CIO Scott Martin Interviewed on Fox Business News 6.7.21

Kingsview CIO Scott Martin discusses the current US economy as it pertains to debt, spending, and small business.

Program: Mornings with Maria
Date: 6/7/2021
Station: Fox Business News
Time: 6:00AM

MARIA BARTIROMO: Investors watching your money. Joining me right now is Kingsview, Wealth Management Chief Investment Officer and Fox News contributor Scottie Martin, Bulltick Capital Markets Chief Strategist Kathryn Rooney. Vera and Michael Lee, Strategy founder Michael Lee. Great to see everybody this morning. Thank you so much for joining me on a beautiful Monday morning. Scott, kicking it off with you. Got a mixed story this morning, but we’re watching inflation. We’ve got inflation data later on in the week. We’re getting the May Consumer Price Index on Thursday. How do you feel about markets today? We’re still not far away from record highs, although technology has certainly been rolling over. Assess the markets from your standpoint.

SCOTT MARTIN: Yeah, I feel a little less than fabulous today, and it’s not just because it’s Monday, we’ve got a big week ahead, as you mentioned, Maria, it’s the fact that folks from the administration and the administration itself seem to just be blowing it when it comes to policy and outlook here. I mean, Janet Yellen, as you’ve talked about most of the morning here, Maria is talking about higher interest rates being a plus for the US economy as we drive up debt, as we go crazy with spending, as businesses need to lend to to fund their operations, to get back on their feet and the administration blowing it from a domestic and global policy as well. I think we have a lot of risks here, as you’ve been speaking with several guests this morning about how things pan out with respect to inflation, spending growth and frankly, interference, Maria, that the administration is running on mom and pop America who are just trying to get back on their feet and get back to be part of the economy that we have ahead of us.

BARTIROMO: So we know that President Biden does not have support for this package, Scott, he would like to get it all through through reconciliation. He wants to spend another five trillion dollars and he wants to raise taxes by the highest tax increases that we’ve seen in a generation. But again, he doesn’t have the support. If we were to see higher taxes, does that impact stock market negatively later on in the year?

MARTIN: Of course. And I think you’re right about the number. I mean, the numbers a moon shot right now. I mean, with respect to what we’re seeing in Congress, what we’ve seen from Joe Manchin over the weekend, it’s a moon shot. I mean, that’s a big number. But the reality is this administration starts high, they start histrionic, and then they chop it down and say, hey, we’re making a deal with you when in reality the deal was a bad deal to begin with. So that’s the tactic. That’s what I’m worried about. And I think markets will be eventually to.

BARTIROMO: Yeah, I mean, markets are treading carefully here, Catherine, we’ve got news just over the last week of this beginning of selling some assets on the Fed’s balance sheet. Now, they say that’s not tapering, but they’ve already announced that they’re going to start selling some assets that they accumulated on the balance sheet during the 20 20 pandemic. And then you’ve got the infrastructure spending package. The federal part of this, President Biden set to meet with West Virginia Senator Shelley Moore Capito later today. He’s got this last ditch effort to strike a bipartisan deal on this massive spending bill. What’s priced into the market? How do you see all of this playing out, whether it’s the spending bill that he’s trying to jam through reconciliation, which is not happening because of the Democrat lack of support or the Federal Reserve beginning this campaign sort of tiptoeing in to the tapering.

KATHRYN ROONEY VERA: Yeah, well, thank goodness, hallelujah, they’ve started to even talk about tapering, remember Maria and the audience, it’s important to remember that the corporate bond position is very, very small. So that was that was a very unusual and unprecedented way to go about quantitative easing. So they’re going to start to roll off some of those corporate bond holdings. The biggest companies, I mean, we’re talking Apple, Daimler Chrysler Anheuser-Busch. These were effectively being subsidized by the federal government. The question I ask myself, Marie, is why this insatiable thirst by the federal government to increase spending? We had six trillion dollars approved by the by Congress for covid. We have two point three trillion dollars remaining from those funds. This is data from the bipartisan committee for a responsible federal government. So why not use some of those funds instead of talking about increasing taxes? You know, not even if they can get infrastructure done. We don’t have the raw materials or the human or the manpower to do so. If the federal government were to slowly or maybe very quickly get rid of the emergency measures that are no longer needed because we’re out of the emergency effectively, then maybe we’ll have a chance of getting those construction workers to build those roads and bridges. But even as of right now, we have the money. It’s in the covid funds. We don’t need to keep paying unemployment benefits that are keeping guys and gals on the sidelines and this inexhaustible, I think, interest in indebting exponentially. The United States government is very concerning. The markets tend to your question, Maria, are completely pricing in a continuation of both monetary and fiscal policy. That’s probably right. But once we do get that big surge in inflation, interest rates are going to go have to go higher and the party’s over. So I think that investors have to be concerned. I’ve talked about inflation for some time now and they have to protect their portfolios with inflation protected instruments.

BARTIROMO: Well, I think you make a great point, Kathryn. You’re right. I mean, it’s more of an ideology. This administration wants to have a green economy, and that requires an incredible amount of spending and a change of the structural foundation of this economy. It’s going to mean incredibly higher fees and regulatory cost for for businesses as well. And the economy’s growing. I mean, we’ve got expectations of up to nine percent growth for the GDP in twenty twenty one without all of this spending. So just leave it alone. And what you mentioned about debt. You heard what Kevin what Jason Smith, the ranking member on the Budget Committee, told me yesterday in the 10th year of President Biden’s budget, we’re going to spend more on interest on the debt that we spend, all on our defense. We spend more than 700 billion on defense. The debt the debt interest is nine hundred and fourteen billion dollars in year 10 Kathryn.

ROONEY-VERA: That’s right, and look, even Social Security, we know that that’s a black box and that’s a Ponzi scheme, really effectively interest payments very soon and even before then, Maria, are going to exceed the amount that we owe for Social Security. So it’s very concerning. It’s completely unsustainable. And there’s only a certain period of time for which you can grow debt exponentially more than you’re actually growing the nominal GDP of the US economy.

BARTIROMO: Yeah, I’d say and Michael, we know that these rock bottom rates and this Federal Reserve stimulus has pushed investors to go out on the risk curve. Look at crypto Bitcoin is trading up this morning. It had a rough day, certainly over the weekend. It fell after Chinese social media platform Weibo suspended several crypto related pages. Goldman Sachs is also noting the ongoing hesitancy for crypto adoption. Michael, your thoughts on where we are on Bitcoin and the crypto market?

MICHAEL LEE: Look, as long as there’s money printing worldwide, Bitcoin and crypto aren’t going anywhere, you got a little bit of negative sentiment out of Goldman Sachs CIO survey saying that the CIOs they’re talking to said that crypto is their least favorite trade. However, just a couple of months ago, Bank of America did a similar survey and said that Bitcoin was the most crowded trade. We’re not going anywhere. Where Bitcoin is in kind of the middle of 30 thousands is typical of the pullbacks you’ve seen historically in the asset. I expect volatility continue, but I think all time new highs for Bitcoin are a long way from here. I don’t know if that’s this year or next year, but I think if you’re a believer in the asset as I am, you’d be buying more right here. You’d be dollar cost averaging in and taking advantage of the volatility that we’re seeing.

BARTIROMO: Yeah, I mean, it’s at thirty six thousand five hundred twenty nine, but just a couple of weeks ago it was at sixty five thousand. So there you go. All right. Great word on Wall Street, everybody. Thank you so much. Scott Martin, Kathryn Rooney, Vera and Michael Lee, great to talk with you. Have a wonderful Monday, guys. We’ll see you soon.

8:23

SVP Paul Nolte Interviewed By Reuters 6.8.21

Reuters interviews Paul Nolte, SVP & Sr. Portfolio Manager

Kingsview SVP Paul Nolte discusses the current “waiting game” and monetary policy.

Click here for the full article

3:00

Portfolio Manager Insights | Weekly Investor Commentary – 6.9.21

Click here for the full commentary.

PORTFOLIO MANAGER INSIGHTS
WEEKLY INVESTOR COMMENTARY | 6.9.21
Investment Committee

PORTFOLIO MANAGER INSIGHTS
WEEKLY INVESTOR COMMENTARY | 6.9.21
Investment Committee

Just as it has across history, the Federal Reserve played a central role in the crisis and recovery of the past 18 months. At the onset of the pandemic, even before many cities and states went on lockdown, the Fed had already slashed its policy rate to zero percent. As the economy and financial markets worsened, the Fed began expanding its balance sheet by buying Treasuries, mortgage-backed securities and – for the first time – corporate bonds. With the Fed announcement last week that it would begin to unwind its corporate bond holdings, some investors may wonder how this and future Fed actions could affect their portfolios.

The Fed’s objective is to keep the economy and financial markets running smoothly. On the economic front, they do so by examining a wide variety of data and targeting a dual mandate of inflation and unemployment. However, long-term economic trends matter little if the financial system seizes up in the short run, as it did during the 2008 financial crisis. This is why, as credit markets began to falter in early 2020, the Fed pulled out all the stops. Buying corporate bonds was one way to directly contain a spike in borrowing costs (i.e. by providing a floor under bond prices).

At this point, the financial system has not only calmed, but many argue that it is overextended in many areas. This includes high-flying tech stocks, which have been volatile in recent months, “meme stocks” with significant retail investor interest, SPACs, and more. Thus, it is not surprising for the Fed to begin to reduce its corporate bond holdings.

For investors, this hints at the bigger question: when will the Fed will begin to reduce the pace of Treasury and MBS purchases, which currently stands at $120 billion per month, and eventually raise rates? As is always the case, next week’s Fed announcement and press conference will be scrutinized for any hints on the timing and magnitude of these events. Expectations vary, but many believe the Fed will begin unwinding its balance sheet at the start of 2022 and raise rates in early 2023.

This timing may change if inflation continues to heat up and the economy makes significant progress. Last week’s jobs report showed that the unemployment rate has already fallen to 5.8%. Moreover, when the Fed does begin to discuss these topics, many investors worry about another “taper tantrum” – a period in 2013 when the mere mention of reducing asset purchases rocked the bond market. Although there is certainly the risk of another such event, there are a few reasons for long-term investors to stay calm.

First, as disruptive as the taper tantrum was to fixed income holdings, the typical diversified investor finished the year with strong gains. This is because the S&P 500 generated a 32% return in 2013, offsetting the challenges faced by bonds. Bonds recovered soon after the following year.


FED ACTION HELPED TO CALM THE BOND MARKET LAST YEAR

KEY TAKEAWAY:

1. Credit markets began facing stress during the initial months of the pandemic. Actions by the Fed and Congress, and a quick recovery in the market helped bond yields to calm.

Second, the Fed has (presumably) learned from that episode and will continue to bend over backwards to avoid a repeat. This means that they will either keep monetary policy loose for longer, or be extremely gradual in their approach. Of course, it can be argued that it may be better to rip off the band-aid, especially if there are excesses in the financial system


THE FED BALANCE SHEET IS APPROACHING $8 TRILLION

KEY TAKEAWAY:

1. The Fed has expanded its balance sheet to nearly $8 trillion.
2. This eclipses the $4.5 trillion reached after the financial crisis as well as the growth in the balance sheets of other major central banks.

Third, there is an old debate on whether “tapering is tightening.” In other words, is reducing the pace of bond purchases equivalent to selling bonds from its balance sheet? That is, is it the level or the direction that matters? While this is a theoretical debate, it’s clear in reality that the Fed will continue to be a significant buyer of bonds for quite some time. There are few reasons for long-term investors to worry about a sudden change in Fed policy.


MARKETS EXPECT FED TIGHTENING OVER THE NEXT TWO YEARS

KEY TAKEAWAYS:

1. At the moment, markets expect the Fed to begin raising rates in early 2023, and to possibly begin unwinding its balance sheet in early 2022. Of course, investors will watch for hints that these events could occur sooner.

Regardless of how the Fed approaches tapering and tightening, long-term investors are better off staying focused on their financial goals rather than reacting to every Fed announcement. The bottom line? Investors ought to focus on their long-term financial goals rather than short-term Fed moves. Diversified portfolios helped to protect investors during the financial crisis, the taper tantrum and over the past 18 months – regardless of Fed policy.

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. (2021-254)

3:00

CIO Scott Martin Interviewed on Fox Business News 6.4.21

Kingsview CIO Scott Martin discusses data as it relates to inflation, trimming positions in certain sectors, and putting cash back to work in areas such as technology and utilities.

Program: Making Money with Charles Payne
Date: 6/4/2021
Station: Fox Business News
Time: 2:00PM

CHARLES PAYNE: I want to bring in now the money guys. Hey, David Dietze with us. Scott Martin’s with us. All right. Equity’s going much higher. Bond yields are plunging. The fear index is plunging. Scott, so how does this report change your way of thinking? Maybe your positioning with respect to your stock positions

SCOTT MARTIN: It doesn’t really change anything for us, Charles. We’ve actually been using some of the strength in some of the recent economic data to pare back just some of the winners, man, that we’ve talked a lot about on the show here, financials, energy and materials. And it’s not that we’re bailing on those positions, but just trimming them back, taking some profits off the table, because I think a lot of this data, as you talked about with Constance there, is starting to get baked in the cake as far as how summer is going to go. And therefore, I think the market’s going to likely be disappointed by better and better data as it relates to inflation as well.

CHARLES PAYNE: Today, energy and financials, those are two sectors that are down. Almost all the rest are up. Are you putting that money to work somewhere else?

MARTIN: No we’re keeping it in cash for now, Charles, and then looking to maybe put it back to work and some things that fall more over the course of the next several weeks, which my guess is going to be in the technology space, maybe utilities as well.

CHARLES PAYNE: Hey, guys, I want you to check out this headline, you at home as well, the Fed and inflation suggest the bubble is forming now. You know, a lot of people read that, right? They got out of the market when they said it. Except the problem is that was from October 2013 when they got out of the market. Well, subsequently, they missed one hundred thirty six percent move. He been a three hundred percent move on the Nasdaq. One hundred, David Dietze. What’s the moral of this story?

DAVID DIETZE: Well, market timing does not work. And before you are all inclined to take a big move with your money, think who are you going to be selling to? What are they thinking about? Go back to your goals. Historically, this market has outpaced cash and fixed income over the last hundred years. There’s always going to be some sectors that are overpriced, but conversely, there’s always going to be some sectors they’re underpriced. Back then, technology was very cheap. We were on the cusp of big tech revolution. Should never want to do one thing with all your money for every bad headline. There’s also a good headline.

PAYNE: Yeah, the moral of the story is ignoring the headlines. OK, we’re looking pretty good here, Scott. And know you’re sitting on some cash my man, what will it take for you to now look at growth? Which I believe is the new value.

MARTIN: Yeah, it could be, and it got to a level where there is some value in growth, Charles. I mean, we just are looking for pullbacks. We’re looking for entry points. We’ve had those in Zoom. We’ve had them in DocuSign, we’ve had them in Teladoc, Zwillo as well. So just looking for four points of interest or points of entry that are just basically oversold conditions. The other thing, too, I mentioned the cash earlier, Charles. You know, I love Gold man. We’ve been picking up gold on the lows in March and April of this spring. A lot of people called us crazy as Bitcoin and Ethereum are falling out of favor because of regulation and taxation. It looks like gold is back in favor and looking to be that alternative asset class that it’s always been.

PAYNE: Yeah, gold right around nineteen hundred and a strong stealth rally. David what are some of the things you’re doing? What are you focused on right now?

DIETZE: Well, so we love growth too but I would kind of turn it around. I don’t want to look at the labels on stocks. I want to look at the companies. They’re going to show the greatest earnings per share growth. And there I come back to the cyclicals and the value plays. The energy stocks are leading the brigade in terms of year over year growth. Financials are going to come up next. And that’s where the growth is, at least to the end of the year. The secular growers did a great job, but now they’re year over year comparisons aren’t going to look quite as good. of course, unfortunately, I do think we’re going to see higher interest rates. Who does, who benefits from that? Who is hurt? Well, certainly the value plays where there’s more earnings today. Greater dividends today are more resilient in that kind of situation versus growth. Companies have long, longer dated things. So I would stick with the value in financials. A slight overweight. They’re continuing.

PAYNE: All right, so you see this whole inflation thing still bubbling up at some point today, notwithstanding David Scott to the best. I appreciate you guys. Have a great weekend. We’ll talk soon.

5:49

CIO Scott Martin Interviewed on Fox Business News 6.2.21 Pt 1

Kingsview CIO Scott Martin discusses the great reopening, global supply chains, and what pricing pressures mean for small businesses.

Program: Cavuto Coast to CoastDate: 6/2/2021
Station: Fox Business News
Time: 12:00PM

NEIL CAVUTO: Want to bring Jared Levy into this Delancey Strategies, President Scott Martin, Kingsview Asset Management. Gentlemen, of course, for this restaurant owner, you can pull all the academic prescriptions you want. It’s making his business a tougher business. And he he he really doesn’t need that coming out of the pandemic where he’s hurt enough just finding labor and finding workers. Now, this. So I’m wondering, Scott, I know a Federal Reserve district president, Philadelphia saying this run up will be short lived, but it’s not short lived. This guy.

SCOTT MARTIN: No, in any short lived period doesn’t feel good to the business owner. I mean, Jeff talked about it with a fella there about he’s losing money on the wings today, hoping they go down in price in the future. I mean, that’s a scary hope to hang your profits on. And that’s something that concerns me, Neil, about this great reopening that’s out there. Yes. Global supply chains hopefully will get back on track and therefore some of that pricing pressure will alleviate. But the mom and pop the small business down the road that competes with the big business in your neighborhood. Those guys and gals don’t have the pricing power with their suppliers that some of the bigger companies have. And so when you look at this re-opening happening and saying, hey, this is going to be great and it’s going to help everybody, as the administration likes to say, it’s probably going to help the big guys more than anything, because the small guys still have a lot of that pressure, as the fellow said, to talk to Jeff about passing on those price increases that they’re seeing from their suppliers.

CAVUTO: Yeah, you know, when you look at this chart and you want to step back and say, let’s hope things calm down, these ransomware spikes or whatever you want to call them, they can’t go on forever. Of course, we’ve seen enough incidents where we’re beginning to wonder how true that is. But but that even the run up we’ve been seeing in a lot of these prices, all of these developments, they were real. The surge in things like car and truck rentals and the haircut, first of all, services, meals, et cetera, that was in place long before any of these attacks. And I’m just wondering if the Federal Reserve, which seems to think it won’t last very long, is wrong on that it’s going to compel them to respond to it or risk falling behind the curve. Right. I mean, so how does it play this?

JARED LEVY: Yeah, this is there’s two pieces here, right? I mean, one, you know, my heart goes out to every small business owner in this country because the key here is, is not the just the price increases. It’s the fact we’re traders. Right? We talk about investing, buying, selling. Remember, these guys have run businesses. You don’t go to your local burger joint and see the burgers swimming up 10 cents, down a dollar, up two dollars. They don’t operate that way. You know, when things get missed, when things get priced or major crisis happen, they reprice and they stay that way. We don’t see a lot of undulation. So the bottom line is these guys are going to have to ratchet up and it’s going to stay that way at the consumer level and at their level if they’re going to stay open. So that’s one problem. You know, and this isn’t a JBS issue. And I’m referencing the Meat-packing company in the meat distribution company. This is a bigger, broader effect that’s taking place around the world. I’m talking about inflation. It’s going to continue. Unfortunately, you’ve got a lot of money stashed away. You’ve got a lot of folks I mean, I can’t get work done on my house. There’s nobody available. People are paying two, three, four times for services to get them done. Now, do you do you correct that with with interest rates immediately? I mean, it’ll shock the marketplace, but I don’t know how a rise in interest rates or policy or even Putin saying don’t hack. You know, hey, guys, don’t don’t nobody do any ransomware attacks. How that’s really going to change things. This is a much longer, bigger arm that’s swinging right now. And frankly, I don’t think that even an extreme jump is going to correct it. So so, again, I don’t think this inflation is short lived. And I think it’s something that’s here to stay. We’re going to have to really adjust and it’s going to take some time.

CAVUTO: Yeah, you know, whether you’re worried about this returning to the 70s type of place, which I think is a bit overwrought, it’s still a trend that’s firmly in place. And on that point, Scott, I’m wondering how the market deals with that. I mean, it seems to recognize that the backdrop for this is strong demand. We’re coming out of our homes. Obviously, bookings are very strong on airlines, one of the best travel weekends we’ve seen since before the pandemic. So the trend is the economy’s front. I get that. But when does the market get or will it respond to this stubborn uptick in prices that might continue for a while?

MARTIN: It’s when the sugar high runs out, Neil, from that euphoric run up of this great reopening that we’ve been anticipating. I mean, I’m in Ohio today and they’ve removed, as you’ve been talking about on the show today, all the mask mandates statewide, which is great. So that provides that sugar high, the excitement for that run up, that demand that you talk about to show up. But when we get there and I think to Jared’s point, when these price increases don’t alleviate, then you kind of stand around and be like, well, now what? Now we need wage increases. Now we need increases in wealth and things like that to start paying for all the increased costs that we’ve seen. And that’s when I think the markets need to really take heart to this. Now, what you will see, though, is in some of the bigger companies like the Starbucks of the world and Netflix, some of the companies we own, Neil, in our portfolios, you’re going to see pricing power there. I mean, companies like those can raise their prices a dollar or two and likely get the buy in from consumers. But those are a select few. And so it basically shakes out not to be sexist, the men from the boys to use that term as to how some companies are going to be able to weather those price increases and the stock prices are not going to suffer versus others that cannot.

CAVUTO: All right, guys, I want to thank. We’re going to have you back a little bit later here.

5:49

CIO Scott Martin Interviewed on Fox Business News 6.2.21 Pt 2

Kingsview CIO Scott Martin discusses nationwide real estate sectors; corporate, industrial and residential.

Program: Cavuto Coast to Coast
Date: 6/2/2021
Station: Fox Business News
Time: 12:00PM

NEIL CAVUTO: Want to get reaction to all of this with Jared Levy and Scott Martin, you know, Jared and Scottie, think about it, commercial rents are going to continue going down. I mean, I guess they’re anticipating a comeback as businesses and people return to those businesses. But this might be more the norm, what we just heard. So, Jared, what do you think?

JARED LEVY: Yes. So Manhattan’s a kind of an unfortunate but now fortunate microcosm, right? Median rents in that city dropped to twenty seven hundred dollars in the first quarter of the year. That’s the lowest of all time. And you got to think about Manhattan. Right. It’s kind of really need a lot of very small, very expensive places. A lot of things are vertical. So for retailers, not really sort of a great place to be. Now, that’s not to say that there can’t be a rebirth like the one we just saw. The issue is how do we fill up all those big high rises that are now being vacated by big companies moving elsewhere where there’s lower taxes, lower cost of workforce, et cetera. So, you know, another interesting point, Seattle just dethroned Manhattan as the number one spot for foreign investment. So I’m not ready to buy in on Manhattan Persay. But I will say that real estate across the U.S. is seeing the commercial real estate is seeing a huge change in evolution. Sam Zell just dump three point four billion in a mammoth mammoth real estate investment group. I believe they’re a huge industrial operator. So they service like Amazon’s people like that. So I think that’s where the big money to be made in commercial real estate’s going to be Manhattan. Who knows? But but interesting to say.

CAVUTO: Yeah. And you think about it, too, Scott, to Jared’s point, I mean, when when people do return to their offices and a good many will, they’ll be spread out a little bit. They’re not going to be packed like sardines like they had been before. We don’t know all the details, but we do know enough that the demand for still more office space is going to be cold for a while. I’m just wondering how this plays out in cities like New York.

SCOTT MARTIN: Well, I would add Chicago to that list, my hometown, Neil, which is suffering, too, I mean, we’re looking at Chicago occupancy rates near our office in downtown Chicago, less than 20 percent, and with no end in sight, frankly, of people coming back or deciding to. And so I think that’s that’s really interesting takeaway. You know, there’s other cities, though, Dallas, Denver, that have weathered some of the corporate real estate difficulties much better. And so those will probably bounce back faster. But, yeah, Manhattan, San Francisco, certainly Chicago. You have the impact, as Jared said, from the vertical dearth of people coming back with respect to some of the corporate office buildings being empty and then also the mom and pops or even just the retail that was built around, say that corporate infrastructure, that that’s at risk now, too. So really, I think it depends on where you go and kind of what sectors you’re in. Industrial real estate has been an area we’ve done a lot of investing in because of the expansion from Amazon and companies like that. But corporate in some of those long famed leading cities of the United States really looks to struggle here going forward.

CAVUTO: Would either of you look at real estate investment trust in this environment, some of them have been beaten down quickly, if I can. Gentlemen, Gerard, to you,

LEVY: the answer is yeah. You’ve got to be really careful here. Remember, here’s the key to investing in real estate. If you can’t jack up your rents enough to meet inflation, there is no protective measures there. The good thing is there’s a lot of preferential tax treatment. But again, I would look at I like multifamily in some cities, but certainly I would stay away from high density areas. Like Scott just mentioned. The big metro areas would be a place that I would avoid in general in terms of reinvestment.

CAVUTO: Scott how about you, REITS, any interest in them?

MARTIN: Yeah, yeah. Multifamily Neil and Florida, even some residential housing expansion that’s going on outside of cities like Nashville and Denver, as I mentioned, that are doing very well through the pandemic and have a lot of growth ahead of them.

CAVUTO: All right, gentlemen, I want to thank you both very much, Jared and Scott, on all of this.

3:54

Nolte Notes 6.2.21

June 1, 2021

What was Hollywood’s six-million-dollar man is now Washington’s six-billion-dollar man. Inflation impacts everything! The new budget rollout late on Friday will be the starting point for wrangling about deficits (do they matter?), spending programs (remember shovel ready?) and initiatives the current administration would like to put forward. An interesting provision is an increase in capital gains tax rates that would be retroactive to April. While many are wringing their hands about the proposals, what gets passed, should make for some interesting beach reading this summer. Back at the economy, the inflationary figures continue to run “hot” as the economy continues to lurch toward a full re-opening. Supplies channels are still not operating correctly and are unlikely to get back to normal before year end. Employment is getting better as the weekly jobless claims’ numbers fell again last week. The coming data dump for the first week of June will include the “official” jobs report that should see some improvement over last month’s disappointing figures.

The markets continue to chug along, even in the face of data that historically would have had the markets falling. Higher inflation and large job gains are generally a recipe for hiking interest rates. However, looking at the bond market, you would have to shake a few traders to get them to move. Ten-year treasury rates remain below their March peak, and “risky” high yield bonds have traded well. Investors are amazingly comfortable with a Federal Reserve that has been buying large quantities of Treasury securities every week. Along with a commitment to keep interest rates lower for longer, investors have little choice but to buy equities to get any kind of return. That has pushed valuations of the equity markets to extremely high levels, rivaling those of 1929 and 2000. What is currently missing is a reason to sell. Until the Fed begins to discuss withdrawing from their purchase program, or we begin to see investors move out of risky portions of the markets, the momentum is still on the bull’s side and stocks can get pricier still. The warm sun calls and living is easy…for now.

After a very rough first quarter, bond investors have been rewarded with “staying the course” as returns have been positive in each of the last two months. Bonds have even given stocks a run for their money since late April, providing essentially the same return without the daily swings. If there are concerns in the bond market, it is that the bond model has swung negative, indicating the direction for interest rates may be higher in the coming weeks. The model has been negative much of this year and even as rates have moderated, they really have not dropped too far from their March peaks. Commodity prices are likely to be the key driver for interest rates going forward.

The markets have been swinging back and forth between growth and value for much of the past six months, however value has been the “winner” overall, as it has been two steps forward, one step back for value stocks. These are the parts of the markets that will benefit from the continued opening of the economy as we go from virtual meetings to in person, from FaceTime to face-to-face. There have been and will be plenty of bumps along the way, however the differences in valuations between these two asset classes tends to favor value ahead of growth. Comparing technology’s performance vs. nearly every other S&P500 sector shows technology’s performance peaking in the third quarter of last year and underperforming since. Even comparing technology to international, shows a similar relationship. The rotation away from technology is hard for investors to do, as the allure of high growth keeps them from moving. However, the valuation on technology stocks in general is well ahead of their historical norms, while valuations of other sectors and asset classes remain near or below historical norms.

“Sell in May and go away” is a Wall Street adage that historically shows the markets doing poorly in the summer. However, the last few years it would be better to hold the stocks and just go away. Will this year be any different? Or will the Fed keep the good times rolling with as easy monetary policy? Stay tuned.

The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable but are opinions and do not constitute a guarantee of present or future financial market conditions.

2:30

CIO Scott Martin Interviewed on Fox Business News 5.27.21

Kingsview CIO Scott Martin discusses the housing market and President Biden’s six trillion-dollar budget with its higher capital gains rate.

Program: Cavuto Coast to Coast
Date: 5/27/2021
Station: Fox Business News
Time: 12:00PM

NEIL CAVUTO: Ray Wang is here to help figure it out, Scott Martin here to help us figure it out as well. Gentlemen, good to have you. Ray first to you on what’s happening in California, because, you know, demand is demand. And even in a state that has high taxes and all these other issues, it’s not hurting real estate. In fact, it may be helping it. I don’t know. But what do you think of that?

RAY WANG: Well, what’s going on is the millennial migration from urban cause, they’re having families, they’re getting married, they need a lot more space. The second, though, is interesting. This is the supply issue. There is a war. There’s a war in the American dream, which is the single family home. And there’s everything being done to get rid of single family zoning, which is driving up what people want, which is single family homes. No matter how small they are, people want a house and a yard. And then the last piece is the unions are tacking on tons of legislation on bills to actually require union labor when we’ve got a labor shortage for construction. So that’s driving up the cost. Those three factors.

CAVUTO: You know, you hear anecdotal evidence to Scott, hopeful homebuyers offering anything and everything, from parties to the seller to incentives and tickets to baseball games just to give them an edge here. It sounds a little frothy to me. It’s more anecdotal than it is nationwide. Hardly a rule of thumb. But does does that worry you, that nature of this?

SCOTT MARTIN: Well, if that stuff is out there, Neil, I’m going to sell my house later today because I love parties and I love ball games. So, look, it does show you, though, how crazy it is out there to Ray’s point as far as how much this battle, I think, was the word he used is going on between buyers and sellers. Now, in the case of California, I think, as was pointed out, this could be a kind of a concentration issue, too, of certain areas being hotter than others. I think somewhat real estate is lagging in some of the price corrections are likely to happen in California going forward when things happen. And let’s say the governorship doesn’t turn over, as some of us expect it to in politics, don’t change. But, yeah, you’re right. I mean, there are a lot of tactics going on now in the seller’s market or the buyers market, I guess, really where they’re trying to get any edge possible. I mean, how many times are you hearing from friends or colleagues that they’re buying homes before they even come on the market on the MLS because folks go in and pick off a pocket listing before they even listed publicly?

CAVUTO: Yeah, I think that’s now counting for close to six percent of all sales that they were never even got to listing. Ray let me ask you a little about something else going on in Washington in this environment, not only all the spending, but all the taxing with it. And part of it was Janet Yellen, the treasury secretary, talking about beefing up the IRS so that they can get more tax dough out of folks. Listen to this.

JANET YELLEN: {CLIP} The IRS is ineed of additional resources to over the next 10 years, the American people could see roughly seven trillion dollars fall through the cracks of our tax system. Why? Because many of the country’s wealthiest taxpayers do not pay their full tax bill and the IRS is not nearly staffed up enough to ensure compliance.

CAVUTO: All right, my immediate reaction that Ray, let’s say, even tripled the budget for the IRS to thirty plus billion dollars, you’re justifying it that it can get you seven trillion dollars. Sign me up for that if you can make that happen here. But I mean, it does have a bit of a stretch feel to it. But what did you make of that?

WANG: It is definitely a stretch. I mean, we need a fair tax system if we get rid of all the important incentives and all the kind of special rules and all the deduction favors, if you get a flat tax, we wouldn’t have this problem. People just pay it. I think the challenge really is we’ve seen the abuse of the tax system over the past 20 years by the government using that for going after political issues. That’s a big issue. But the challenge really is can we get to a tax system that’s efficient, that actually represents what it means? You’re getting the right amount of spending, the right amount of benefits we’re spending beyond our control. And so good luck. I mean, if you’re going after the crypto traders, maybe catch some things there might catch some things in

other weird deductions, but it is a big stretch. I think we should just get to a much more efficient flat tax system so that we can actually make sure everybody pays what they need and they’re not complicated or make a mistake by saying, oh, I made this deduction instead of this other deduction because I didn’t understand it.

CAVUTO: You know, Scott, I’d be remiss if I didn’t mention this other development on the president’s budget. He’s going to sort of outline officially tomorrow, but we’re getting hints of it today. Six trillion dollars, the biggest budget we’ve ever seen in the United States history. But there’s an interesting wrinkle to this of reports that a built into that budget is the higher capital gains rate taking effect in April. In other words, if you wanted to sell your big winners and this goes through, it’s too late, you’re going to be taxed at that higher rate, at least richer investors are, which would be you. So how do you feel about that?

MARTIN: Hopefully me, if things continue to go well. Look, low hanging fruit to me in the tax system right now, Neil, is the capital gains rate because the stock market performance has been really good thanks to, by the way, the large and small businesses out there know, thanks to the government and all their help that they’re providing. But the administration sees it as low hanging fruit. So no shocker there that capital gains are going to be taken up. With respect to these wrinkles in these numbers. I mean, the numbers are shocking, Neil, more than World War two, cost inflation adjusted, by the way. That’s frightening. And I don’t believe that number being as low it is for a second. We’ve seen these numbers from D.C. The new administration just inflate rapidly over the course of the last, you know, one hundred twenty days. So the reality is we’d be lucky if the number is that low going forward is what they’re going to spend going forward. I think it’s going to be a lot higher and we’ve got to be ready for it.

CAVUTO: You know, you’re right about that, usually it starts out low, even eye popping, as the first numbers are, because they end up getting much higher. We’ll keep an eye on it, gentlemen. I want to thank you both very, very much.

6:13

CIO Scott Martin Interviewed on Fox Business News 5.25.21

Kingsview CIO Scott Martin discusses the global supply chain and the current administration’s effect on the U.S. dollar. He also talks about recent social media events and the intent of language.

Program: Making Money with Charles Payne
Date: 5/25/2021
Station: Fox Business News
Time: 2:00PM

CHARLES PAYNE: The evil, of course, these days could be inflation, it could be overvalued stocks, any dodginess development that could derail the economy. On that, I want to bring in our market pro – from Mayflower Adviser Larry Glazer also have got Kingsview Wealth Management. Scott Martin with me as well. Gentlemen, let me start with you, Larry. I know you’ve been concerned. I was reading some of the work you’ve done, even going back to 2018. So you’ve been concerned about inflation, but is it so pervasive? Right. Do you sense that it’s going to be so pervasive and enduring right now that the Fed will indeed be forced to derail this stock market?

LARRY GLAZER: You know, Charles, it’s a really good point and potentially the biggest risk to the stock market right now isn’t the economy. It’s not the reopening, it’s not even Covid. It may be Washington itself. It may be a Fed misstep. It could be higher taxes. Any of those things could potentially derail this. But I think more importantly, let’s play a little game here, shall we? And we’ll see how many times Fed talking head officials this week use the word transitory to describe the inflation that we’re all experiencing on Main Street every day. Charles, the proof is on the grill for Memorial Day. Look, let’s see what the price of chicken wings look like, right? That is, if you can get chicken wings, let’s see what the price of hamburger looks like that is. Maybe it’s going to be so expensive. We’re just going to eat the helper. No one’s going to take road trips. If gas prices go up, you’re not going to rebuild deck or your fence if lumber prices go up. So all those things are risk potentially. And we learn early on as you do not fight the Fed, if the Fed says there’s no inflation, it’s going to be good for the reopening. It’s going to be good for inflation. But you’ve got to be in companies. They have enough margin expansion. They can absorb that, pass it through cyclicals, industrials, materials, stocks and certain technology names that benefit from all the good things on the technology side that are happening today in this acceleration of innovation.

PAYNE: Well, if there no chicken wings, I’m going to be out down there protesting myself, Scott, when it comes to transitory, if we play the game, I’ve got the over whatever the number is. What’s your assessment? Because, again, the Fed, though, there’s a united front, they’re staying firm. They’re saying there’s no way we’re going to deviate no matter what.

SCOTT MARTIN: Yeah, I don’t know if they have a overunder yet, Charles, on that, because, as Larry pointed out, the Fed is just going to keep using that word over and over again until they’re right, because I actually agree with them. I mean, I think if the is globally re-open, as we hope they’re going to, you’re going to see that resource utilization. Easy for me to say. You’re going to see that sourcing of minerals and elements and things like that that are going into building things and making things again start to happen. Global supply chain should come back online and lessen the pressure that we’re seeing in price. So I think the one concern, though, Charles, is what the D.C. administration is doing to our good old greenback. That’s the US dollar if you’re playing at home, because this endless printing of money, the pork bills that are out there to buy votes and buy favor across America are the things that are killing the greenback, which is actually pushing up prices more than anything.

PAYNE: Yeah, DXY folks at home put that on your watch list if it goes on there. Eighty eight could be trouble for your shopping bill, although Multinational’s might like it. I want to get back to what you were saying to Larry. I understand this. And we all go shopping. We see what the prices are. But how do you explain more recently this sort of relative calm in the market? The 10 year bond yield keeps drifting. The VIX keeps going down. You know, of course, that’s the fear index. Other indicators in the market seem to have become sanguine.

GLAZER: That’s right, no, it is a really good point because we see this inflation out there, that the market isn’t sort of believing it. And it’s interesting because it would be easy for me to say to you, hey, the public isn’t buying what the Fed is selling. Actually, right now. The public is buying it. If the Fed tells them there’s no inflation, people are starting to absorb that. The market’s trying to absorb it. More importantly, China, the other big central bank, we have to keep our eyes laser focused on their jawboning, the price of commodities. They want to bring the price of commodities down for their

benefit. I still think you want to be in some of these producers of these materials, these raw materials, energy industrials, the companies that will benefit from this reopening. They’re still going to be an infrastructure plan. They’re going to benefit from that. But there’s no doubt, look, technology is getting a reprieve here because inflation fears went on hold yesterday. That’s a good thing for a lot of the really high quality tech names that we own in our portfolios. It’s good for the market as a whole. It does stabilize things. The lower VIX might be somewhat misleading. Charles, it may be sending us a false flag signal.

PAYNE: Right? I got you. Larry, it’s great seeing you, my friend. We’ll talk to you again soon, Scott. If you can stay right there because I want to bring in Bulltick Capital Markets, Kathryn Rooney Vera. And I want to switch course a little bit here. Florida Governor Ron Desantis just signed a new law imposing fines on social media companies that permanently bar political candidates. I know that’s your state, your Floridian, Kathryn, and that’s obviously these stocks. We watch a lot. Just your thoughts.

KATHRYN ROONEY VERA: Yeah, great, great thing, it’s fantastic, great state of Florida and wonderful governor, look what happened to Section 230, right? Big tech has had it both ways, have been both a publisher and a platform, a publisher. Your audience, remember, can censor butt and be sued. But a platform can’t censor but can’t be sued. And big tech has had it both ways for an inordinate amount of time. So imagine former President Trump that lives here in Florida, what his next move is going to be after this.

PAYNE: You know, I want to stay on social media and how this new woke era, coupled with really the appeasement of overseas markets and governments creating really serious turmoil. And in fact, I want to bring Scott Martin back on this. So John Cena fans are outraged. He had to he was forced to apologize in Mandarin, by the way, for calling Taiwan a country that says he is promoting the latest Fast and Furious installments. So, Scott, first, just let me get your thoughts on that. I’m a huge John Cena fan. I hated to see that.

SCOTT MARTIN: I did, too, and, you know, it’s always about intent, I think, with kind of this “WOKE” culture and some of the things that are said these days, Charles, that need to be apologized for or not. I mean, look, I don’t think

John Cena meant anything bad when he talked about Taiwan being the first country that could see Fast and Furious nine. I mean, and everybody got super upset. And then he had to apologize, like you mentioned, in Mandarin. I mean, I think with with the culture as such these days, you have to look at intent. It’s not just about what somebody says inadvertently. It’s their intent. And I don’t think John Cena meant anything bad about it. But let’s face it, let’s just say he didn’t apologize right away because he jumped on it pretty fast. Credit to him, he probably would have been cancelled. We probably had never heard from him again based on how things are going these days.

PAYNE: Well, you know, and also, let’s be honest, I mean, this is about being cancelled in China, which seems to have more sway over corporate America, woke corporate America than certainly conservatives in America. The movie did one hundred sixty million the first week and one hundred thirty five million in out of China. And also, let me add Mark Ruffalo to this. Right, because he also had to apologize. Now, this is really tough. I mean, saying Israel was committing genocide against Palestinians, Kathryn, all of this. You know, it’s clearly, you know, he was forced out the direction of Disney. They own the Avengers franchise. That’s where he’s making a lot of money. But it seems to me if you broaden this out, it’s another reason why these large corporations and their proxies, whether it’s actors or anybody else, should just simply stay out of political commentary. Your thoughts?

VERA: It’s beyond me why they think it’s to their benefit. They should stick with the bottom line rather than alienating, insulting their consumer base. Woke ideology Charles is popular with the elites, but it’s not popular with the common American. So I think that we need to look at what happened with the deplorable how that worked out for Hillary and really focus on the bottom line here, guys.

PAYNE: Well, you always focus on the bottom line, so let’s shift gears for a moment. I want your thoughts on this market. Its meandering, but I’m thinking and I’m you know, it’s going to take some time to know that we might have had an inflection point last week. I feel like the bias is kind of shifted back to the upside. And I think maybe for now the worst could be over. I know you’re not convinced. Where do you see this market?

VERA: Well, we have an inflation that’s both transitory and structural. Your previous guest, we’re talking about the transitory nature of it. It is, in fact. And by July, the base effects from last year’s horrific year is going to roll off. So that’s going to favor tech in the very near term. In twenty twenty two, though, Charles, I’m far more cautious. I think the combination of a doubling of the of long term capital gains, higher corporate taxes, higher marginal income taxes on on the rich are going to really favor and I think that combined with more structural inflation, are going to favor the less sexy sectors such as utilities, such as energy, such as telecom, high dividend names that I think these tax increases, especially on long term capital gains, Charles are going to be the great equalizer between what has historically been beneficial for tech, low capital gains tax brackets and and higher dividend sectors such as utilities and telecom and energy, which I think are going to be more defensive positions for going into twenty, twenty two.

PAYNE: All right, so folks, enjoy the run this year while you can, because if utilities are the number one sector, maybe the rest of your portfolio ain’t looking so good. Kathryn, Scott, always appreciate it. Thank you both very much.

9:10

SVP Paul Nolte Interviewed By Reuters 5.24.21

Reuters interviews Paul Nolte, SVP & Sr. Portfolio Manager

Kingsview SVP Paul Nolte discusses the evolution of cryptocurrency and how putting rules and regulations in place might be creating short-term volatility.

Click here for the full article

3:00