Money Life with Chuck Jaffe

Brad Lamensdorf, manager of the Ranger Equity Bear ETF and Alpha Alts — a new long-short hedge fund set to open soon — says he thinks the market is due for a bear market, and the indicators are starting to show signs of stress, setting it up to get knocked down. He worries the trigger might be what's happening in the bond market, where higher rates are going to slow the economy, triggering a correction  or worse. Lamendorf says that over the next few years, "there will be a very large layer of stocks that don't do well ... struggling under this environment and valuation."
While Lamensdorf focuses mostly on the equity markets' reaction to Treasury rates hitting their highest level this week in nearly 20 years, John Cole Scott, president of CEF Advisors weighs in on what it means for income-oriented investors, particularly in closed-end funds. He says the Treasury situation — including the U.S. Treasury announcing it would double its buy-back capacity — currently calls for portfolio tilts and mild changes, but notes he will be watching for bigger buying opportunities.
Ryan Jacob, chief investment officer of the Jacob Funds, discusses technology stocks in the Market Call. Jacob, who was the manager of the first pure-play Internet fund during the late 1990s, also compares the artificial-intelligence revolution to the Internet situation, sizing up the similarities and whether the current bull market has to come to a similarly ugly end.

Gabe Diederich, portfolio manager on the municipal income team at Baird, says that yields are back near the upper end of their recent ranges, "capturing the imagination of investors" searching for income at a time when the stock market is making them nervous. Diederich discusses how artificial-intelligence is impacting bond markets, between municipalities financing infrastructure products or corporations issuing debt to pay for A.I.-related capital expenditures, and discusses strategies for using — or trying to eliminate — bonds as an A.I.-adjacent play, but how investors with huge expectations for artificial intelligence need to have more realistic hopes, based more around consistent returns, when it comes to bond tied to artificial intelligence.
A week after making an actively managed fund filled with blue-chip growth stocks his "ETF of the Week," Todd Rosenbluth, head of research at VettaFi, circles back to large caps but this time selects an index-based large-cap value-oriented fund. It's a contrast in styles and management techniques that also digs into portfolio construction and the way the funds should be used by investors.
In the Market Call, Erk Aydogan, co-founder of Traidechart — an app that uses artificial intelligence to examine stock prospects over different investment time frames — talks about the approach, which is designed to use computing power to determine confidence in a stock's direction and ability to deliver to investor expectations.

Joe Quinlan, head of CIO market strategy for Merrill and Bank of America Private Bank, says he expects some near-term choppiness, but longer-term he is expecting that volatility to be a buying opportunity because "the S&P 500, the U.S. economy, you want to own it forever." Quinlan says that investors need to recognize that there will be drawdowns, but they are resetting and re-pricing a market and encouraging investors to diversify, mitigate the hard times and stay focused on their ultimate goals. Quinlan says that he is not expecting a recession for several more years — until some of the artificial-intelligence frenzy calms and there's more clarity on the ultimate winners from it — but he says investors should expect a "good year" for 2027, but says he expects the market to deliver modest single-digit gains into at least 2028.
Mark Hackett, chief market strategist for Nationwide, discusses survey research from the Nationwide Retirement Institute, which found that more than three-quarters of non-retired investors are concerned about a U.S. economic recession in the next 12 months, but very few of them are changing the way they invest to reflect those worries  instead, Hackett says they are buying the dips and, in some cases, taking on more risk. Hackett says it highlights another discrepancy between hard and soft data — the way that consumer sentiment numbers show that people are miserable but spending data shows they haven't curtailed habits — showcasing why Wall Street has continued climbing the proverbial wall of worry, overcoming investor fears to return to record levels.
Plus, Gary Fitts, a retired Army lieutenant colonel, discusses his strategic approach to life, detailed in his new book "The Longevity Triad: A Practical Guide to Building a Strong Body, a Sharp Mind, and a Secure Future."

Andrew Foster, founder and co-chief investment officer at Seafarer Capital Partners, says he thinks "a bubble has formed amongst certain artificial intelligence stocks, particularly some of those that were propelling Korea higher," but despite that emerging markets are coming out of a lost decade and the "picture in the emerging markets [outside of the inflating bubble] is quite broad-based and good." Fostesays investors should be looking to emerging markets to get non-dollar exposure and diversification, but also for growth that will accelerate over 60 percent in the next year, and while much of the growth is driven by the tech sector — where he worries about the bubble — the growth rate excluding technology is over 20 percent, which should generate strong returns moving forward, even as the building bubble deflates.
Dawn Wotapka, former director of strategic communications and media relations at Honeywell, talks about what it's like to lose a job in an economy that is near full employment but artificial intelligence is making the employment picture murkier. Wotapka, a former Wall Street Journal reporter, recently wrote a piece on LinkedIn on going through a job loss that's been longer than expected from when the layoffs were announced, and how she has made it that her story was not the classic "It's a depression when you lose your job" tale.
Plus, Chuck responds to a listener's question about a recent interview that suggested that investors have no reason to hold bonds, and how his own opinion differs from the expert who was on the show, but not by as much as the long-time listener who wrote the question might think.

Brad Neuman, director of market strategy at Alger,  says the market is wrapping up "one of the strongest earnings seasons in history," which has created "incredible metrics" creating the impression that the market has gotten overvalued while he thinks that stocks haven't been able to keep up with earnings, which actually makes current valuations more attractive even as the market flirts with record highs. Neuman says he is not particularly worried about inflation, because he thinks A.I.-driven productivity gains will offset higher prices, but he notes that with artificial intelligence being "as significant to the human race as fire or electricity" there is the potential for a bubble, but he doesn't see that happening until 2028 at the earliest.
David Trainer, president at New Constructs, calls out trouble in stocks he labels as "five-alarm cash fires," companies that are burning so much cash to keep pace in the artificial-intelligence race that — without an influx of capital — they will soon run out of cash and be forced to dilute investors' holdings to get more. He says the problem is that big-name stocks like Oracle and Amazon.com are now priced as if they will be winners in the A.I. arms race, and they are spending as if they have won the competition, when he considers it very unclear as to just who will be the ultimate victors in the A.I. revolution.
In "The Week That Is," Vijay Marolia, chief investment officer at Regal Point Capital, discusses the upcoming earnings reports for WalMart and Target, which he expects to be a better measure of ongoing consumer confidence than any survey results, showing that consumers have not curtailed spending despite inflation concerns. He also discusses Goldman Sachs' big move into the ETF space, and how he feels about the national debt for the United States hitting $40 trillion — a mark it is expected to reach by the end of the month — and whether it impacts his view on government bonds.