Money Life with Chuck Jaffe

Craig Callahan, chief executive officer at ICON Advisers, says that since mid-July the market has been entering a "new market with a new theme and new leadership," rotating towards small-cap stocks and broadening out. Beyond small companies, Callahan's value-driven analysis currently favors dividend-paying stocks, gas utilities, life and health and property/casualty insurers too. In the NAVigator segment,  Duncan Farley, portfolio manager on the Developed Markets Special Situations team at RBC BlueBay Asset Management — the manager of the BlueBay Destra International Event-Driven Credit Fund — says  "We're looking at a multi-year high in default rates" and discusses how that will change the credit markets. Plus, Patrick Healey, founder and president at Caliber Financial Partners, talks stock investing now in the Market Call.

Noah Wise, senior portfolio manager at Allspring Global Investments — in one of two interviews focused around Wednesday's Federal Reserve announcement that rate cuts are nearly certain to start next month — says that the economic data has been so strong that it has become "a no-brainer" to cut, which is the ideal situation for making a move in a politically charged environment with a presidential election in sight. He expects the Fed to keep cutting so long as the data keeps moving in the right directions, which positions the current trend to carry well into 2025 without anything worse than a soft landing to disrupt the market. Also discussing the Fed's Wednesday announcement is Dominique Lapointe, director of macro strategy at Manulife Investment Management, who thinks that rate cuts will be a positive but that even if they extend into next year they won't be enough to stop a slow down in the U.S. economy, instead softening the blow of a downturn and blunting its impact when it finally hits. Plus, Todd Rosenbluth, head of research at VettaFi, makes an international fund his ETf of the Week and Simon Lack of SL Advisors and the Pacer American Energy Independence ETF talks energy investing in the Market Call.

Geoff Dailey, head of U.S. equities at BNP Paribas Asset Management, says in The Big Interview that he thinks "Any pullback should be bought" right now, noting that concerns over the economy, inflation, the strength of the consumer and more will add some volatility but are not likely to derail the market. Meanwhile, he notes that "small-caps in particular are poised for strong performance," noting that a huge valuation gap has emerged between those large-cap companies and the small-cap companies, probably the biggest discount we have seen going back to the financial crisis [of 2008]." He expects the market to broaden out and for small companies to benefit, though he also noted that he prefers large-cap U.S. multi-nationals to going after international investments, noting the market conditions are strong enough to keep domestic stocks ahead of foreign counterparts. Also on the show, behavioral finance expert Meir Statman discusses the emotional issues that have investors ignoring strong economic numbers to see the problems and potential financial misery in their own lives, and Alex Gailey, analyst at Bankrate.com, discusses her research into "The Motherhood Penalty," which shows the price women pay for raising kids, amounting to 31 percent less than fathers in annual wages last year alone.

Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, says that while politics dominates the news, it shouldn't be creeping into investors' portfolio moves, as available research shows that market results have proven to be better by riding the market regardless of the party that holds the White House than by trying to strategize around the results of a vote. Fridson also discusses how the current rally in artificial intelligence is reminiscent of the Internet Bubble Days, in that a lot of companies are now benefitting from the market's perception that all AI is good, but that it will soon figure out that many companies getting a boost from the trend aren't the true beneficiaries from it.    Ming Jong Tey, principal trainer at Trade Precise, says the market is at an inflection point, moving away from the Standard & Poor's 500 and the Nasdaq 100 into the small-cap space, and he sees the Russell 2000 currently on a run that shoul;d push it to where it soon challenges previous record highs. Plus  Sarah Holden discusses research from the Investment Company Institute on how fund fees have dropped dramatically over the last 20 years, and how  as a result of fee shrinkage. In the Market Call, Howard Chan of Kurv Investment Management — which last week opened the new Kurv Technology Titans Select ETF — talks about using options strategy to benefit from sideways markets and avoid pain during big downturns.

Vincent Reinhart, chief economist and macro strategist at Dreyfus - Mellon, says investors should "Never count out recessions," but he notes that the chances of one happening amid current economic strength are low, less than the 15 percent of the time that recessions normally happen. Moreover, he notes that recessions now and in the future may not look the way recessions did before the turn of the century.  New York Times columnist Peter Goodman discusses his new book, "How The World Ran Out of Everything," Bryce Colburn of USA Today Blueprint talks about a recent survey on the "junk fees" that Americans hate the most and, in The Danger Zone, Kyle Guske of New Constructs revisits retailer Wayfair, a zombie stock that may have what shoppers need but which should have investors shopping for alternatives unless they're shopping for a total loss.

Zach Jonson, chief investment officer at Stack Financial Management, says that while the stock market has been moving to record highs, "it wasn't healthy." He says that market valuations are overblown, with concentration in the index being more of a concern than at any time in history, which means that current conditions are lining up with some rare time periods, most notably the tech bubble days of the late 1990s, which ended turning ugly when the bubble burst. That's in contrast with the view from Eric Wallerstein, chief markets strategist at Yardeni Research, who says the Dow Jones Industrial Average will reach 60,000 and the Standard & Poor's 500 will hit 8,000 before the end of the current decade, and while that run could end up ugly at that point, any downturns in the interim are buying opportunities. Plus, John Cole Scott, president of Closed-End Fund Advisors — chairman of the Active Investment Company Alliance — provides an update on what's happened with closed-end funds through the first half of 2024, and Jaime Dunaway-Seale discusses Clever Real Estate's Gen Z Home Buyer Report, which showed that 60 percent of the generation just entering the workforces thinks they will never own a home.

Eric Crittenden, chief investment officer at Standpoint Asset Management, says the market has weakened to where there are no "great, super-strong trends out there," but he thinks the market is entering a transition period where new trends will start and emerge. That transition may not include a recession, Crittenden says, because "the algebra says to me that it's going to be hard to have a recession," due to the government actions that have staved it off and made it hard to forecast what's next. Todd Rosenbluth, head of research at VettaFi, goes with something new as his ETF of the Week focuses on one of the nine new Ethereum funds that debuted earlier this week. Chip Lupo discusses the 2024 Money and Relationships Survey from WalletHub, which showed that nearly 40 percent of Americans have a financial account that their partner doesn’t know about. In the Market Call, Mike Bailey, director of research at FBB Capital Partners, discusses "beat and replace" investing.

Jeffrey Hirsch, chief executive at Hirsch Holdings and editor of the Stock Trader's Almanac — which tracks stock market performance relative to presidential terms and election cycles — says that while the upcoming election is no longer a battle between two second-term presidents, the potential election of a first-term president in Kamala Harris would not result in much change for the market. While first-term presidents historically hit the ground running and make some of their most drastic moves early, Hirsch says Wall Street is prepared to adjust, which leaves him more concerned with how the market will perform late in the term — in 2026 — than he is concerned with what happens close to the election. Adam Rozencwajg, managing partner at Goehring and Rozencwajg — which specializes in investing in natural resources commodities — discusses the recent rally in natural gas and makes the unusual case for it as a play that's adjacent to the artificial intelligence boom. And speaking of "AI-adjacent" investment potential, that's exactly one of the things currently appealing to Brian Mulberry, portfolio manager at Zacks Investment Management, who talks about it among his stock ideas in the Money Life Market Call.

Dec Mullarkey, head of investment strategy and asset allocation for SLC Investments, says investors are "pretty risk-on," meaning they expect the economy is headed to an environment where rates will settle down at reasonable levels and consumers will keep spending, creating a sound environment for investors. That extends to Europe and some international markets, which will help balance a portfolio that may be impacted by a downturn late in the year, but Mullarkey says any downturn is likely to be a buying opportunity because current conditions can't keep the market down for long. That general market optimism through volatility and a correction is shared by Michele Schneider, director of trading education at MarketGauge.com, who expects heightened volatility but who sees the market likely being higher at the end of the year, with 6,000 — up about 8 percent from current levels on the Standard & Poor's 500 — being a level the market will challenge. Plus, Jonathan Smucker, portfolio manager at Marietta Investment Partners talks stocks in the Money Life Market Call.

Bob Doll, chief investment officer at Crossmark Global Investments, says that stock market valuations are extended to the point where "things need to be nearly perfect to justify those valuation levels." He is finding much better valuations internationally, noting that "Non-U.S. equity markets are cheap relative to the U.S. by an amount we have never seen before," which is why he is suggesting investors start nibbling and dollar-cost averaging into foreign markets now. Doll also reviews his annual list of 10 forecasts for the calendar year and sizes up where his forecasts stand after the mid-year point of the 2024. Doll says the economy is slowing and he expects that to show up in a market downturn before year's end. Michael Urich, chief economist at Seventh Point Analytic Consulting, discusses the latest Business Conditions Survey from the National Association for Business Economics -- released today -- which shows that a record number of respondents reported that their firms had raised prices in the last three months, but fewer respondents reported higher sales and profits, a dichotomy that suggests there might be some economic trouble ahead. Plus, Kyle Guske, analyst at New Constructs, puts a mutual fund in the Danger Zone.