3EDGE's Cucchiaro: 'Market melt-up' will lead to an avalanche in stock prices

Economist Dave Rosenberg, president of Rosenberg Research, says that his preferred indicators on economic growth are showing a slowing economy, where "the recession may already be starting." He acknowledges that the stock market "hasn't figured this out," but he says — based on the way Treasuries are trading — that the bond market has already figured it out. Rosenberg says that the market has "been in a bubble environment for many, many months," but that it can continue to inflate without popping for a while. "You're investing in an environment where the wind is in your face," he says, "it's not at your back." For a decade now, Chuck has offered the trick-or-treaters in his neighborhood a chance to pick cash or candy, and the opportunity to make a trade to try to get a bigger treat. It's his way of teaching basic financial decision-making, where children must consider if the financial prize is worth more to them because it's different and more useful than candy. The game changes in small ways each year, and Chuck is unveiling a new "second chance" option that actually would be a really bad choice for the children. Chuck also talks about how you can do your own scaled-down version of cash-or-candy in your home. Discount-capture investor Rob Shaker, portfolio manager at Shaker Financial Services, says that he's "not seeing anything in the closed-end fund space that would point to any type of bubble conditions," but instead sees generic, seasonal discount-widening caused by the start of year-end tax selling. Still, he says investors should make sure they are comfortable that they can weather those flurries "and readjust to the better things that are on sale and then double-collect on the way up."  Plus Jon Stubbs, analyst at Clever Real Estate talks about the housing market as measured by trends in national statistics, which have shown that homes are now on the market for longer than during the summer, with median home values up slightly but median sale prices up more, suggesting that investors are paying a premium to make a deal now.

Steve Cucchiaro, chief investment officer at 3EDGE Asset Management, says we're in a "market melt-up," the last phase of a rally or bubble that creates a buying climax, but that typically ends with trouble. Cucchiaro says valuations are in one of the three greatest periods of overvaluation they have seen in the last century, making them more dangerous than investors expect. As a result, he is holding more in international stocks than domestic issues and is ramping up gold holdings to 10 to 15 percent of the typical client's portfolio.  David Ellison, portfolio manager and financial services specialist for the Hennessy Funds, says he worries that "The market is becoming the economy," where a big decline in markets could drag the broader economy into a deep recession. Ellison likes the positioning of the financial services industry, but he questions both the popularity and impact of rate cuts, noting that from current levels rate reductions might not be good or healthy for the economy. In honor of Halloween, Todd Rosenbluth, head of research at VettaFi, makes a scary fund — a leveraged bullish daily play on a specific sector — his ETF of the Week, noting that these kinds of specialized funds really only work for investors who will oversee their portfolio constantly to make sure that they don't get burned by the "hot sauce" they're adding to their holdings.

Andy Wells, chief investment officer at Sanjac Alpha, says the market is in uncharted territory, but that's not just about record highs, but also because the Federal Reserve is in a position where it will be cutting rates with the market at highs and with the underlying conditions suggesting that a cut isn't warranted or necessary. Making cuts will appease the market, but it may lead to a steeper yield curve, which has Wells concentrating on the short end of the curve to minimize duration risk. Wells says that nervous investors are right to think that the market can't rise forever, but it can keep going up for years, so the fear of missing out is as real as the concerns that the markets are topping and investors need to find a balance between the two. Brian Potts, founder of Goods Unite Us and the creator of the Democratic Large Cap Core ETF — The DEMZ fund — brings his take on "politically responsible investing" to the Market Call, a day after Hal Lambert of the Maga ETF was on the show. He'll talk about his fund's methodology -- and how the research could allow him to create a Republican counterpart to his current fund — and his take on some stocks will include some surprising agreement (and not surprising disagreements) with Lambert on a few names. Plus, Chuck answers a listener's question about dividend investing and why the benefits of regular payouts don't always translate to superior performance when compared to stocks that don't pay dividends.

Economist and University of Chicago professor Alex Imas discusses "The Winner's Curse: Behavioral Economics Anomalies, Then and Now," which he co-authored with Nobel Prize winning economist Richard Thaler, and talks about the common curses impacting consumers and investors. Imas covers loss aversion and how it drives investors to make bad decisions, how the "endowment effect" explains our cluttered basements and much more. In the first of two Market Call interviews this week that involve funds tied to political views, Hal Lambert, chief executive officer at Point Bridge Capital — creator of the MAGA ETF, Point Bridge America First — discusses the intersection of politics, investment philosophy and portfolio management and how he believes investors can participate in "politically responsible investing." Chip Lupo discusses WalletHub's 2025 Credit Card Debt Survey, which found that more than 40 percent of Americans are still paying off credit card debt from last fall, and roughly the same number say they can’t handle more credit card debt, which could be setting them up for a less-pleasant holiday shopping season.

James Cordier, chief executive officer at Alternative Options, discusses how the worst drought in Brazil in the last century has coffee stockpiles at their lowest levels in over a decade, driving up costs for every consumer who needs their caffeine fix before they start work in the morning. Cordier, a long-time commodity trader, says that supply-and-demand imbalances are impacting a number of commodities — but most notably coffee and cocoa now — and says it is the commodity issues rather than tariffs that have driven most of the price hikes. At the same time, Cordier says that central bankers around the world have been buying gold at a frantic pace, pushing the price to record levels but leaving plenty of room for it to go significantly higher from here. Harvard University professor John Campbell, co-author of "Fixed: Why Personal Finance is Broken and How to Make It Work for Everyone," discusses how the financial system benefits the wealthy and financially savvy while setting up ordinary consumers to make costly mistakes. The book looks at everything from credit and insurance to student loans and retirement products, and Campbell talks about what it will take for more people to get a fair shake from the financial services industry. Kyle Guske, investment analyst at New Constructs, dips into the mutual fund pool for this week's Danger Zone pick, singling out a mid-cap fund that has a decent track record based on past returns, but whose future may not be so bright. The problem, Guske says, is that the fund has loaded up on low-quality stocks, amping up the risk and the potential for an alarming turnaround.

Steven Grey, chief investment officer at Grey Value Management, says that inflated valuations have him making cash his favorite investment choice right now, noting that they can gain interest income while avoiding significant market risk while waiting for stock prices to blow off. The cash, Grey notes, not only will increase an investor's sleep factor, but it gives them the option to be buying when the rest of the market is selling. Grey says in the Market Call that his thinking also extends to the stocks he prefers right now, noting that he expects Berkshire Hathaway — notably holding a mountain of cash — to be a financial fortress that turns into a big positive when the money gets put to work when the market turns. John Cole Scott, president of CEF Advisors — the chairman of the Active Investment Company Alliance — discusses the changing landscape of business-development companies and the details he gleaned from attending the recent Eversheds BDC Roundtable, which focused on legislative and other issues that are creating challenges and opportunities for the industry. Ted Rossman, senior industry analyst at Bankrate.com, talks about his recent analysis of how inflation is impacting credit-card rewards, taking some of the shine off the perks and making it more important that consumers know the rules to get great value from their rewards cards.

Long-time financial journalist and markets observer Herb Greenberg, editor of Herb Greenberg's Red Flag Alerts, says that investor expectations have changed, based on markets where rapid gains seem easy. While he suggests that this mindset is not new — and notes that Wall Street always feeds the quacking ducks by giving them new ideas for how to capitalize on current events and trends — he says it is becoming harder for average investors to remember that a normal market is one that goes up slowly over time. He agrees with assessments that the market is in a bubble, but says investors should know to ride along but protect themselves. Todd Rosenbluth, head of research at VettaFi makes the rare move of revisiting a past ETF of the Week pick, singling out a T. Rowe Price actively managed bond fund for proving the point he was making about it roughly a year ago, when he previously selected it for attention. Plus Jeremy Keil, retirement planner at Keil Financial Partners, discusses his new book, "Retire Today: Create Your Retirement Master Plan In 5 Simple Steps," noting that achieving a comfortable retirement is less about the money and more about setting expectations and planning for them.  

Michael Green, chief strategist at Simplify Asset Management, says the stock market is inflating a bubble, but that it's really "a bubble on top of a bubble" in the artificial intelligence arena, where the stocks in the industry — but also those adjacent to the technology  are booming even though many have yet to prove a real ability to generate profits. Green is worried about slowing economic conditions and expects a recession to hit, barring some significant efforts by the government and/or central bankers --  in 2026. He says investors are overlooking opportunities in fixed income broadly and high-yield specifically, and he favors those areas over rushing into whatever has been popular for a while now.    Jacob Ayres-Thomson, chief executive of 3AI which is working with financial-services firms and index providers to bring artificial intelligence-driven new approaches to the market  discusses how  new technologies are changing the old ways of investing, but without eliminating them. He says that no AI-driven bot will ever replace the genius of a Warren Buffett, but it will help make ordinary market actions easier to forecast and, potentially, capture in an investment.    Michael Scordo, wealth management adviser at Park Avenue Capital, discusses the latest data released from the Northwestern Mutual 2025 Planning and Progress Study, which showed that Generation X — the middle child of the generations with its oldest members turning 60 this year — is particularly worried about its financial future. Many are going through sandwich-generation problems — still raising kids while aging parents now require care — and more than half think they won’t be financially prepared for retirement when the time comes.

Kathy Bostjancic, chief economist at Nationwide and the chair of the Outlook Survey for the National Association for Business Economics, says the latest survey, released Monday, showed higher expectations for economic growth for the rest of the year and into 2026, with GDP growth -- which had been pegged at roughly 1.3% -- now expected to grow by 1.8%. Bostjancic cautioned that the improved growth forecasts don't make for a frothy economy, but rather seem to reduce the chances of recession. She says that economists improved their outlook, largely because they were too pessimistic earlier this year as they forecast the impacts of tariffs and expected more of a drag on growth than we have seen in the last six months.  In the Market Call, hedge fund manager Nitin Sacheti of Papyrus Capital discusses his long/short approach to stocks, and how he hunts out "special situations" that he believes are poised for above-average growth. Sacheti is a "Tiger Cub," a disciple of Julian Robertson, a legendary hedge fund manager. Plus, Chuck answers a question from a listener who, like himself, has a new grandchild, but who has very different concerns because that baby has been diagnosed with Down Syndrome. Rich Yam, director of wealth strategy/wealth and tax planning at Wealthspire Advisors, helps Chuck examine the various considerations that a special-needs family should have, and how grandparents can provide real help for a lifetime.

Meb Faber, chief investment officer at the Cambria Funds, says that "extremely high valuations are a weight that's hard to overcome," and that the United States is currently "the most expensive country across the board." He notes that when a country ends the year with a price/earnings ratio above 40, the average future 10-year returns are zero. As a result, Faber is suggesting that investors diversify internationally, consider gold — which her describes as being "like your crazy cousin Eddie" coming to the family holiday party — and more. David Trainer, founder and president at New Constructs, says that companies can manipulate earnings numbers in ways that keep investors interested, but which make future earnings misses most likely, and he puts those stocks that are likely to miss earnings in "The Danger Zone." Trainer says that 72 members of the Standard & Poor's 500 are currently overstating earnings by 10 percent or more. Trainer singled out NRG Energy, which has street estimates of 35 cents per share, but which he says is more likely to generate 6 cents per share in profits. Chip Lupo discusses the 2025 Early Holiday Shopping Survey from WalletHub, which showed that nearly half of American consumers aren't waiting for Halloween to start their holiday shopping, but rather they will begin this month (if they haven't started already).