Portfolio Manager Insights | Weekly Investor Commentary – 8.10.22

Download the PDF here for the full commentary.

PORTFOLIO MANAGER INSIGHTS
WEEKLY INVESTOR COMMENTARY | 8.10.22
Investment Committee

As the economy slows, some investors are worried about the possibility of a recession as well as the long-term consequences of an ever-growing government debt. These concerns are timely due to recent economic data and policy decisions, including the Inflation Reduction Act making its way through Congress. While these are all important issues, investors should view them with the right perspective. Despite many economic, political and global concerns, the fact that the S&P 500, Dow and Nasdaq have gained 13%, 9.6% and 18.9% since mid-June, respectively, is a reminder that markets can rebound when it’s least expected. How should investors react to ongoing economic and policy concerns?

The recent jobs data for July show that the total number of jobs lost during the pandemic – about 22 million – have now been regained. This occurred in record time, requiring only two-and-a-half years. In contrast, the number of jobs lost in 2008 didn’t recover until 2014, or over six years later. This matters because the strength of the job market increases the odds of a so-called “soft-landing” in which growth remains healthy as the Fed raises rates, allowing inflation to ease and consumers and businesses to get back on track.


The overall job market has recovered but not all sectors are doing equally well

Of course, not all sectors have experienced a similar rebound which the chart above highlights. It’s not surprising that Leisure and Hospitality, which includes restaurants, bars, hotels, concert venues, and more, is still struggling after shrinking by half during the pandemic lockdowns. The number of government jobs has also declined across the local, state and federal levels. This is unlike sectors such as Information, Professional and Business Services, and Retail Trade, encompassing a wide variety of businesses including telecommunications, tech, consulting, and legal services, which mostly recovered by the second half of 2021.

Not only do the jobs data matter for the possibility of a recession, a strong economy is also one of the keys to maintaining fiscal balance when it comes to government deficits in the long run. This is especially important with the federal debt growing to over $30 trillion, or 124% of GDP. In this context, the Senate recently passed the Inflation Reduction Act along party lines. The bill has the stated goal of reducing the budget deficit and combating inflation. This is primarily done through provisions such as a 15% minimum tax rate on large corporations, drug pricing reforms, increased funding to the IRS to collect additional taxes, and spending on climate change.


The budget deficit remains large

Whether this can impact inflation in a meaningful way is a matter of debate. How the government taxes and spends is naturally a controversial topic that impacts the economy and markets in complex ways. At its core, budget deficits occur when the government spends more than it collects in taxes and other sources of revenue, which adds to the total debt. Even though tax revenues tend to increase as the economy grows (even without raising tax rates), they have been outpaced by spending over time.

The Congressional Budget Office (CBO), a non-partisan arm of Congress that conducts budgetary and economic analysis, recently published their annual long-term budget outlook (prior to the Inflation Reduction Act). During the pandemic, government spending ballooned to support the economy which added trillions of dollars to the national debt. This caused the deficit to spike to 15% of GDP in 2020 and 12% in 2021. With that spending behind us, the CBO projects that the deficit will improve to 3.9% of GDP in 2022.

However, the CBO also projects that the annual deficit will average 10% of GDP 20 years from now, in the 2043 to 2052 timeframe. By 2052, they project that net interest payments alone will rise to 7.2% of GDP. Thus, a common concern among investors is how this will impact the country’s ability to finance itself and how it might affect the economy. In its report, the CBO acknowledges and explores possibilities such as the federal government crowding out private investment, rising interest costs driving up interest payments to foreign Treasury holders, and more. Beyond these factors the report examines the potential risk of fiscal crises (last experienced in 2011), the erosion of confidence in the ability for the federal government to pay off its debts, and constraints on policymakers to implement policy.


Treasury securities are still primarily held by U.S. entities

All of this may come across as a lot of gloom and doom, especially for those who have worried about such issues for decades. However, it’s important to distinguish between what matters as citizens, voters and taxpayers, and what matters as long-term investors. As individuals, many have strong personal and political views on government spending and taxation, and what it may mean for the country over the coming generations. However, this can be distinct from whether deficits directly or indirectly impact the economy and markets, and more importantly, investment portfolios.

For example, even after the trillions of pandemic spending, about two-thirds of the national debt is held either by the U.S. government itself or by U.S. citizens. And while it’s true that rising deficits could make Treasuries less attractive in the future, hampering the government’s ability to roll its debt, there have not been signs of it yet. Even in 2011, when Standard & Poor’s downgraded the U.S. debt during the fiscal cliff standoff, investors didn’t sell their Treasuries – they rushed to buy more. Ironically, this is because U.S. debt securities are still the standard for stable, risk-free assets in the world.

Perhaps most importantly, markets have done well regardless of the exact level of government debt and taxes over the past century. As unintuitive as it might seem, the best time to invest over the past two decades has been when the deficit has been the worst. These periods represent times of economic crisis when the government is engaging in emergency spending, which tends to coincide with the worst points of the market. And while this may not be the most repeatable investment strategy, it does underscore the importance of not over-reacting to fiscal policy in one’s portfolio.

The bottom line? There are growing concerns as the economy slows. As citizens, voters and taxpayers, there is no more important task than helping to shape policy that benefits future generations. But as investors, it’s important to remember that markets can do well in a variety of environments. The market rebound of the past two months is a reminder to stay patient and invested.



Historical references do not assume that any prior market behavior will be duplicated. Past performance does not indicate future results. This material has been prepared by Kingsview Wealth Management, LLC. It is not, and should not, be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate their ability to invest for the long term. Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser. (2022)

3:00

Portfolio Manager Insights | Weekly Investor Commentary – 8.3.22

Download the PDF here for the full commentary.

PORTFOLIO MANAGER INSIGHTS
WEEKLY INVESTOR COMMENTARY | 8.3.22
Investment Committee

Last week’s report on the country’s Gross Domestic Product for the second quarter confirmed that the economy shrank in the first half of the year, a fact that some investors and economists had already suspected. Broad-based inflation, rising energy prices, higher interest rates and other factors were a drag on growth for the second consecutive quarter. And while the economy is still 1.6% larger compared to a year ago, even after adjusting for inflation, many are wondering whether we are now in a recession. With clear signs that growth has slowed, how should long-term investors react?

In many ways, the current investment environment may be one of the most challenging in years due to a variety of mixed signals. While analyzing economic data in the right context is always difficult, many of today’s market and economic factors can be interpreted as being either good and bad, depending on one’s perspective and priorities. For instance, another major event last week was the Fed raising rates by 75 basis points for the second time in as many meetings. While tighter monetary policy is usually a bad sign for the economy, major indices have rallied in response to the Fed combating inflation.


The economy shrank for the second consecutive quarter

Similarly, slower economic growth and an inverted yield curve would normally be negative for the stock market. However, growth that is only moderately slower, but that helps to ease supply and demand pressures on inflation, can be positive. These data have pulled the 10-year Treasury yield back to around 2.65% from near 3% only a month ago, and many other interest rates, including mortgage rates, have fallen as well. Perhaps more interestingly, the S&P 500 rallied 9.1% in July and has rebounded 12.6% since the middle of June following the Fed meeting that month.

This is another reminder to long-term investors that markets can rebound when it’s least expected. In this context, there are a few ways in which investors can interpret the latest GDP numbers. First, does this mean that we’re in a recession? While some consider two consecutive quarters of negative growth to be a recession, sometimes referred to as a “technical recession,” the official definition from the National Bureau of Economic Research is more nuanced and considers a variety of data beyond GDP.

Although growth is negative, many other indicators, especially within the labor market, are still quite strong. Over 1.1 million net new jobs were created during the second quarter, bringing the year-to-date total to 2.7 million jobs. There are still 11.3 million job openings, near the historic peak, which suggests that many companies would still like to hire and expand. So, while some investors and the news media may enjoy debating the meaning of the term “recession,” such strong job dynamics are not consistent with historical economic contractions.

Second, it’s also important to keep the negative growth rates of the first half of the year in perspective. While the first and second quarters shrank by 1.6% and 0.9%, respectively, these are small declines compared to historical recessions. In fact, the chart above shows that these are some of the smallest on record and are dwarfed by the recessions of 2020, 2008, and others. This chart also highlights how many more positive quarters there have been over the past 75 years compared to negative ones, even though the latter are what garner most of the attention.


Business investment and inventories were drags on GDP in Q2

It’s also important to keep in mind that the numbers are reported as annual rates. Thus, what 0.9% means is that the economy would have shrunk by this amount had the same trends continued for a full year. In reality, the economy only shrank by a quarter of this amount. Additionally, the GDP numbers are calculated to be in “real” terms, i.e. they subtract the effects of inflation. In “nominal” terms, i.e. with inflationary trends, GDP actually grew by 6.6% in the first quarter and 7.8% in the second quarter.

Third, while there were slowdowns across the board, including in consumer spending, the biggest detractor in the second quarter was a drop in private inventories among businesses. An important component of the business cycle is the inventory cycle since businesses don’t simply produce everything “just-in-time.” Instead, they need to anticipate future demand and may accumulate inventory. When businesses build up inventories, this boosts economic growth in those quarters at the expense of future periods when they draw down those inventories.

This is exactly what happened in the second quarter. In contrast, the second half of last year experienced a strong build-up of inventories which contributed 2.2 and 5.3 percentage points of GDP growth in Q3 and Q4 2021, respectively, as businesses anticipated high demand. The chart above shows that “Gross Domestic Private Investment” detracted from GDP in Q2, and the biggest contributor of that was a two percentage point decrease from private inventories.


The market has rallied significantly since mid-June

None of this discussion is meant to make excuses for a slowing economy. However, it does underscore the importance of not focusing on any individual economic report or trying to time the market based on these numbers. The fact that the S&P 500 has bounced off of bear market levels, despite all of these seemingly negative events, suggests that there can be many ways to interpret these data. At the moment, the market appears to be most focused on fighting inflation. If price pressures do begin to ease later this year, this could be taken as a positive sign.

The bottom line? Investors ought to maintain a broad perspective and not focus too much on any particular data point. Staying diversified while also properly positioning to take advantage of an eventual recovery are the best ways investors can increase their odds of financial success.



Historical references do not assume that any prior market behavior will be duplicated. Past performance does not indicate future results. This material has been prepared by Kingsview Wealth Management, LLC. It is not, and should not, be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate their ability to invest for the long term. Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser. (2022)

3:00

SVP Paul Nolte Quoted On Yahoo Finance 7.29.22

Kingsview SVP Paul Nolte discusses warnings from major retailers and consumer strength.

Read the full article here: Yahoo Finance

3:00

Kingsview Partners Welcomes Partner | Wealth Manager Zak Knable

Former Wells Fargo Advisor Opens Kingsview Partners Office in West Chester, PA

Kingsview Partners is excited to welcome Partner and Wealth Manager Zak Knable, who today opened the firm’s newest office in West Chester, Pennsylvania. Zak comes to Kingsview from Wells Fargo with seven years of advisory experience.

After graduating from Penn State Abington with a Bachelor’s in Business Marketing and Management, Zak began working in the financial industry as a banker, becoming a financial advisor in 2015. He believes that trust is a cornerstone in his client relationships and always encourages an open dialogue.

His areas of focus include:

• Retirement Income Strategies
• Wealth Strategies
• Estate & Legacy Strategies
• Entrepreneurs & Business Owners
• Portfolio Reviews

“Kingsview is pleased to welcome Zak, with his focus on education and thoughtful, customized guidance, as a Partner and Wealth Manager,” says Chief Executive Officer Sean McGillivray. “Zak’s strong desire to elevate the standard of care for his clients continues to advance our goal of transforming the industry.”

Mr. Knable’s office address is 17 W Gay St.,Suite 103, West Chester, PA 19380. He can be contacted at (484) 202-7161 or zknable@kingsview.com.

1:00

Portfolio Manager Insights | Weekly Investor Commentary – 7.27.22

Download the PDF here for the full commentary.

PORTFOLIO MANAGER INSIGHTS
WEEKLY INVESTOR COMMENTARY | 7.27.22
Investment Committee

The Fed is caught between a rock and a hard place as it tries to balance historic inflation levels with a slowing economy. Many leading economic indicators suggest that growth is decelerating due to rising prices, geopolitical events, and the natural end to a strong recovery. This week’s Fed meeting and the GDP report for the second quarter will shed more light on how urgently the central bank will tackle inflation in light of these economic challenges. There are wide-ranging implications for investors, especially with the stock market at attractive levels. What do long-term investors need to know about the economic situation to position for an eventual recovery?

Typically, GDP reports are closely followed but entirely backward-looking since they reflect events that took place the previous quarter. GDP reports can shed light on the magnitude of the impacts on consumer, business and government spending, as well as trade activity. However, this week’s report will be scrutinized for another reason – whether or not it will be the second consecutive quarter of negative growth, which some consider to be a sign of a recession.


The money supply has grown significantly since 2020

The current consensus estimate among economists is that the economy grew about half of one percent in the second quarter. Even if this turns out to be wrong, this would not be unexpected given rising inflation. What is driving this inflation, how long it will last, and who is politically to blame are matters of heated debate.

One contentious area is around the money supply and whether this has driven prices higher across the economy. The chart above shows one measure of the money supply known as M2 which includes components such as U.S. currency, checking and savings accounts, and money market funds. This measure rose dramatically as the Fed responded to the pandemic.

However, unlike the cost of oil which has clearly driven gasoline prices higher for consumers and businesses, the jury is still out on the long-term effects of loose monetary policy. Historically, inflation has been worsened or prolonged by central bank errors. If there is too much money chasing the same amount or fewer goods and services, then the prices of those goods and services will rise.

But the supply of money isn’t the only factor here. The concept of the “velocity of money” matters too – it measures how many times each dollar flows through the system. If there are many more dollars, but they move through the system fewer times, then growth and inflation could remain the same. This is one reason that the stimulus after the crisis of 2008 never spurred inflation – velocity fell as banks held onto reserves and slowed their lending activities. This is also what we see over the recent period – the velocity of money has plummeted because nominal growth has not picked up faster than the growth in the money supply.


A stronger dollar naturally tightens economic conditions

All of this is fairly technical but there is a simple point: Fed actions affect the economy with a long lag and can often impact consumers and businesses in unexpected and indirect ways. For example, interest rate hikes have helped to strengthen the U.S. dollar, to the point that even the Euro is hovering around parity. This has two implications for inflation and growth.

First, a strong dollar is great news for American travelers and consumers buying foreign goods who will find that their currency goes much further. This naturally lowers inflation since the prices that consumers pay will decline. In theory, a stronger dollar and lowers oil prices, since the commodity is mostly denominated in U.S. dollars.

Second, a strong dollar also slows the economy somewhat since foreign buyers will find U.S. dollar-denominated products more expensive. This can also drive down inflation since there will be less demand for certain goods and services. Thus, a stronger dollar naturally tightens financial and economic conditions which may slow the economy, but perhaps more importantly combats inflation.


Leading indicators suggest the economy is slowing but in a controlled fashion

Of course, the challenge lies in the balance between battling inflation and preventing a deep recession. Fortunately, corporate earnings and consumer balance sheets continue to be robust which increases the hopes that any recession may be mild. Regardless of the exact outcome, markets have been preparing for the worst for some time. The S&P 500 is still hovering slightly above bear market levels, with valuations at their most attractive levels in years. Investors ought to take a long-term perspective and not focus too much on any one Fed meeting or GDP report.

The bottom line? Although inflation and growth are the biggest concerns for investors, it is still important to stay invested and diversified, especially given attractive market valuations.



Historical references do not assume that any prior market behavior will be duplicated. Past performance does not indicate future results. This material has been prepared by Kingsview Wealth Management, LLC. It is not, and should not, be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate their ability to invest for the long term. Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser. (2022)

3:00

SVP Paul Nolte Interviewed on WGN Radio 7.26.22

Paul Nolte, Senior VP at Kingsview Wealth Management, joined Bob Sirott to talk about the continued raising of rates, companies reporting earnings, and when the Fed could cut interest rates. He also explained why consumers aren’t spending as much.

Click here to listen to the interview.

7:23

Paul Nolte interviewed by London South East – 7.23.22

CSX Corp, which reported on Thursday, was also a strong gainer, on track for its biggest weekly gain since early March. Old Dominion, due to report July 27, and Kirby Corp, to report July 28, were also among the top gainers for the week so far.

Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago is “favorable” towards the sector right now, click here to learn why.

Click here to learn why.

7:23

CIO Scott Martin Interviewed on Fox News 7.22.22 – Making Money With Charles Payne

Kingsview CIO Scott Martin discusses the Fed rate hike philosophy, emotions in the market, and constructive stocks.

Program:  Making Money with Charles Payne
Date:  7/22/2022
Station:  Fox Business News
Time:  2:00PM

CHARLES PAYNE: I want to bring in Kingsley Wealth Management CIO along with Scott Martin rather and Surevest CEO Rob Luna. All right. Let’s start with this, pal pivot, guys. I mean, when does it happen, Scott?

SCOTT MARTIN: Soon, probably up to the next two meetings, Charles. Because as big of a hero to me, to that Bob Dole is. I don’t think it’s right, man. I think the recession is here. If you want to ask my percentage chances of recession. How’s 99% sound? We’re in one kids. And so the Fed knows that. And maybe they don’t. Maybe they want to wait on the GDP data for Q3, whatever. Look at input costs, Charles. Look at interest rates, open market interest rates, all dropping like a rock, sinking like a stone. Therefore, the Fed has a baked in the cake that they’re going to do a hike very soon with the July rates coming up, the July meeting after the rates on that and then obviously the next meeting in September and then dunzo, they’re going to hang out. So two more rate hikes and then we’re done with this hiking cycle.

PAYNE: You know, Rob, it would be like, Scott not to be really committed, right? Only 99%.

MARTIN: Saying there’s a chance. Charles.

PAYNE: There’s a chance. Listen. Yeah, the Fed’s wedded to that 75 basis points for a number of reasons, including credibility. But do you agree that after that or sometime really shortly they’re going to start to change their minds? Rob

ROB LUNA: Yeah, I think so. I don’t think it’s going to be as quickly though as people think. I mean, you remember back well, I don’t know that you remember you’re pretty young, Charles, but back in the seventies and you know, they’re looking at this data, this there’s the stop and go policy back then didn’t work and they needed to get unemployment all the way up to 10% before they were finally able to cripple inflation. So I don’t think they’re going to be as quick of changing their mind, but I do believe probably two, three more hikes than they’re going to stop. The language will start to change a little bit. But look, you know, I’m still in this camp, the minority camp, that we might have a soft landing. Look at American Express today. The high end consumers still doing well, reported great earnings. I don’t think this is going to be as bad as a lot of people think. But I do believe we are in a technical recession right now.

PAYNE: Now, the last time we spoke, both of you guys were what they call a Wall Street constructive, which means you were buying stocks and everyone else was afraid. Let me go back to you on this, Rob. Do you grapple with the idea like, okay, because I know I bought a few stocks in the last month and some of them popped. Right. And then you see names like Coinstar. I mean, Coinbase went up 60% beyond me. 60%. How do you handle if you start to nibble and then all of a sudden a name, you buy pops and you know, you want to hold it long term, it’s going to have to pull back a little bit and then maybe resume that move up. Do you take it off the table sooner rather than later or do you go ahead and let it back and feel a little bit?

LUNA: Yeah, it’s a great question. And I think for viewers out there, it’s about your time frame. If it was a trade, you got a huge pop in some of these ark names, Coinbase Roblox, you’re probably closing those out right here. But to your point, if it’s a long term position, what I do is just trim a little bit, take a little bit off the table. It was a 2 to 3% position. That’s now 4 to 5. Bring that back a little bit. Take a little bit. I do think, though, looking at the technicals, looking at what’s going on, this might not be just a bear market rally. It could be a bottoming process. So don’t get all out and wait on the sidelines because you can miss a big pop next week.

PAYNE: So while you guys are buying, like I said, 95% of my guess, most of Wall Street were selling or holding off. And now we’re starting to see big time short squeezes. Right. And in fact, during the same period that the S&P is up about 8% coming into today, the 50 highest shorted names were at more than 20%. And, you know, so, you know, Scott, I bring that up because you know, these names, they’re attractive down here on a risk reward basis, aren’t they? Because I’m looking at some of the names that you like. And, you know, I think the Best Buy is one, Ford is another. These names have been hit pretty good.

MARTIN: They’ve been crushed, man. I mean, they’ve been thrown out with the baby, the bathwater. And then, oh, by the way, for good measure, they threw out the bathtub as well and then burned the house down. So sometimes the data, the stocks look so ugly and so terrible, like some of my dates in high school. Whoops, they actually you need to buy them. You need to take them out. You need to take them for a ride. Because here’s the thing. Some of these stocks, Charles, just get caught up in this emotional swell, this emotional wave that drops point. You just got to kind of mitigate it and sometimes hold your nose and buy them. The ones we talked about two weeks ago on the market bro segment both of us amazing. I mean, last lam research, we talked about Kohl’s. We talked about Cleveland Cliffs. Even after a bad day today, boys and girls, those are still stocks that are constructive here because they’re way oversold. And oh, by the way, they’re cheap. So if anything improves, if the Fed does get out of the way, if the economy we do get a soft landing here, it’s a very shallow, short recession. When the economy comes back, these things will explode.

PAYNE: Yeah, there’s no doubt that these stocks and stocks in general are going to come back a long time before the recession is over. And Scott, you got to be careful with those zingers because you’re going to get me back in human resources. All right.

MARTIN: My phone’s been ringing. I know, man.

PAYNE: Already. Yeah, that buzzing in your office is from the third floor, wherever they are. Hey, really appreciate it. Good stuff. And like last time you guys were here, you made people a lot of money. Scott, Rob, appreciate it. And of course, folks, we’re going to stay in these markets throughout the.

4:52

CIO Scott Martin Interviewed on Fox News 7.21.22 Cavuto Coast to Coast Pt. 2

Kingsview CIO Scott Martin discusses a shift in cryptocurrency, the consumer impact of natural gas prices, and current wage growth.

Program:  Cavuto Coast to Coast
Date:  7/21/2022
Station:  Fox Business News
Time:  12:00PM

NEIL CAVUTO: All right. We’re about 14 50% through the earnings season here. You know, companies reporting on how much money they made or did not make in the second quarter. That’s seven out of ten are reporting numbers that were better than thought. Scott Martin was focusing on that in the last hour. And Scott, do you think about it? That trend continues. And of course, these were ratcheted down. So anything slightly better is more than slightly good for Wall Street, huh?

SCOTT MARTIN: Correct. As in relationships, Neil. Expectations, my friend. You can’t overpromise, but you can certainly under-deliver, I guess. And that’s happened to me. Obviously, personal story will leave the rest out of it. The companies aren’t, though, that out there that are very smart, Neil, that saw the turn down the economic data and let’s face it the markets some months ago and probably still we’re pretty emotional it was the sell first ask questions later environment companies saw the perfect opportunity with the lead block with a fullback going through the line of scrimmage to say, you know what, we’re going to we’re going to downgrade, we’re going to lower expectations again. So therefore, when the numbers come out, like we’ve seen with Tesla, Netflix and so forth this week, hey, the market’s rallying these stocks because we already know things are going to be bad. It’s the hopes of them getting better that we’re excited about.

CAVUTO: What about a lot of these cryptocurrencies? They’ve held up very well, especially with this latest news. You know, the Tesla’s unloaded a lot of this stuff. Are they having their day? Are they getting their footing now? Today is a kind of a weird day, I grant you, but still, week over week, not too shabby.

MARTIN: Very weird day. You’re right. But my goodness, Neil, I mean, look at Tesla stock today after they just talked about the huge impact billions that it had on the earnings report and similar to things like MicroStrategy, which is another company, has a heavy investment in Bitcoin Square as well. These stocks are hanging in there, to your point, stabilizing because and suddenly crypto is not so cool anymore. So they’re moving on from those those things. I mean, you have the thing that’s interesting, though, if you think about this whole Bitcoin craze and now the Bitcoin bust is this is really the last thing I’ll say on this is it seems really pervasive though and it’s not quite getting maybe the attention it needs just yet and maybe the fallout has not been totally felt. But my goodness, this reaches all the way to athletes and other people who have taken payments and other things in Bitcoin as, as, as lieu of money, actual cash like straight up US dollar, which suddenly people hated like three months ago and said buy bitcoin. Yet I don’t think the dollar is down 50% over that time. So it’s very interesting to see what the what the long lasting effects of these are going to be. But yes, it’s good to see some of the stocks that are involved in Bitcoin with a little bump in Bitcoin in the last few days go up, actually.

CAVUTO: Finally, real quickly, I mean, we’re talking so much on on gas prices in this country. And they’ve gone down 36, 37 days running. Natural gas prices certainly have not. They’re up about 50%. And right now, that was just over the last month, 10% yesterday. I don’t quite know how they’re doing today, but I am wondering whether that’s the unwritten story here, because that’s going to be a squeeze this winter. That continues.

MARTIN: For sure. And it already started to squeeze us last winter, too. I mean, gosh, you know, utility costs especially, you know, heating oil really went up. And so some of the things that I’m worried about is exactly that, because now what’s happening, Neal, with respect to kind of prices and they are coming down to some degree, certainly input costs, building costs coming down nicely. We’ve seen gas come down, as you mentioned, at least at the pump somewhat. The worry I have, though, is now we’ve got this turnover in the economy a bit, not the recession. Recession is already here. We all know that. I don’t care what Jared Bernstein says, I don’t care if the president says. But in this in the winter, Neil, that’s when the job maybe market may not be as strong. We may not be having such high wage growth as we have now, and the heating costs and all those things are going to still be there for us. And that’s something that’s going to be a struggle for Americans.

CAVUTO: All right. Thank you, my friend. Whatever the relationship, it’s got a sound one with us. We appreciate it. Scott Martin, Kingsview Asset Management CIO, Fox News contributor. We’re very lucky to have him.

3:51

CIO Scott Martin Interviewed on Fox News 7.21.22 Cavuto Coast to Coast

Kingsview CIO Scott Martin discusses recent COVID developments and the economy’s reaction. He talks about what we might have seen a year or two ago in these same circumstances, and whether the economy is “dealing” with the latest uptick in cases.

Program:  Cavuto Coast to Coast
Date:  7/21/2022
Station:  Fox Business News
Time:  12:00PM

NEIL CAVUTO: All right. We’ve got a market that’s up right now. You’re looking at and saying 26 points, let’s not have a party with this. But we have been down over 300 points. And a lot of that came on this initial news we got. I’ve been telling you that the president testing positive for COVID because it almost seemed like all the boldfaced names in Washington and Hollywood have gotten this except the president. So he joined a club that’s gotten very, very crowded. Scott Martin on the reaction to all of this. Scott, I guess if this condition were a lot worse or there’d be a lot more worrisome signs, we wouldn’t see the numbers we’re seeing. But what do you think?

SCOTT MARTIN: Well, what a wild time, Neil. Things feel like they’ve really gotten crazy, man, in the last just like, few days. And forgive my dress today. My tie, I think, has COVID. So I just left it at home, and I’m sure I have it, too. Believe it or not, I mean, I tested today, but you know what I mean? You and Dr. Janette did some amazing things in that interview, talking about how COVID symptoms don’t they show up? But then you don’t test positive for a while. Neil, can you imagine there’s many of us that are out there that may be carrying it. But the point is this we’re so far along in this process. She mentioned the corona, the monoclonal antibodies and things that are out there now that are helping kind of deal with this. The economy’s got those antibodies, too, because we’ve gone through this now for two years. We’ve managed the best we can, the flow of employees, the flow of labor, obviously, the flow of hiring and the flow of spending. Can you imagine, Neil, if this was happening, this kind of stuff, this outbreak, the president, etc., was happening about a year ago. Two years ago, we’d be down 1000 points.

CAVUTO: I do worry, though, you’re right.

MARTIN: Rallied four points already.

CAVUTO: No, you’re quite right, Scott, and I’m not wanting to be an alarmist at all. I so I try to find a balance between being, you know, wise about this and going maybe too cavalier about this. And given what we’ve been through and the mask requirements and the shutdowns, I can well understand America’s predisposition to say, no, no, no, no, no, don’t even go there. But if this were to escalate, as we’re seeing in Europe and the United States, albeit escalating in cases, not severity. But but but it is picking up steam if and I’m saying if my friend this were to really gain some traction again or any one of these new variants proves unstoppable with existing treatments. Then what?

MARTIN: I think it’s kind of no mas, no fuss, man. I think this has become part of our fabric, both in the markets, the economy and our lives. It’s scary to think about, but it’s also something that in a way be kind of proud of it. I mean, we’re getting through this the best we can, and I am not a doctor. I don’t play one on TV. But part of getting over this and the variance and things like that, they’re getting less severe in some cases. And a lot of cases, a lot of cases that I’ve been familiar with with friends and family members. So, Neil, the economy is dealing with it. And so it’s almost like the economy’s getting passed it to somebody, just like we’re getting passed. Neal, as you’ve seen some of the earnings reports take place this week with some of these companies, Netflix and so forth. Not great numbers, my friend. But what’s happening? These stocks are rallying because they’ve already got it down. The sellers are already gone. And so the market got so nasty, so bad it got, as we’ve said before, to each other, it got so dark before dawn that things are going to be okay. It’s going to be a struggle. I mean, if if research is to your point, there’ll be people out of work. Restaurants may be closed because of staff and things, but it doesn’t feel as scary and severe, at least in my mind, which could be anything because of the brain fog and everything you talk about self, self, self imposing. It’s like it doesn’t feel as scary this time and I hope that stays the case.

CAVUTO: Yeah, the markets are as resilient sometimes as the American people, so we hope that does stay the case. Scott Martin, thank you very, very much.

 

3:30
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