Money Life with Chuck Jaffe

Steve Sosnick, chief strategist at Interactive Brokers, says that investors appear divorced from fundamentals, buying dips, chasing rallies and generally hoping for a lot of things to go right as the market climbs "a huge wall of worry" and mostly ignores that earnings growth forecasts of 12 percent entering the year are now being predicted at about 7 percent. Sosnick expects interest rate cuts later this year, but notes that they will be made from a position of economic weakness, and he also thinks the stock market is much more likely to re-test its April lows — right after tariff policies were announced — than to set new record highs, noting that just the conditions that are clear and aren't muddled by uncertainty should make investors think "Buckle in for volatility." Just over a month after making an actively managed commodities fund the ETF of the Week, Todd Rosenbluth head of research at VettaFi, turns his focus back to commodities, this time highlighting an index-based option from Aberdeen Investments. Plus Chuck answers a listener's question about investing in private credit and why he has repeatedly questioned experts about the potential for trouble in that emerging investment arena, which those money managers routinely have downplayed in their answers.

Chris Zaccarelli, chief investment officer at Northlight Asset Management, says that investors watching headlines about the economy, the weakening dollar and more need to realize that policy shifts and global changes play out over long stretches of time, so that investors should react in small, modest ways. For Zaccarelli, that has included adding gold to the portfolio as a dollar diversifier and reducing risk while waiting to see how the economy unfolds and creates chances to be opportunistic buyers in areas like small-cap stocks and more. Rachel Perez discusses a survey done by Secure Data Recovery which looks at Americans' obsession with tracking their data — from hours sleeping to weight to all things financial — which found that 70 percent of the Americans who track their spending (and nearly two-thirds of those who track savings) say that watching and analyzing the numbers makes them anxious. Plus retired economics teacher David Mayer discusses his new book, "Economics in Plain English," and why in challenging times there seems to be trouble coming up with standard definitions for common terms like "tariff."

Karl Mills, partner at Cerity Partners, says investors have survived all kinds of events that seem as bad or worse than anything they are facing now, which is a reason to "stay along for the ride," even if that means moving to the slow lane — where he is positioned now — and being moderately defensive. Mills says he looks at current events "like friction," in that the "don't prevent things from happen, but they make it harder for things to happen" by slowing growth, raising prices and cutting into sales, which will dampen market results while they play out. Mills notes that domestic market valuations remain high, international markets are priced more attractively and also benefit from the low expectations investors have of how foreign investments will turn out amid ongoing tariff questions.George Bory, chief investment strategist for fixed income at Allspring Global Investments, discusses the potential short- and long-term outcomes resulting from last Friday's downgrade of the United States' credit rating by Moody's. While the downgrade implies that the U.S. is a bigger credit risk than it seemed — which could make some investors expect higher interest payments to buy government bonds — Bory notes that this move was largely expected and is more a warning of potential future problems than a concern for current fixed-income investors. Plus, Tim Koller, co-author, "Valuation: Measuring and Managing the Value of Companies" discusses how current conditions — much like Covid times — are changing long-term business-valuation prospects for companies.

Fritz Folts, chief investment strategist at 3Edge Asset Management. says the uncertainty about tariff policy — which has pushed uncertainty over interest-rate and monetary policies nearly out of sight — has made it particularly hard for investors to decide where to go with their money now. While the hard economic data is good, Folts notes that the concern is how quickly it may change once tariff chaos hits consumer prices; the result is that he's splitting his equity assets 50-50 between domestic and international stocks, and is looking at short-duration bonds and gold to hedge the stock exposure. Selma Hepp, chief economist at Cotality, discusses the latest National Association for Business Economics Business Conditions Survey, released today, which shows that economists' share Folts' concern about the coming months, with 75 percent of the survey respondents putting the probability of a recession in the next year at 25 percent. Just 15 percent of economists were that strong on recession chances in January. Plus David Trainer, president of New Constructs, puts a digital payment technology company in the Danger Zone for the third time, and Daryl Fairweather, chief economist at Redfin, discusses her new book, "Hate the Game: Economic Cheat Codes for Life, Love and Work."

James St. Aubin, chief investment officer at Ocean Park Asset Management, says the stock market is pricing solid corporate earnings and generally strong economic growth momentum, but those gains haven't ended the uncertainty around tariff policies. While the market seems to think the impacts will be muted, St. Aubin says we are in a waiting period to see how consumers, markets and economies are truly impacted by tariffs, and the generally positive view leaves more potential downside risk that investors should guard against. Mark Gatto, co-chief executive officer at CION Investment Group, discusses how private markets have been reacting to the policy turmoil and how they have been steadier and less volatile than public markets amid the broad market swings caused by current events. Plus Adam Bierman, a founder of MedMen — one of the earliest public entrants into the marijuana business — discusses his book "Weed Empire: How I Battled Gangsters, Investment Banks, and the Department of Justice to Build the Cannabis Industry in America."

Andrew Foster, chief investment officer at Seafarer Capital Partners — manager of the Seafarer Overseas Growth Fund — says emerging markets are poised to thrive in an environment where the dollar is weakening against not only foreign currencies but gold, Bitcoin and "a bag of Doritos." Foster says that the fundamentals are improving for emerging markets, which are showing the potential for a second consecutive year of 12 percent growth in earnings despite tariff and trade concerns. He says stronger stock profits combined with currencies getting stronger against the dollar is "a good setup" for investors looking to diversify a portfolio. Todd Rosenbluth, head of research at VettaFi, also talks international investing, going abroad — though to developed markets rather than emerging markets — with his pick for the ETF of the Week. Plus, Chuck talks about how investors might want to adjust portfolio fits — and follow the advice from recent guests — now that the market has bounced back and crossed into positive territory for the year, reversing the big drops that occurred when tariff policies were first announced.

George Milling-Stanley, chief gold strategist at State Street Global Advisors, says he expects gold to trade between $3,100 and $3,500 for the remainder of the year, but is making the bullish case for new record price levels as high as $3,900 an ounce, noting that he believes the new bottom level for gold is $3,000 an ounce, up by $1,000 in the last year. Milling-Stanley says gold has been working well as a geo-political hedge, providing ballast to portfolios that have been whipsawed by current economic policies, but he acknowledges that gold has not done a great job in its traditional role as a counter-weight to inflation, because inflation levels have not been high enough for long enough for gold to deliver in that role. Kristy Akullian, head of iShares investment strategy for the Americas at BlackRock, says that Tuesday's consumer price index numbers didn't show the impact of tariff-related price increases, but those could impact the numbers as soon as next month; meanwhile, the current CPI print should encourage the Federal Reserve to stand pat on interest rates and might encourage investors to make a small move up the risk spectrum, focusing on quality and low-volatility investment factors rather than simply looking to minimize volatility. Plus Kerry Sette discusses the latest consumer research out from Voya Financial, which showed that more than one in three working Americans say that the current economic uncertainty and the potential for higher prices caused by tariff policies is severely impacting their ability to save for retirement.

Vincent Reinhart, chief economist and macro strategist at BNY Investments, says that Monday's temporary halt to the tariff battle between the United States and China significantly reduces the potential for a recession, but it doesn't create the clarity that investors and business leaders are seeking. He believes the U.S. will continue to deliver solid results long-term, but warns that the road to those long-term gains is likely to be bumpy, and even notes that "for now, cash looks pretty attractive." Larry Tentarelli, editor at Blue Chip Daily Trend Report, says that the market's gains Monday continue a trend that has been building since the market bottomed after "Liberation Day." He says the recent moves have crossed trend lines and moved the Nasdaq out of bear-market territory and the recent gains have more room to run. Plus, Paula Fleming, chief spokesman for the Better Business Bureau of Eastern Massachusetts, Maine, Rhode Island and Vermont, talks about avoiding summer scams around roofing, home construction and more.

Talley Leger, chief market strategist at The Wealth Consulting Group, says the stock market over-reacted to the downside over tariff announcements and that investor sentiment was so sour that it flashed big buying signals to him. Now that there has been some easing of tariff tensions with the United States and China announcing a deal on Monday, Leger says he thinks the market can push through the trouble, sustain a 2 percent growth rate and work through volatility to end the year with the Standard & Poor's 500 in the 6,500 range, about 15 percent up from where it started the day. David Trainer, founder and president at New Constructs, puts FreshPet back in the Danger Zone, noting that the stock has a franchise that might attract potential buyers, but it has a business that can't see a clear path to profitability as it exists now. David Brady, president, Brady Investment Counsel talks stocks in the Money Life Market Call.

David Kelly, chief global strategist at J.P. Morgan Asset Management, says that using tariffs "is like throwing a grenade as an offensive weapon when you are in a small room. You are much more likely to damage yourself than anybody else," which is why he is expecting the Trump Administration to back away from its heavy demands rather than go into a trade war. Despite being "one Tweet away from a solution," Kelly worries that the economy will suffer damage — particularly if it's not cleared up soon — but he notes that he does believe a recession is in the offing, with the good news being that he thinks that slowdown will be shallow and short-lived, passing by the end of the year. Peter Chung, director of research at Presto Research, a firm that trades digital assets, checks in on Bitcoin and other cryptocurrencies and discusses their strong rebound since taking a nosedive along with the stock market heading into "Liberation Day" and through the subsequent downturn; he discusses how digital assets are being impacted by tariff concerns. Plus Andrew Kohl, portfolio manager for Aberdeen Investments' Total Dynamic Dividend and Global Dynamic Dividend funds, says investors can find strong payouts and good valuations buying foreign dividend-paying stocks, noting that many companies can keep rolling regardless of trade policy outcomes in the coming months. He also names two of his favorite dividend plays for the current market.