Money Life with Chuck Jaffe

Vishal Khanduja, Head of the Broad Markets Fixed Income team at Morgan Stanley, says with inflation trending downward, labor data will be what the Federal Reserve is most focused on, and as those numbers move the central bank may take a choppy path toward rate reductions. While that may keep the market on edge, Khanduja notes that corporate and consumer balance sheets are very strong right now — which is unusual at the start of a rate-cutting cycle — which combined with reduced inflation and low-but-stable growth should result in a soft landing. Chip Lupo discusses the early holiday shopping survey from WalletHub, which showed that 46% of Americans enter the 2024 holidays still paying off debt they rang up during the Christmas season last year. Investment analyst Kyle Guske of New Constructs puts PGIM Jennison Mid-Cap Growth in "The Danger Zone," saying it's an expensive way to own a bunch of bad stocks, and portfolio manager Bill Davis brings his brand of high-turnover ESG investing to the Money Life Market Call.

David Ellison, Portfolio Manager and Financial Services Specialist at the Hennessy Funds, says that the banking industry is coming out of "a two-to five year period of darkness," heading for "sunny days ahead," though he notes that banks do not want interest rates to fall too far but he thinks earnings can grow even if the Federal Reserve cuts rates by another 1 percent or more. Ellison also notes that anticipated problems in commercial real estate — considered a real threat to the health of the banking system — aren't likely to materialize as a real threat now because the industry has spent the last two-plus years preparing for trouble. "It may be a drag here and there, but it won't be a blow-up problem," he says. Dana Staggs, President of Arrowmark Financial Corp., looks at a high-yielding alternative to standard banking plays, talking about how his closed-end fund relies on regulatory capital relief securities — esoteric investments that currently can generate yields of up to 15 percent — and that should hold up when rates get cut further in the coming year. Jason Brown of The Brown Report says that the stock market's technicals are showing him signs that a big downturn is in the offing, and Portfolio Manager Michael Roomberg of Miller/Howard Investments, talks energy stocks in the Market Call.

Todd Rosenbluth, head of research at VettaFi, says that the start of a rate-cutting cycle is a time when investors will want low-cost active management — rather than an index fund — in the fixed-income space. To that end, he picks a T. Rowe Price fund that uses a quantitative management style as his ETF of the Week, noting it can do the job for investors looking to diversify their fixed-income holdings. Jessica Johnston, senior director for NCOA's Center for Economic Well-Being In the U.S., discusses a recent survey by the group which showed that 80 percent of older Americans face a real risk of financial insecurity, Chuck discusses what investors and savers are facing — regardless of which side wins the election — when it comes to decisions on tax legislation that expires in 2025, covering everything from tax rates and the standard deduction to the child tax credit,estate tax exemptions and much more. And in the Market Call, Kathy Boyle of Chapin Hill Advisors discusses how she uses ETFs in pursuing core-and-explore investment strategy.

For about a decade, Chuck has offered the kids in his neighborhood a chance to pick cash or candy, to decide between a trade or a treat. It's part of his belief that even young kids are able to understand and make basic financial decisions, deciding if they would rather have candy or if the financial prize is worth more to them because it's different and more useful than candy. He always encourages others to put their own stamp on the idea with kids in their neighborhood, but each year Chuck also tweaks the game, making subtle changes to keep things interesting for the kids (and himself). This year, he is making a change to the "lottery option" that might make it appear that the children have a better chance at winning big by going that route, but instead makes it so that the children would almost certainly be better off picking any choice but the lottery option. Phil Moeller, author of "Get What's Yours for Medicare: Maximize Your Coverage, Minimize Your Costs," discusses the daunting process that Americans face in trying to maximize their money and health-care coverage under the Medicare program; Moeller believes that the most valuable unread documents in America are Medicare enrollment documents. Plus Joe Schmitz Jr. of Peak Retirement Planning answers three questions from audience members all about converting traditional IRAs to Roth IRAs, and how to determine if paying taxes now is worth the ability to never pay taxes on the investments later.

Jeff Krumpelman, chief investment strategist at Mariner Wealth Advisors, expects the Standard & Poor's 500 should hit 6,000 by mid-2025, but he acknowledges that those gains might surprise him by coming early, turning 2024 potentially into a "super year," which would turn 2025 into a less-stellar environment. Either way, he expects the market to take a brief breather before a potential rebound for the end of the year carrying the market into the new year. Matt Zajechowski, research analyst at Northstar Inbound, discusses a survey the group did for JeffBet on the most expensive concerts in terms of ticket price per minutes the act typically plays. Chuck answers a listener's question following up on  a recent interview that looked at certificates of deposit rates and how investors might play CDs now that rate-cutting has started, and Paige Henderson, senior portfolio manager on the Resilient Global Equity team at Allspring Global Investments, talks about playing defense now, before the market makes conditions more tenuous.

Sheraz Mian, director of research at Zacks Investment Research, says that the cumulative effect of the Federal Reserve's rate cycle starts showing up, it will goose the economy and the stock market, and with the worst of the post-Covid struggles behind us, the "soft landing" most experts forecast is actually what we're experiencing now, and that better times — and continued strong corporate earnings — are ahead, without a big correction or downturn in the interim. Mian isn't the only one expressing bullish sentiment, as Charles Rotblut, editor of AAII Journal checks in with the details of the latest AAII investor sentiment survey, which has shown particularly high levels of bullish sentiment for about two months now, but who notes that the market typically delivers unimpressive gains when emotions are running high. David Trainer of New Constructs re-affirms the past selection of Affirm Holdings in The Danger Zone, noting that the stock's recent gains of about 70 percent have simply positioned it to take another big fall, as he believes investors have bought the hype and ignored the reality of the company's struggles to deliver real profits. Plus, Money Life introduces its latest sponsor, Monetary Metals; Saad Zein, chief portfolio officer for Monetary Metals, discusses how the company enables investors to earn interest on their gold and silver holdings — paid in precious metals — and how generating that income changes what many people consider the biggest weakness and turn-off to putting money into silver and gold.

Victoria Fernandez, chief market strategist at Crossmark Global Investments, says investors will have to pay the piper for the market's last two years of out-sized gains, and she thinks the music will start playing early in 2025. While she thinks the market will avoid a big recession and/or market crash — and in fact thinks the market will rebound quickly around the mid-year mark — she thinks earnings will slow, incomes may fall and the consumer will start to cut back after the holiday season, which will contribute to that period where the market cools. Plus, investors flooded into certificates of deposit as interest rates were spiking in 2022 and '23, and now those CDs are coming due and monies reinvested just as a rate-cutting cycle has started; John Blizzard, chief executive officer of CD Valet, discusses how CD investors should shop around and think about maturities, as they pursue the best deals still available for their safest assets. In The NAVigator, John Cole Scott, president of Closed-End Fund Advisors and chairman of the Active Investment Company Alliance, discusses interval funds and digs into the data on four funds that put a unique spin on the structure to create interesting alternative opportunities for investors now.

Nick Sargen, senior economic advisor at Fort Washington Investment Advisors, doesn't see a recession as imminent but he says a lot of the good news has already been priced into the stock market, which will lead to slower gains or sideways performance moving forward. Sargen says that market observers expecting a soft landing were thinking that situation would allow the Federal Reserve to aggressively cut interest rates; in a no-landing scenario, however, investors should not expect the rapid rate cuts or the big rally that typically comes with a rate-reduction cycle. Todd Rosenbluth, head of research at VettaFi, makes Neuberger Berman Option Strategy his "ETF of the Week," discussing where this kind of alternative fund fits into an investor's portfolio, and in the Market Call, Jay Hatfield, chief executive officer at Infrastructure Capital Advisors mixes macro big-picture observations with the micro of solid fundamentals to identify interesting income-producing stocks. 

Dominic Ceci, chief investment officer at Johnson Financial Group, says that investors can't expect the stock market — after 20-plus percent gains in 2023 and this year — to roll along at that pace indefinitely, noting that record highs have stocks trading well above their normal range relative to earnings. If earnings normalize and growth slows a little bit, the economy can stay strong while the market goes through a long sideways or slightly down period, likely lasting for much of next year. He says in The Big Interview that kind of benign scenario is more likely than a hard landing or big market declines. Matt Kaufman, head of ETFs at Calamos Investments, discusses the firm's latest structured products, which are tied to the stock market, but which use options to virtually ensure that losses are impossible; he explains how they work and where they might fit into investment portfolios. Plus, with big Powerball and MegaMillions jackpots on the line this week, Matt Zajechowski discusses research he did for Lucky.me showing which states have produced the most big jackpot winners — and the states where no one has ever claimed the biggest prize — as well as which numbers have proven to be luckiest — and the least lucky — when it comes to grand prizes in the past.

Matt Fox, president of Ithaca Wealth Management, says that while it is always bullish to have the stock market in record-high range, the 20-plus percent gains of 2023 and again this year are setting up a long period of digestion/sideways movement that may last for much of 2025. He sees the stock market with room to keep running for now, noting that he thinks the market can gain about 7 percent from current levels before resistance digs in. When that happens, he's not expecting any sort of sharp reversal or crash, just flat markets while the market adjusts. Brian Reisinger discusses his book,"Land Rich Cash Poor: My Family's Hope and the Untold History of the Disappearing American Farmer," and how the future of farming could play out at a time when demands for food are rising but the number of farms providing that food is shrinking. In the Market Call, Steven Grey of Grey Value Management discusses how he combines classic value investing with what he calls "valuation investing" to find situations in which significant mispricings become his future profits.