Sit Invest's Doty expects 'complete mess' - and big opportunity - in Fed transition

Bryce Doty, senior portfolio manager at Sit Investment Associates, says that history has shown that nearly every new Federal Reserve chairman does "something dumb" when they first get the job. With Jerome Powell soon to be out as Fed chair, Doty says the central bank is in a tricky place, where it could make a cut before the change and have the next chairman come in anxious to cut further, making a policy mistake that hurts the market, but creates buying opportunities for investors willing to ride it out. He's not the only one on today's show fearful of a Fed mistake, as that is the nightmare scenario for Dustin Reid, chief investment strategist at Mackenzie Investments, who says in the Big Interview that the economy has gotten to a point where further moves forward may have some negative impacts, hurting credit markets, raising more potential for a downturn and recession and, generally, not providing the classic economic boosts that frequently drive the markets higher.  In the "Talking Technicals" interview, Gregory Harmon, president at Dragonfly Capital Management, says he is expecting a small-cap rally to lead the market higher into year-end, and he says that the large-cap stocks — as measured by the Standard & Poor's 500 — will follow suit, and that the question will be whether the tech-heavy Nasdaq Composite comes along for the ride. "Technicals are all pointing higher, earnings are doing fantastic," Harmon says, noting that it would take "an unexpected crisis" to derail the underlying trends pointing "strongly to the upside" right now. Plus, Chuck discusses a visit to the bank to grab some cash that was met with an unusual question from a teller, a query that he says is a reason why consumers may want to have more face-to-face relationships with financial advisers of all stripes, rather than doing everything online.

Dan Fuss, vice chairman at Loomis Sayles & Co., now 92 years old and having cemented a track record as one of the best bond fund managers ever, says he's not concerned about a recession because the economy is strong, and in some ways stronger than its ever been during his investing lifetime, but he also compares current times to the late 1930s, a period when geopolitics were dominating the global scene building up to World War II, and says that he is more concerned with those macro-level worries than he has been in his career. Fuss notes that the global scene is more important to what happens next with the U.S. economy than even what the Federal Reserve does, and he quells concerns over pressure on the Fed to cut rates by noting that "every president" wants the central bank to lower interest rates. Todd Rosenbluth, head of research at VettaFi, makes the Victory Shares Free Cash Flow Growth ETF his "ETF of the Week," noting that it's a relatively new fund focused on quality that has outperformed the market since its debut in 2024. Rosenbluth said the quality focus should give investors some calm if they continue to pursue growth in a market that he thinks will be facing increased volatility in 2026.    Plus, with the Federal Reserve cutting interest rates on Wednesday, Chuck weighs in on what he thinks might happen next and why he worries that interest rate cuts not only won't impact the market as they have in the past but have some potential to hurt the economy at least as much as they could help it if rate reductions continue in the future.

Ben McMillan, chief investment officer at IDX Advisors, says that "gold's run is not over," and while he thinks it could easily reach $5,000 an ounce in the short order, he says "It's not inconceivable that within the next half-decade, gold could be sitting at $10,000 an ounce." (Gold is currently trading at roughly $4,225 an ounce.) He also says he expects the Federal Reserve to reach a point in the next 12 to 24 months where it lives "with a new normal of inflation" and resets its target inflation rate to reflect different thinking, which will mean consumers and investors have to adjust to inflation rates running at 3 percent or higher for the foreseeable future.    Amanda Agati, chief investment officer at PNC Asset Management Group discusses the company's Christmas Price Index, which looks at the current cost of giving your true love all of the gifts from the "12 Days of Christmas." Thanks to higher prices with gold -- and the five golden rings -- it's no surprise that the rate of inflation shown in the company's 42nd annual holiday index is higher than inflation generally.    Plus, in a market that has been driven to near record levels on the strength of corporate earnings, Nick Raich, chief executive officer of The Earnings Scout, returns to the show for the first time since 2020, talking about his earnings-centric methodology and his expectations for continued earnings growth for the market.

Scott Brown, Chief Strategist at Brown Technical Insights, is wondering "if the market is sniffing out something," because he has seen a change in the last month on the sectors that are now leading the way forward, and it's not the same things that were leading just a few months ago. Brown notes that banks, transportation, global materials, steel and copper stocks are among the areas that now have taken market leadership, and he says that "there's real upside" to where they can drive the market close to a level of 7,000 on the Standard & Poor's 500 by year's end. A day after discussing the market broadly, Jeffrey Hirsch, editor of the Stock Traders Almanac, returns to the show to discuss the Almanac itself for 2026, noting how the old technology of an almanac still has a place in helping to shape forecasts and expectations because it is built on decades of data that remains relevant, even in a world seemingly dominated by the changing technologies of artificial intelligence. David Rosenstrock, director of investments and financial planning at Wharton Wealth Planning, discusses his approach to mutual funds and ETFs in the Market Call.

Jeffrey Hirsch, editor of the Stock Traders Almanac, says that artificial intelligence is creating a "super boom," because it's a "culturally-enabling, paradigm-shifting technology," which he says can drive the Dow Jones Industrial Average to 62,000 — up about 30% from current levels — in just a few years. Hirsch, also the chief executive of Hirsch Holdings, also discusses calendar and seasonal impacts on the market and how he expects a Santa Claus rally this year, but what it means if the market misses out. Vijay Marolia, chief investment officer at Regal Point Capital, debuts as Money Life's newest regular in a segment called "The Week That Is," which provides one takeway from the market and economic news of the week just finished, the thing to watch out for in the week ahead and one take looking further forward. This week, Vijay focuses on the Netflix-Warner Brothers Discovery deal, how precious metals will respond to a rate cut and move forward and what parents should consider about the new Trump Accounts saving for children. David Trainer, president at New Constructs, circles back on Lyft Inc., the rideshare company that he first singled out as it was in its IPO phase in 2019. The stock is up more than 70 percent year-to-date, but it has lost more than three-quarters of its value since it was launched. Trainer says this year's gains are simply setting up the next fall for a company that is burning cash and that carries a negative economic book value. Rachel Perez discusses the results of a survey done for Rula Health, which showed that 75% of Americans say the cost of holiday gifts stresses them out, but also stresses their budget, with the average American overspending their plan by $261.

Brandon Thurber, chief market strategist at Regions Asset Management, says climbing the proverbial wall of worry has "supercharged the market," making it hard "to find reasons to be anything less than positive and constructive for 2026." While he worries that the message could be that "The only thing you have to fear is fear itself" — and he describes in The Big Interview the real fears that he feels could blossom into problems — he doesn't expect conditions to change much from 2025, and is mostly encouraged about domestic and international markets. Ken Berman, strategist at Gorilla Trades, says that he'd be foolish to say that now is a great time to buy after three strong years, but he believes the path of least resistance for the market is to go higher, and that's what he thinks will carry the current rally well into the new year. Like Thurber, Berman says he wouldn't want to get in the way of the market right now, and makes it clear that while there are reasons to be nervous he "wouldn't want to be short here." John Cole Scott, president of CEF Advisors, looks at tax-loss selling season and whether it has started yet, noting that a few asset classes have largely been able to avoid situations where there will be widespread harvesting this year, while others — most notably business-development companies — may be poised for a lot of tax-driven reshuffling before year's end. Scott also answers some questions on the value of tax-loss harvesting if it means selling a fund you like, and how he recognizes yield traps and spots big discounts that are poor buying opportunities.

Joel Litman, founder/chief investment officer at Altimetry Research, says that investor worries about valuations are overblown because "good data" shows that current conditions are more like the mid-1990s — the middle of a bull market — than 2000 when the Internet bubble burst. He says in the Market Call that with real core earnings growing for a lot of companies, valuations are still reasonable, which is why he says current conditions make for a screaming bull market with several years where it can keep running before investors should get worried and nervous. Brad Neuman, senior vice president/director of market strategy for Alger, says in The Big Interview that if technology spending in artificial intelligence had been removed, the economy would have gone through a recession in the first half of the year, but that also means that a lot of the pressures from a downturn have passed. With the AI boom in "the very early innings," he sees the economy strengthening next year bringing the stock market to higher levels with it. Todd Rosenbluth, head of research at VettaFi, makes a tactical play with a new, actively managed corporate bond fund from a brand-name money manager as his ETF of the Week.

Steve Rick, chief economist at TruStage, says he expects inflation to rise to roughly 3.2 percent early in 2026, and says that increase — a long-awaited after-effect of tariffs — to mute the impact of interest rate cuts and other policies. Still, he stopped short of calling for a recession, noting that he thinks the market can overcome extremely high valuations to move forward modestly. He does think the economy may be moving into a period where it supports flat or slow growth for several years, but said it can avoid a crash or a bubble popping if it can avoid nightmare scenarios that he says currently look more hypothetical than threatening. Kerry Pechter, editor and publisher at Retirement Income Journal, discusses his recent piece on what he calls "The Private Credit Instability Hypothesis," which looks at how the growing popularity of private-credit investments could be setting up a future fall akin to the subprime mortgage situation that presaged the Great Financial Crisis. Pechter is concerned that insurance companies — buying private credit to generate higher returns on annuities — will wind up holding the bag on bad paper if there is a breakdown in private-credit markets, and he believes that private credit markets will keep expanding and experiencing more demand up until the point "when something breaks." Vicken Yegparian, executive vice president at Stack's Bowers Galleries, discusses the upcoming auction of an 1804 coin — considered to be "the king of the dollars" — that stunned coin collectors because it involves the 16th version of a coin where only 15 copies were known to exist. He explains how the coin was authenticated and why it may draw more than $5 million on the auction block.

Indrani De, head of global investment research at FTSE Russell, says that there are tailwinds in place — from currency fluctuations, valuations and geopolitical changes — that make developed markets outside of the United States look particularly promising for next year. She says in The Big Interview that correlations between domestic and international markets have been greatly reduced in the last two years, which raises the benefits of diversification, and she suggests that spreading money around will pay off in both returns and in lowering portfolio risk, particularly if spending and investing in artificial intelligence slows and stops masking other market weakness.  David Blanchett, head of retirement research at Prudential, discusses the firm's 2025 Global Retirement Pulse Survey, which showed that mass affluent investors around the world feel ready for retirement, but that — perhaps because of their wealth — they haven't actually taken action to ensure that they're properly prepared. This lack of preparation means they haven't secured dependable income for life, nor have they adequately protected their nest eggs against downturns and market changes. That study shows that many investors could use a financial blueprint, and today's show covers that idea too, with Jeff Panik, author of "Your Future Is Now: Your Blueprint for Solving Your Retirement Puzzle." In the Book Interview, he discusses how investors who have amassed money without a plan can implement one around and with the investments they have made, and that planning does not require a complete overhaul. But even as they start to plan, Panik says every investor needs to take a "Financial Life Inventory," which goes beyond calculating net worth to take a complete picture of a person's financial situation.

Sonia Fraher, head of cash management at Vanguard says that while nearly three-quarters of Americans say they will fall short of their saving and spending resolutions for this year, most are optimistic that they can pull off a "resolution rebound" in 2026. Vanguard's survey research showed that 84 percent of Americans expect to make a financial resolution for 2026, with building the emergency fund being the most common goal. In honor of the holidays, David Trainer of New Constructs revisits the Damger Zone pick he is most thankful for this year, due to its success as a short pick.  Rob Williams, managing director of financial planning for Charles Schwab, discusses the firm's research showing that two-thirds of Americans believe they must look beyond traditional investment products like stocks and bonds to further diversify and succeed in today's market. More than 40 percent think the classic 60/40 portfolio is outdated. Plus, Jake Cousineau, author of "Face Your Financial Fears: The Simple Guide to Fixing Your Relationship with Money," discusses how Americans grow up surrounded by money misconceptions that they must overcome to reach their goals.