Money Life with Chuck Jaffe

Dec Mullarkey, head of investment strategy and asset allocation at SLC Management, says that earnings are strong and should keep the stock market rolling, but that signs of weakness shown by the bond market and concerns about how the war in Iran is impacting oil are going to be limiting factors. Mullarkey worries that a longer conflict could turn oil into a global crisis, where rationing and other measures could create more severe and long-lasting economic troubles. If, however, the situation can be resolved quickly, Mullarkey says the shadows over hanging the market should clear quickly, providing a real boost going forward.
In "The Week That Is," Vijay Marolia, chief investment officer at Regal Point Capital, looks at the bond market's sell-off from the end of last week, and while investors can cheer bond yields reaching their year-to-date high, he notes that higher rates could stunt economic growth and hurt the stock market's trajectory. The big thing he expects to impact markets in the week ahead, however, is Nvidia earnings on Wednesday, where he is expecting gonzo numbers but a disappointed market response, simply because investor expectations are sky high. Plus, he discusses community protests over data centers, noting that there are economic consequences buried under the headlines, as limiting data center growth could curtail capital expenditures by tech companies and limit the speed with which artificial intelligence can reach its potential.
Plus, David Trainer, founder and president at New Constructs puts Shake Shack back in the Danger Zone, noting that the stock — which currently trades in the $60 range after being as high as $144 in the last year — has a negative book value, and is using accounting measures that are clear signs of trouble.

Carley Garner, senior commodity strategist at DeCarley Trading, says the stock market looks unbalanced to her, with the current rally built around mechanical issues, like an explosion of option sales that impact market performance. She is expecting a pullback, and says things could get ugly — with the Standard & Poor's potentially losing at least 1,500 points, — about 2,000 points — which is why she has moved an overweight part of her own portfolio into Treasuries. She sounds a note for caution during the conversation, noting that "Markets are unforgiving in the short run, but in the long run they are very forgiving. Almost always, you will get an opportunity — it might be months or years down the road — to get back at a price that is reasonable and something you are comfortable with, as opposed to chasing it."
Veteran market observer Nick Sargen, a regular contributor to The Hill, returns to The Big Interview to discuss the updated version of his book, "Global Shocks: An Investment Guide for Turbulent Markets." Sargen says the market is going through a lot of events — from the war in Iran to the fighting in ukraine, and more, but these events haven't had the historical impact on the market expected by these shocking events because artificial-intelligence spending has been so big that it just keeps the market powering along. "The optimism over A.I. in the stock market is having more impact on investors than the pessimism that consumers are currently feeling."
John Cole Scott, president of CEF Advisors and the chairman of the Active Investment Company Alliance, returns to the show to discuss how recent troubles in business-development companies created a haves and have nots" among BDCs, with the ones that have exposure to software loans suffering and struggling while the ones that aren't in software represent a strong opportunity to get double-digit yields and solid returns on equity.

Ross Mayfield, investment strategist at Baird, says that the Federal Reserve "is going to be very hard pressed to find a reason to cut [rates] here," and he thinks that if the central bank does have to make rate reductions down the road, "it won't be for reasons investors would be excited about." Mayfield says he remains bullish, noting that "a consolidation period is probably in order," setting up a volatile summer setting up a continuation of the bull market later in the year, barring any sort of exogenous shock. And speaking of shocks, Mayfield addresses what he sees as building signs of a market bubble, and while he says they bear watching, he is not expecting that kind of action to result from current conditions.
Todd Rosenbluth, head of research at VettaFi, makes Roundhill Memory — a brand-new fund that has raked in billions of dollars in assets in just weeks since it opened — his "ETF of the Week," noting that the fund has gotten off to a gangbusters start but that the fund's focus on just a few hot stocks should have investors concerned about whether it's a flash in the pan or here to last.
Will Rhind, chief executive officer at GraniteShares, returns to the Market Call, and focuses largely on business-development companies, which got hammered due to software lending in March, rebounded sharply in April but remain unloved by the market today. GraniteShares' HIPS U.S. High Income ETF invests largely in BDCs and closed-end funds; Rhind outlines the current yield outlook in that space and for master limited partnerships.

Simeon Hyman, global investment strategist at ProShares, says that we have "had the most stunning earnings season in pretty much anybody's recollection," exceeding expectations and making it that the market is more focused on the earnings story than anything else, including bad news about war, inflation and more. He sees that trend continuing, even if inflation rises or stays sticky, until or unless it bumps into a recession, which he sees as unlikely. Hyman also discusses ProShares' new ETF based on the S&P 500 Buyback Aristocrats Index, and how that fund and a sister dividend aristocrats fund can be used to add consistency to a portfolio for investors who fear the bad news. He also discusses why he is overweighting small-cap now, seeing it returning to its historic role of providing above-average market returns.
Rachel Perez discusses Choice Mutual's 7th annual Funeral Preferences Survey, which found that nearly one in five Americans have no financial plan whatsoever for their funeral, leaving family or friends to shoulder the burden, which averages in the $8,000 range but which can easily be double or triple that cost. 
In the Market Call, Wayne Thorp, chief executive officer at BetterInvesting — which is part of the National Association of Investors — brings the well-developed principles of the group's Stock Selection Guide to look for high-quality growth companies that can be held for the long term.

Andy Wells, chief investment officer at Sanjac Alpha, says he expects the stock market to continue on its positive roll and wouldn't be surprised if it's up by about 6% from current levels over the next six months, but he also says that investors should expect interest rates to go up this year — even as he thinks the Federal Reserve will look to make a cut — because there is so much incoming bond supply driven by the artificial-intelligence boom and the need to fund A.I. projects. Further, Wells says that investors' bond funds are becoming "a tech bet" as the market changes and tries to absorb the massive funding needs behind new technologies.
Matt Harris, chief investment officer at The Hausberg Group, says the current trend can drive the market higher, though the trend would need more breadth and participation to generate more optimism. He says investors should be using volatility to their advantage, especially in areas where consumer sentiment is weak, to buy into sectors that are on sale. Specifically, he is looking for alternative ways to play artificial intelligence, such as with energy companies and other adjacent industries. 
Martha Moore, chief economist for the American Chemistry Council and survey chair for the National Association for Business Economics discusses NABE's latest Business Conditions Survey, released Monday, which showed that corporate economists see shrinking profit margins and, as a result, higher prices being passed along to consumers, which could keep inflation higher for longer. Despite that, the economists remain modestly positive on the next calendar quarter.
Plus, Chuck answers a listener's question about how to view a portfolio that just set a personal peak, but that is overloaded with growth stock funds.