Money Life with Chuck Jaffe

Julius de Kempenaer, senior technical analyst at StockCharts, says that money is rotating out of technology and "into pretty much every other sector," which means that participation in the current bull run is broadening out. Still, he says, there is a question of whether the upswing can continue if tech isn't participating. As a result, deKempenaer sees the market trading close to current resistance levels, and he worries there is more potential for the Standard & Poor's 500 to drop to 5,550. If that support level fails, de Kempenaer sees 5,120 -- a much steeper drop -- happening quickly. Alaina Anderson, co-portfolio manager of the William Blair International Leaders Fund, says that investors may find better opportunities and stability investing overseas, where valuations are particularly compelling. Shannon Martin, analyst at Bankrate.com, discusses her study on the hidden costs of car ownership, which showed that the average hidden expenses of owning a gas-powered vehicle in America add up to nearly $7,000 annually, and John Cole Scott, president of Closed-End Fund Advisors — the chairman of the Active Investment Company Alliance — discusses how corporate actions in closed-end funds — tender offers, liquidations and transitions to open-end funds, rights offerings and big changes in dividend policy — historically play out and how investors can use those historic results as a guide on how to act if they see those actions in the funds they own.

Andrew Krei, co-chief investment officer of Crescent Grove Advisors, says that at some point next year we could see inflation tick back up, which could lead to market struggles, but right now barring "geopolitical mayhem," he sees the market as continuing to climb, and he notes that investors should be pressing their bets with equities rather than fixed income right now. Ironically, Krei discounts fixed income immediately after Todd Rosenbluth, head of research at VettaFi, makes an ultra-short bond fund his "ETF of the Week." Dan Skubiz, senior portfolio manager at F/m Investments, talks about small-cap stocks in the Market Call and   Greg McBride discusses a new Bankrate.com study showing that nearly three-quarters of Americans have financial regrets, mostly about not saving early enough for retirement or saving nearly enough to cover emergencies

Ryan Myers, portfolio manager at Causeway Capital Management -- manager of the Causeway International Small Cap fund -- says that current valuations "are on par with some historical extremes where small caps go on to outperform fairly significantly." He likes opportunities in Japan, particularly after market troubles there earlier in August made valuations even more appealing, but he also says there are bargains to be had in European financials and AI-adjacent companies in Taiwan and Korea and elsewhere. Financial adviser Mark Matson discusses his new book, "Experiencing the American Dream: How to Invest Your Time, Energy, and Money to Create an Extraordinary Life," and Ron Lieber, money columnist at The New York Times, digs into merit aid -- the focus of his new course aimed at parents trying to find ways to navigate college funding -- and how students can tap into it.

Jeff Weniger, head of equity strategy at WisdomTree Asset Management, says that while rate cuts tend to be good for the market, there is an unusual circumstance now where the cuts upend the Japanese yen carry trade. That  created the market's short-lived August drawdown, but that circumstance could resurface; while the market has moved past that problem, Weniger notes that the Fed's expected actions in cutting rates are happening during a bull market run, which tends to be unusual, but which has to be taken as a bullish sign this time. Weniger notes that he particularly likes small caps and regional banks right now. In the "talking technicals" segment, Michael Sincere of Michael Sincere’s Long-Term Trader says investors should "be bullish, but be cautious," and talks about maintaining higher cash balances and using options strategies to protect against heightened volatility now. In the Market Call, Hank Smith, head of investment strategy at The Haverford Trust Co., discusses investing in blue-chips, big, brand-name companies that are paying a growing dividend.

Steve Rick, chief economist at TruStage, expects a unique occurrence in Federal Reserve actions between now and election date, with inflation dropping down to its target rate of 2 percent while the labor market reaches equilibrium, with the unemployment rate hitting 4.5 percent. Rick says that good news -- which will be accompanied by rate cuts from the central bank -- will push any potential recession back into 2025 and possibly '26, with economic growth falling below 2 percent, under long-term norms but not so bad that the economy craters. David Trainer, founder and president, New Constructs, pulls a shocker in the "Danger Zone," saying that a member of the Magnificent Seven -- a stock with one of the largest market capitalizations in the world -- has run so far, so fast that it is overdue for a reset that could bring the stock down by more than 60 percent. Plus economist and author Rob Larson, discusses his new book, "Mastering the Universe: The Obscene Wealth of the Ruling Class, What They Do with Their Money, and Why You Should Hate Them Even More."

Craig Johnson, senior research analyst at Piper Sandler, says that he expects the economy to avoid a hard landing, and notes that some indicators would suggest that the economy is already in recession which means it will be over by late spring 2025, which should allow the earnings to start to pick up and fuel more growth next year. Johnson notes, further, that stock markets historically tend to perform well in the first six months after the start of a rate-cutting cycle; if the Federal Reserve starts rate cuts in September, which he expects, that means the market is well positioned to avoid any sort of hard landing as it rides through transitions in interest rates, the election and the economy. In The NAVigator segment, Chris Oberbeck, chairman and chief executive officer at Saratoga Investment Corp., says that private credit — which has been on the rise for several years — is being challenged by a cooling market for mergers and acquisition activity, but he expects a pickup as rates ease, making deals easier to do. Maury Fertig, chief investment officer at Relative Value Partners, talks closed-end funds — and surprises Chuck by discussing a fund that Chuck talked about on Thursday's show — in the Money Life Market Call.

Tim Crawmer, chief global credit strategist at Payden & Rygel, says that the rise in the  unemployment has not been driven by layoffs but rather by more people looking for work, which is a positive sign for the economy. Coupled with other good looks -- like the continued strength of the consumer pushing robust GDP expectations -- it should convince individual investors to position their portfolio "with the expectation that they will see a soft landing." Still, Crawmer, notes that high valuations may limit the potential upside, putting just a bit of caution on the optimism. Todd Rosenbluth, head of research at VettaFi, also is focused on the strength of the consumer as he takes a consumer-spending fund as his ETF of the Week. Plus, Chuck answers a listener's question about dealing with a tender offer on a closed-end fund, and Raymond Bridges, portfolio manager for the Bridges Capital Tactical ETF, brings his "aggressively cautious" approach to the Market Call.

Elliot Rosenberg, founder of Hack My Honeymoon, talks about strategies consumers can take to use miles, points and more to get free trips, accommodations and more, and while the savings is real, some of the advice -- involving opening multiple credit-card accounts to capture bonuses -- is not standard for consumers. Marci Stewart, director of client education for Schwab Workplace Financial Services discusses the firm's annual 401(k) Participant Study, which showed that more than 40 percent of workers say they are very likely to achieve their retirement savings goals, up dramatically from a year ago, and a surprise given consumers' concerns over inflation and high interest rates. Plus, Chuck answers a listener's question about a perceived dislike of cryptocurrency, and we revisit a recent conversation with Jeanette Garretty, chief economist at Robertson Stephens Wealth Management.

Michael Kelly, global head of multi-asset at PineBridge Investments, says that the stock market had priced in a soft landing before the recent, temporary spike in volatility, but that action made investors realize that the potential for a hard landing is on the rise, even with Federal Reserve rate cuts on the way. Either way, Kelly says the long-term trend for the market will be positive, but he cautions that where markets go up during soft landings, investors get punished by hard landings until the bottom is reached, so he suggested caution while watching the Fed try to pull off a perfect landing. Also cautious -- but based on the market's technicals, was Lawrence McMillan, president of McMillan Analysis, who said the early August blip was nothing more than a temporary move, what will ultimately be a forgettable day and he thinks the market is more likely to test resistance at roughly 5,700 on the Standard & Poor's 500 before it tests support, which he figures is roughly 5,380. Jonathan Lansner, financial columnist for the Orange County Register turns to the ways that Wall Street resolved and evolved after the ruling that allowed discount brokers as a possible guide for how real estate firms will adapt to rule changes aimed at re-shaping the landscape and process for home sales.

Rob Haworth, senior investment strategist at U.S. Bank Asset Management, says the economic data has lined up so that the economy "can cruise through this soft landing, and not land." In the Big Interview, Haworth says that recessions have been held off for longer than expected up to now, but while he could see heightened volatility for the market for the rest of the year or beyond, the glass-half-full economy means that recession is not likely in the next year and a half. Economists -- as measured by the August 2024 Economic Policy Survey released today by the National Association for Business Economics -- seem to agree, though Lester Jones, chief economist, National Wholesale Beer Association  and a member of NABE's survey committee, notes that the imbalance between loose fiscal policy and tight monetary policy has economists worried about how things might turn after the election. David Trainer, president of New Constructs, puts Lyft back into The Danger Zone -- for the fourth time since 2019 --  noting that the stock still isn't worth $1 per share despite currently trading for more than 10 times that amount. Plus Steve Nicastro, managing editor at Clever Real Estate, discusses how changes in rules governing real estate commissions -- which went into effect over the weekend -- will play out for consumers.