolio manager on the global, international and emerging markets small-cap teams at Seven Canyons Advisors, says that "near-shoring" or "China plus one" supply-chain diversification will "be the dominant force in international markets over the next decade." Kutusov says that geopolitical pressure and rising labor costs have pushed companies out of China or made them open additional capabilities elsewhere, most notably in India and Mexico. Plus, international interest rates are higher than in the U.S., leaving places like India, Mexico and Indonesia with economies that have room to ease rates and accelerate future growth. Also on the show, R. Jisung Park, whose new book "Slow Burn: The Hidden Costs of a Warming World" digs into the economic impacts of global warming events, plus we revisit a recent chat on the market's technicals with Willie Delwiche, investment strategist at Hi Mount Research.

Scott Wren, senior global market strategist at the Wells Fargo Investment Institute, expects the Federal Reserve to cut rates, but no more than twice this year and in September at the earliest, and he says it's increasingly likely the moves won't start until 2025. The amazing thing, Wren says, is that the stock market got to where it was flirting with record highs despite investors adjusting from six projected cuts this year down to potentially none. He says market valuations are high and he expects them to give in to economic pressures to move lower, but long-term he's positive on equities, liking industrials, health care and energy stocks while trimming technology and communication services, the big winners from 2023. David Trainer, president at New Constructs revisits pet-insurance company Trupanion, a Zombie stock that he says may be worth shorting as its business model is flawed and unlikely to be turned around. Plus, Larry Swedroe, chief research officer at Buckingham Wealth Partners, discusses his new book, "Enrich Your Future: The Keys to Successful Investing."

Marko Papic, chief strategist at Clocktower Group, says that two wars have had less impact on markets that many observers have expected because the market has recognized that geopolitical events require a direct tie to earnings before they can truly dampen gains. Because of that -- but also because of issues he sees with the domestic economy -- Papic says investors who are giving up on international markets and getting their diversification by overweighting U.S. multinational stocks are making a mistake. In a wide-ranging interview, Papic notes that he expects to be bullish right up to Election Day in November, but the results of the vote -- particularly if they give either presidential candidate the control of Congress to boot -- could have broad and dramatic impacts on the market in 2025 and beyond. Also on the show, John Cole Scott of Closed-End Fund Advisors reviews the first quarter results for closed-end funds, interval funds and business-development companies, noting that it was a strong period with more than 90 percent of closed-end issues making money in the first three months of 2024, although municipal bond funds continued their lagging ways. Plus, Chuck gets to talk about his childhood fantasy car with University of Toronto professor Dimitry Anastakis, whose new book is "Dream Car: Malcolm Bricklin’s Fantastic SV1 and the End of Industrial Modernity."

David Ellison, portfolio manager for the Hennessy Large Cap and Small Cap Financials funds, says that investors should not expect the classic thinking of lower rates equals higher margins and bank stocks go up, because the math may not work that way this time, which is why he is hoping rates stay where they are for longer. Ellison says that the Federal Reserve should wait until something about the economy breaks if it wants to help the banking sector, which needs to go through its classic cycles, which have been stunted by Fed actions over the last few years. Todd Rosenbluth, head of research at VettaFi, also weighs in on the financial services and banking sector, but in his case it's by turning to an insurance fund as his pick for ETF of the Week. Plus, in the Market Call, Jeffrey DeMaso, editor of the Independent Vanguard Adviser, discusses not only his manager-centric fund-selection style but also his recent foray into -- and now out of -- bitcoin.

Ben Ashby, head of investments at Rayliant Global Advisors, says he's not particularly worried about what two current wars and other issues are doing to the economy ad stock market now, but that his real worry is federal policies in terms of fiscal expenditures. "To me, that doesn't look sustainable, and that looks more like an emerging market than, basically, the leader of the free world." He says most of the conditions are in place in the U.S. for an inflationary medium-term outlook, though he does think that the U.S. market should be able to avoid a depression after the current concerns get sorted out, but that conditions will feel like the 1970s, a period of high inflation and economic difficulty. Also on the show, Nick Young, chief experience officer at Money Pickle, talks about the question that savers should be asking their advisers regularly that most ignore, Ted Rossman of Bankrate.com discusses the troubles that consumers have encountered as they have increasingly gravitated towards using "Buy Now, Pay Later" programs. In the Market Call, Joe Rinaldi, president/chief financial officer of Quantum Financial Advisors, covers both stocks and exchange-traded funds.

Dan Zanger, founder and chief technical analyst at ChartPattern.com, says that he has followed the leaders out of the market, noting that the artificial-intelligence companies that had led the market's rally to new highs have now gone into consolidations and he's content to accept money-market returns until the market changes its tune and the charts stop suggesting that they want to go lower. Also on the show, Herb Greenberg -- longtime journalist and financial analyst -- talks about his new firm, WallStreetBeats.com and the twist it is putting on traditional institutional research, as well as why he's not just starting a new business in his 70s but never planning to retire, and why others might want to plan a "retirement" that includes some work. Plus, Craig Martin discusses the 2024 U.S. Full-Service Investor Satisfaction Study from J.D. Power, which showed that people using financial advisers are happier than ever with their results but they're not loyal to their advisers, which may mean that when the market moves away from recent highs they could move on from their counselors.

Edward Yardeni, president and chief investment strategist at Yardeni Research, says the economy is resilient enough to handle current levels of interest rates, and that better economic growth will allow earnings to drive the stock market higher even as anticipated rate cuts from the Federal Reserve are put off until 2025. Yardeni says he expects the rest of this decade to resemble the Roaring 20s, without irrational exuberance but also without the Great Depression to follow as it did a hundred years ago. In The Danger Zone, David Trainer at New Constructs calls shenanigans on Root Inc., noting that price targets on the stock have been raised by over 500 percent, but profitability forecasts have not been going up, suggesting the stock is due for a hard fall after its recent big bounce up. In the Market Call, James Abate of Centre Asset Management -- manager of the Centre American Select Equity fund -- talks

Robert Frick, corporate economist at Navy Federal Credit Union, says that the current issues keeping inflation high are about supply-side economics and are the kinds of problems that the Federal Reserve can't just fix by cutting interest rates. So while he sees the Fed as having pulled off the soft landing earlier this year, it can't "save us" this time, although he says the strong economy should ensure that the cycle should play out without a crash or catastrophe. Ann Somers Hogg, director for health care research for the Clayton Christensen Institute, discusses her work showing that caregivers -- particularly working mothers -- are suffering through mental health issues impacted largely by society not understanding the issues they are facing. As a result, she notes that if health is wealth, working moms are living in extreme poverty. Plus Bryce Doty, senior portfolio manager at Sit Investment Associates, says the uptick in inflation is not enough to overwhelm the yields investors are earning, noting that real returns may be better than ever. He says investors should enjoy collecting the high yields while interest rates remain high, but total returns should improve once cuts start. Doty is not expecting meaningful rate cuts this year -- he anticipates two reductions, one after the election -- but says that the long-term average gap between the Fed funds rate and inflation is well above its typical zero, so the central bank can cut rates and have a positive gap, meaning it can claim to be tough even as reductions start. Doty anticipates the important cuts -- the ones which narrow that gap back to near zero -- will occur in 2025.

With Wednesday's release of the latest Consumer Price Index numbers shaking the market's confidence that the Federal Reserve will cut rates soon, Chuck gets the latest take from Christian Chan, chief investment officer at AssetMark, and Gargi Chaudhuri, chief investment and portfolio strategist at BlackRock. Both see the Fed as acting, though Chan expects the central bankers to wait longer until conditions almost force a move; Chaudhuri still sees cuts later in the year, though she says a June cut may now be off the table. One area where they disagree is that Chan doesn't like the value investors are getting in intermediate-term fixed income, while Chaudhuri says that investors should be looking for intermediate-term fixed income and lengthen maturities now ahead of rate cuts later. Also on the show, Todd Rosenbluth, head of research at VettaFi, looks to a senior bank loan fund as his ETF of the Week and, in the Market Call, Chuck Carlson, chief executive officer at Horizon Investment Services -- editor at The DRIP Investor newsletter -- brings his firm's Quadrix system to the fore, noting the sectors that score particularly well now and the areas where the system struggles to find buys.

George Milling-Stanley, chief gold strategist at State Street Global Advisors, says that inflation staying stubbornly above the target of the Federal Reserve -- despite the central bank's moves that have raised interest rates to 20-year highs -- has created the kind of market conditions in which gold, historically, has thrived. He does not think gold's success is necessarily due to its traditional role as a hedge against inflation, because that requires inflation sustained at levels above 5 percent, but it is other dynamics like geopolitical risk and two ongoing wars that are combining with inflation to drive gold now. Also on the show, Cam Miller of Money Pickle talks about how market highs have shown that consumers are happy with their financial advisers, but how consumers haven't developed loyalty to advisers, a sign that they might bail out and reduce the effectiveness of financial planning if/when market conditions turn. Matt Brannon discusses the "True Cost of Homeownership" study from Clever Real Estate, which showed that a surprising number of Americans find themse3lves house poor and having regrets about the properties they own, and Emerson Ham III, senior partner at Sound View Wealth Advisors, makes his debut in the Market Call talking stocks, traditional mutual funds and ETFs.

Willie Delwiche, investment strategist at Hi Mount Research, says the bullish sentiment and investor optimism should lift the commodities market and help the market rally keep rolling, though he says investors should be worried that conditions are taking a turn for the worse when more stocks are making new lows rather than new highs or the Standard & Poor's 500 falls below its long-term average. He says the Federal Reserve may decide not to cut rates until those conditions appear, noting that the central bank won't want to act earlier than conditions force it to. Also on the show, Howard Dvorkin, chief executive at Debt.com, goes Off The News discussing how Fed data showing higher delinquency rates and rising charge-off data are supported at the grass-roots consumer level, noting his site's most recent credit-card survey, which showed that more than one-third of Americans have maxed out their credit cards in recent years as inflation and interest rates were rising. Cassandra Happe, analyst at WalletHub.com, on the site's survey showing that consumers say they are fed up paying credit-card transaction fees, though they are not taking many steps to actually avoid them. Plus Chuck answers two listener questions on subjects that the writers think are political but where Chuck thinks the answers should be focused on process and math.

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.