Trillium's Smith sees a comeuppance for the market, economy, likely in '27

Brandon Thurber, chief market strategist at Regions Asset Management, says that despite a prevailing sense of nervousness, the market can remain on its upswing, and is likely to see a pickup after mid-term elections and lasting at least through the first quarter of 2027. With interest rates on the rise, Thurber says the market's potential for growth hinges largely on the power of earnings, but he notes that earnings estimates are surprisingly stable, which should set up a constructive tailwind for the market. In addition, while he acknowledges the market's concern over rising bond yields, he says the reason for those increases is crucial, because if strong economic growth is driving rates up, "that continues to be a fairly constructive backdrop for risk assets." Legendary technical analyst Martin Pring of Pring Research, says the statistics suggest that "the economy down the road will look pretty nice," leading to "an expanded expansion" that can continue while rates are rising. Pring, who has published Intermarket Review since 1984, says that the economy is currently in "Stage Four of the cycle, when bonds are bearish, commodities are bullish and stocks are bullish." He expects the Fed's recent hikes to be the first of as many as six increases over the next year-plus, noting that creating a recession is how he expects central bankers to break inflation. Until that happens, however, he notes that "Trend trumps everything," and he will continue to be invested while the bull market remains intact. Nathan Shetty, chief investment officer at SEI, says that alternative investments have been de-emphasized by the media and investors amid the raging success of traditional equities, but says that sticky inflation and unpredictable interest rates are creating opportunities for investors to use alternatives to complement equity strategies, mitigate risk and achieve true diversification. Shetty notes that as he watches current market trends, he is "not anti-A.I., but pro-productivity," looking past the A.I. eco-system to the businesses that benefit from the evolving technology.

Talley Leger, chief market strategist at The Wealth Consulting Group, says he sees the stock market rallying into the first quarter of 2027, noting that "earnings drive stocks and rates make noise." At that point, Leger expects the Standard & Poor's 500 to hit the 8,500 target he set on it during a Money Life interview last January, slightly behind schedule but still reflective of a strong, continuing uptrend. Leger encourages investors to ignore the market's noise, which includes concerns over valuations, because while valuations help investors set expectations for what can be achieved, they do not put limits on how high things can go and whether they can push further from here. He says the current valuations are "robbing Peter to pay Paul," but he says that won't become a problem for well over a decade, because the boom in earnings will roll on. Leger explains that a lot of the warning signs investors are seeing right now are part of the "typical business cycle dynamic," and he expects the market to broaden out for the next few quarters and years. Paul Benda, executive vice president for risk, fraud and cybersecurity for the American Bankers Association, discusses how consumers can protect themselves against consumer scams and check fraud. The trade group currently has stepped up its "Banks Never Ask That" campaign to help consumers recognize when scammers — armed with a convincing amount of information — are setting the hook and getting individuals to take the bait and provide details or more that could lead directly to being ripped off. Plus, Massy Williams, head of wealth management at Vanguard discusses the results from its latest "Women & Wealth" study, which digs into four key myths about how women handle money, showing that the stereotypical ideas that women lack financial confidence, delay decisions out of fear, wanting empathy above expertise and more are outdated and incorrect.

Jordan Rizzuto, managing partner at GammaRoad Capital Partners — which uses quantitative analysis of market risk through trends, economic expansion and consumer sentiment — says that the stock market's return to record highs on narrow breadth is "indicative of what you see with a market that has already sold off materially or a market that is loading up for fuel for another leg higher." Since the market has not sold off, Rizzuto believes the extreme consumer pessimism right now could power the market through the "wider band of uncertainty" it is facing to reach higher highs. He says that having trends and economic expansion factors staying positive while consumer sentiment is negative creates the kind of divergence that can set up moves in either direction that could surprise investors. Maria Melchor, the founder of FirstGenLiving -- a site that provides financial education tailored to the experience of first-generation immigrants, students and professionals in the United States -- discusses her recent book, "Always Have Enough: How to Build Wealth When You Don't Come from Money," and how many people have to overcome cultural and familial issues beyond simply learning the right ways to handle money before they can become financially successful. Plus, Stan Haithcock — best known as "Stan the Annuity Man" — returns to the show to answer listener questions. He helps one listener who is deciding if they should keep and take a pension, or if they should convert it to a lump-sum distribution, and the timing of when to start taking the pension and Social Security, and another whose employer, as a result of recent law/rule changes,  is adding annuities to its retirement-savings plans.

Steve Rick, chief economist at TruStage, is forecasting slightly faster economic growth for 2027 — 2.2% real GDP growth compared to about 2% this year —  "so nothing great ... good, but nothing to write home about." That should be enough to keep the economy moving forward, and Rick cautions against reading too much into some negative numbers, noting that unemployment levels reflect the classic level for full employment, and that slow job growth is appropriate given workforce trends in the United States. Rick does worry how a stretched consumer could curtail spending to increase savings, which would slow the economy; if that is coupled with a stock market suffering a sell-off due to high valuations and A.I.-related tensions, that could end the bull market and economic expansion in one disappointing turn. In the Money Life Market Call, Wasif Latif, president and chief investment officer at Sarmaya Partners — which manages the Sarmaya Thematic ETF — discusses what he sees as an ongoing commodities "super cycle" and how that has him leaning into gold, but also oil and other physical commodities, all the while largely avoiding a lot of the technology sector and getting his artificial-intelligence exposure from A.I.-adjacent plays like energy companies. Plus, Chuck answers a question from a listener who is eligible for Social Security but hasn't taken it yet, and who is nervous about getting their money but hearing from a financial adviser that they should wait until age 70 to start collecting. Chuck's suggestion for what the listener should do goes against conventional wisdom — and is different from what he says he and Gail will do when it comes to collecting Social Security — but that's because there's no right or wrong in the decision, only what is right for each individual who has to make the choice.

David Trainer, founder and president at New Constructs, put a pre-IPO Anthropic in The Danger Zone today, saying the $2 trillion valuation is "absolutely absurd" for a business that is burning tons of cash, facing vicious competition and "with no conceivable profit margin ... when it's being valued as if it will have profits bigger than the most profitable companies in the world today." He says Wall Street is using Anthropic's IPO as "exit liquidity" to cash out on the money they've invested privately in the company, but the deal is shifting the bag and pushing the trouble down the road, making it "an absolute rip-off for public investors." Trainer last used the "most ridiculous IPO" tag in 2019, on WeWork, where his research helped to scrap the launch; the company dropped its value, went public raising much less money through an acquisition and, ultimately, went to zero. Trainer says Anthropic's lack of earnings could be just as problematic.  In "The Week That Is," Vijay Marolia, chief investment officer at Regal Point Capital, addresses Micron Technologies stock, which Wall Street has been wavering on despite its  latest quarterly earnings showing year-over-year growth of 1,000 percent (yes, that's real). With skepticism driving Micron's price/earnings ratio below 15 — more than 40 percent lower than the p/e for the S&P 500 — Marolia uses his firm's five-lens approach to break down why he thinks the market is making the wrong call on one of its true stars. Marolia also digs into the job numbers and warns about reading falling jobs numbers and rising unemployment as a sign of recession when the economy is still growing and the unemployment rate has not climbed out of a level that traditionally has represented "full employment." Plus, he discusses the pluses and minuses of a recent SEC proposal that would let mutual funds charge performance fees, bringing more types of investments to the general public, but with a new level/structure for fees. In the Market Call, David Rosenstrock, director of investments and financial planning at Wharton Wealth Planning, talks about exchange-traded funds and putting them together in portfolios, noting that "the biggest risk [to investors] isn't the economy or market risk or inflationary risk, the biggest risk is that the portfolio is not properly aligned with the owner's goals and needs."

Steve Cucchiaro, chief executive and chief investment officer at 3Edge Asset Management, says that the market is masking potential troubles, flirting with record highs despite having "more than 85% of the S&P 500 companies in bear markets." As a result, he says investors need to b e prepared to get defensive, riding with the "short-term factors that are propelling the market higher" without losing sight of long-term factors that are likely to slow the market. Cucchiaro says that the price-to-sales ratio today is at an all-time high by a wide margin; while this doesn't say when a correction or crash is coming, it does suggest that when a correction comes "the amount that we are at risk is very severe." He says, as a result, long-term buy-and-hold will be very uncomfortable for investors who try to ride it out without getting defensive. Anthropic's initial public offering could value the company at over $2 trillion, so John Cole Scott, president of CEF Advisors, looks at how investors can buy pre-IPO stakes using closed-end funds, interval funds and ETFs that work in the private markets, and says that getting exposure to Anthropic and other popular IPOs isn't the hard part, paying for the right wrapper is. Scott evaluates several funds of different structures to show what investors are buying, what they're paying per dollar of private exposure and why they need an exit strategy before they get in. He also discusses which fund and structure he would use for clients, and why some investors with different goals might make another choice. In the Market Call, Jeff Auxier president of Auxier Asset Management and manager of the Auxier Focus Fund, talks value investing and says "the shopping list is growing," though he is expecting and hoping for "rougher, better times" and at least a modest downturn to make more stocks attractive. Auxier notes that in times when he foresees some trouble, he's looking for stocks with earnings "strong enough to be tennis balls" – bouncing through downturns – rather than "chicken eggs," which fall and splat.

Cheryl Smith, economist at Trillium Asset Management, says she is seeing "more economic warning signs," and worries that one of them — interest rates going up, but much later than might have been anticipated based on headlines — could be setting up a compressed timeline for increases, with the rapidity of the move creating more problems than would have surfaced in a slower uptrend. On the stock market, Smith says the rising interest rates will have an impact that, coupled with slower earnings and turns in the artificial-intelligence market make it that "You will see a considerably more difficult path for equities in 2027." In the Market Call, Eric Marshall, president of Hodges Capital Management and co-portfolio manager on three of the Hodges Funds, talks about bottoms-up stock-picking and the small-cap market . Plus, Stan Haithcock — best known as "Stan the Annuity Man" — returns to the show to answer questions, including one from a listener who is nervous about the stock market and looking to take some money out without losing the income stream that those dividends have been delivering.    

Kristian Kerr, head of macro strategy at LPL Financial, says that the market has shaken off the impact of higher oil prices, leading investors to a sense of complacency, where they think only a much higher spike in crude prices will upset the economy. He feels, however, that "the longer we are at these levels the harder it becomes to ignore," noting that the same kind of thinking can also be applied to rising bond yields, where the market is deciding just how real the fears are, but where they can't ignore the issue indefinitely. Kerr isn't calling for a major market reversal, but more for caution and diversification, because he believes that at some point many of the fears over headline risks will be realized. Author Daniel Goldie discusses his new book, out today, "The Retirement Answer: The 6 Key Decisions Every Retiree Needs to Make," which covers timing, Social Security , Medicare, distribution strategies, investments and legacy choices In the Market Call, Aniket Ullal, head of ETF data and analytics at CFRA, discusses exchange-traded funds, which sectors appear to be in favor now, the difficulties in evaluating newfangled funds with options overlays or leveraged, single-stock strategies and more.

John Kosar, chief market strategist at Asbury Research, says this is "one of the oddest markets" he's seen, with stocks nearly at record highs, two-decade highs in the yield of long-term Treasury bonds, a war, tariffs, oil priced at over $100 per barrel, and yet less stocks are making fresh highs and the Magnificent Seven stocks are carrying the load for the entire market. If the "big gorilla stocks" falter — which Kosar says is likely at some point — the market could topple like a Jenga tower. Kosar isn't out of stocks yet, but he's watching volatility and more, prepping to play defense soon. Josh Wein, portfolio manager at the Hennessy Funds, says that oil prices -- rather than Federal Reserve rate hikes — are "the big wildcard for the market" right now, noting that he expects the market to easily absorb the first two increases, and maybe more. One reason for that, Wein says, is that it's now earnings — rather than the Fed -- that are driving the market and investor sentiment. Wein, who manages 10 funds at Hennessy, says he expects a small rally as third-quarter earnings come out, getting better into the end of the year. Jeff Muhlenkamp, portfolio manager for the Muhlenkamp Fund, explains in the Market Call why his fund is holding a larger allocation to gold and gold miners than ever before in its long history, discusses valuation concerns around earnings and talks about why the "hold" decision is as important as the buys and sells.

David Trainer, founder and president at New Constructs has been cautious about artificial-intelligence stocks for a long time, noting that few of them pass his firm's rigorous evaluation criteria to be "attractive" investments, but he now says that liquidity concerns for the big-name A.I. players have him convinced that the market is in an A.I. bubble. That doesn't mean a crash is imminent — he notes that "Bubbles can go on for a long time" — but he says that once liquidity dries up, trouble will come quickly. Trainer says recent signs of shrinking liquidity include: delayed IPOs, "skyrocketing borrowing costs," a rapid rise in the cost of default credit swaps (which protect investors against default), " and a "risk-free rate" that's saying it's way more expensive to borrow. It adds up to a building problem that he says is closer to the edge, but is largely ignored in the other, more popular conversations about what's potentially wrong with A.I. Joanne Bianco, senior investment strategist at BondBloxx, says that the surge in Treasury yields to levels not seen in decades "is beyond most people's expectations," but she says higher rates haven't been scary yet because strong economic conditions have kept the market stable. That will persist for at least one more rate hike by the Federal Reserve — which the market already seems to be pricing in — but how she says it is less clear how the market will respond if there are more hikes down the line. She discusses the parts of the yield curve and risk spectrum she finds most attractive right now, given the rate picture, inflation and more. And — in an interview that goes in directions opposite to the others — Vijay Marolia, chief investment officer at Regal Point Capital, says he's not buying A.I. panic stories, noting that he believes they are mostly about the industry's powerbrokers trying to create "regulatory capture," using rules where the real purpose is to protect their current competitive advantages. He also discusses the sudden rise in bond yields and the potential risk that poses to bond fund investors, suggesting they'd be better off holding bonds directly, planning to capture the yield to maturity, and using a laddered approach so that higher-rate paper is routinely being added to the portfolio as rates climb. Plus, Vijay talks about the rise in 401(k) millionaires, and how it's more a phenomenon of market growth and inflation than a meaningful milestone, noting that savers should focus on their needs and whether their plan and savings level will get them to a level of sufficiency.