Money Life with Chuck Jaffe

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NFCU's Frick: The Fed has less power to fix things than markets want to believe Apr 12, 2024

Show notes

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.

Two hot takes on the hotter-than-expected inflation numbers Apr 11, 2024

Show notes

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.

SSGA's Milling-Stanley: Gold should keep thriving in this environment Apr 10, 2024

Show notes

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.

Hi Mount's Delwiche: 'It takes bulls to have a bull market' Apr 09, 2024

Show notes

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.

Comerica's Adams expects 'a pretty good year for the economy,' helped by summer rate cuts Apr 08, 2024

Show notes

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.

Asbury Research's Kosar: It's risk-on, especially in commodities, despite warning signs Apr 05, 2024

Show notes

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.

VettaFi's Rosenbluth: This is an exciting time for boring investments Apr 04, 2024

Show notes

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.

Macro Institute's Nick says we'll talk much more bad news later this year Apr 03, 2024

Show notes

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.

StockChart's Keller: This 'relentless incline' is reminiscent of '21 Apr 02, 2024

Show notes

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.

S&P Global's Gruenwald expects Fed cuts through '25 until rates hit 3 percent Apr 01, 2024

Show notes

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."

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