Mission accomplished, Yaruss says it's time for the Fed to cut rates

Emily Roland, co-chief investment strategist at John Hancock Investment Management thinks the current protracted economic cycle "will end the same way that almost every cycle has," with high interest rates triggering trouble before rate cuts and a downturn that resets the market and repositions it for growth. Roland is hopeful the economy can avoid a hard landing — and she notes that heightened government spending that has helped the current economy could keep it going longer — but says she is watching for when initial jobless claims start to rise, because that will be the signal to get defensive, and while she says it could happen soon, it could extend as far out as 2026. Justin Conway, vice president of investment partnerships at Calvert Impact talks about Community Investment Notes — and specifically the new Cut Carbon Notes — as a way of diversifying income while supporting underserved communities. Cassandra Happe discusses WalletHub's 2024 Credit Card Rewards Survey, which showed that more than 60 percent of Americans think that card bonuses encourage overspending, but where nearly 4 in 5 respondents said that higher inflation has made them more interested in earning credit-card rewards. Plus, Chuck answers a listener's question about the impact and benefits of diversifying into a fund that owns popular stocks when you already hold those companies through index funds.

Scott Ladner, chief investment officer at Horizon Investments, expects the market to start a new leg up and rally, but he notes that it has to go through a shake up and get to where rate cuts start before that uptick starts in earnest. Ladner notes he is "a whole lot more confident about the next six months than the next six weeks," noting that current conditions — with steady or falling interest rates and growth in earnings — "doesn't translate into bad markets." While those conditions don't always portend bull markets, those conditions do tend to drive markets higher. Jeffrey DeMaso, editor at The Independent Vanguard Adviser, discusses Vanguard PRIMECAP and PRIMECAP Core, two classic growth funds that were closed to new investors for 20 and 15 years respectively; Vanguard just re-opened the funds and DeMaso discusses who they are right for. Greg McBride of BankRate.com discusses the site's latest Emergency Savings Report, which showed that nearly 60 percent of Americans are uncomfortable with their level of emergency savings. Plus, in the Market Call, Wayne Thorp, head of research and analysis products at AAII talks about buying growth stocks now.

Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute, says the market will take a break of as much as 10 percent, and he is looking for that kind of setback before getting back to being fully invested. That said, he expects the economy to pivot out of slowdown mode and "into a more sustainable growth path, but probably not until later this year or early in 2025." David Trainer, founder/president of New Constructs, puts a popular consumer name into the Danger Zone, Jeff Lambert of Tiicker — a service that helps companies reward investors for participating in proxy votes — discusses the firm's recent survey which shows that more than three-quarters of investors might pay attention to and actually vote their proxies if there was a tangible benefit to getting it done. Plus, in the Market Call, Ed Shill, managing director at the Wealth Enhancement Group talks about how investors should go looking for individual stocks at times like now when the market is "overbought," and among his surprising picks for these times is troubled airplane maker Boeing, which he describes as an enormous bargain as it tries to regain lift after recent operational troubles.

Larry Adam, chief investment officer at Raymond James, says that summers tend to be more volatile and while the market has been up seven of the last eight summers, those gains have had to overcome significant drawdowns, and he thinks that pattern will repeat with an "overbought" market now. Adam still expects two rate cuts, which should avert a recession, although the economy will likely struggle and will be setting up a rougher year in 2025. Roxanna Islam, head of sector and industry research at VettaFi, discusses the benefits and flaws of applying rules-based investing to closed-end funds, noting that changes in the industry have forced changes on a rules-based index of the closed-end fund space that was created by VettaFi, and how that is impacting the holdings and asset allocation for investors choosing to use fund-of-funds rather than to build their own portfolio of individual closed-end issues. Rachel Perez discusses a study done for Preply.com which showed that financial management is one of the three areas where Americans most wish they could develop more personal discipline, and Vijay Marolia, chief investment officer at Regal Point Capital, brings his "five lens approach to stock research' to the Market Call.

Howard Yaruss, professor at New York University and author of "Understandable Economics,” says the Federal Reserve should "consider a small rate cut, as soon as possible," in part because the central bank has done a good job — as measured by certain inflation measures — in at least coming close to its target levels, but also because other central bankers around the globe have started to cut, and there could be some issues arising if U.S. monetary policy is out of sync with the rest of the world. Yaruss sees the economy mostly avoiding significant recession and downturn until at least 2025. Todd Rosenbluth, head of research at VettaFi, goes out the risk scale by picking a fund that targets junkier junk bonds as his "ETF of the Week," Cassandra Happe talks about the latest survey from WalletHub which showed that commuters and long drivers are more upset with inflation than consumers with large families and bigger grocery bills, who are more focused on rising food prices, plus Rob Spivey, director of research at Valens Research, talks stocks in the Market Call.

Dedicated value investor John Buckingham, editor of The Prudent Speculator and principal portfolio manager at Kovitz Investment Group, says that the long run of the Magnificent Seven has not made it impossible for value investors to hold some of them, noting that while the very hottest don't meet the definition of value, other tech giants like Alphabet and Meta Platforms are trading at levels that shouldn't scare the bargain hunters away. He discusses his buying and trimming strategy in the Market Call. Ebony Reed and Louise Story, co-authors of "Fifteen Cents on the Dollar: How Americans Made the Black-White Wealth Gap" discuss how Americans view wealth — and often confuse it for income — and how that it will take well over a century, barring legislative progress, to make any significant progress that levels the wealth field for all Americans. Plus, Rob Williams, managing director of financial planning at Charles Schwab discusses the firm's eighth annual Modern Wealth Survey, which showed that More than 60% of Americans feel they are in a better position to achieve their financial goals than the generations that came before them.

When Chuck turned 62 last week, he became eligible to claim Social Security benefits, and while he always expected to wait as long as possible before collecting, his own health history, his recent marriage and the passing of some friends of similar ages prompted him to revisit the entire Social Security claiming decision, because deciding when to claim benefits — and how much to let them grow or how to handle them if you take them early — may be the single most important financial decision most Americans ever make, with their financial well-being for the rest of their lives at stake. Nathaniel Popper, author of "The Trolls of Wall Street: How the Outcasts and Insurgents Are Hacking The Markets," discusses his new book and how the traders of meme stocks and the denizens of message boards have gotten better and smarter and have been learning from their mistakes in ways that older generations never really did, and how investing is a different game to the many young people who are getting into it earlier than ever before. Plus, David Trainer, founder and president at New Constructs flips things around this week, and puts a brand-name investment bank into the "Attractive Zone," noting that while many companies overstate earnings, this one has gone the other way, making it a bargain now.

Ron Sanchez, chief investment officer at Fiduciary Trust Company International, says that as the market settles into long-term grown and moderating inflation, it's a good environment for financial markets to broaden out, where he expects more normal relationships between domestic and international stocks and large-company and small-cap stocks. "The market is never about seven stocks or 10 stocks," Sanchez says, which is "a healthy reminder as we look ahead to make sure your portfolio is diversified ... and not to get too narrow." Speaking of diversification, in the Market Call, Kevin Rendino, chief executive officer at 180 Degree Capital talks about investing in micro-cap and small-cap stocks through the lens of an activist investor. And speaking of activist investors, The NAVigator segment features Rob Shaker, portfolio manager at Shaker Financial Services — who follows what he calls a "discount-capture" investment style in closed-end funds — discussing the moves that fund companies have made to enhance yields, narrow discounts and discourage activist investors, and describes them all as neutral or positive for investors, so long as they understand the impacts on income streams and total return. 

Tom McIntyre, president of McIntyre, Freedman & Flynn, says that "this obsession with Fed policy is misplaced," noting that government spending has helped prop up the economy and hidden weakness in the economy. He's concerned about "overall slippage" in the economy; as an investor who factors the news into his investment choices, McIntyre is staying away from retailers and most financial names, but is gravitating toward utilities and energy producers, as well as companies that are part of the artificial intelligence space without necessarily being the big players. Speaking of the Fed, JoAnne Bianco, investment strategist at BondBloxx, says that she sees real resilience in the U.S. economy, which is why it has rolled along while market expectations moved from multiple rate cuts this year to where it now expects just a single rate reduction. In this environment -- where Bianco is not expecting a significant uptick in defaults caused by high rates -- she likes credit the most among fixed-income opportunities.  Plus, Todd Rosenbluth, head of research at VettaFi picks a hedged-equity fund investing in Japan as his ETF of the Week.

Natalie Trevithick, head of investment grade corporate bonds at Payden & Rygel, says that companies prepared for the high-interest rate environment in advance, in ways that have allowed the bond market to avoid the rise in defaults that typically hits during rate hikes, but that also contributed to stronger economic growth, which has allowed inflation to be sticky without a lot of pain to the economy. It's part of why the inverted yield curve hasn't indicated a recession yet, and Trevithick thinks the Fed should be able to pull off a soft landing for the economy if it starts cutting late this year or potentially in 2025. Cassandra Happe discusses WalletHub's just-released 2024 Social Media Shopping Survey, which found that most consumers say social media is contributing to their bad spending habits and mistakes. JoAnne Feeney, partner and portfolio manager at Advisors Capital Management, brings her top-down approach to the Market Call.