Kingsview CIO Scott Martin discusses the variance in data points – job numbers, consumer confidence, PMI, and inflation.
Program: Mornings with Maria
Station: Fox Business News
Time: 6:00 AM
DAGEN MCDOWELL: Time for the word on Wall Street. Top investors watching your money. Joining me now, Kingsview Wealth Management Chief Investment Officer, Fox News contributor Scott Martin, UBS Financial Services Private Wealth Advisor Alli McCartney, and Strategic Wealth Partners president and CEO Marc Tepper. Good to see all of you this morning. Scott, let me kick it off with you. We’re standing by for a weekly jobless claims out at eight thirty a.m. Eastern Time. Investors, of course, also waiting on the August jobs report due out tomorrow. The expectation there, seven hundred fifty thousand jobs added to the economy. The unemployment rate ticking down to five point two percent. Scott, what are you watching for?
SCOTT MARTIN: It all sounds awesome, doesn’t it? And I think these days is as untapped. That’s Mark Tepper. If you’re playing at home, if talked about all morning. There’s a lot of variance in these data points now. It’s just not the jobs numbers. It’s consumer confidence numbers. It’s PMI. It’s even inflation. My goodness. So the reality is this, Deighan, I think the market is ready for, say, a stinker to use a technical term here in the job market, because it’s not all bad news, boys and girls, because what that means is that kids, I think we go back to Mark annd I’s, say high school football days when we were stud’s, I think. Right, Mark, this is the lead block that the Fed needs going forward to keep that stimulus train going. If we start getting stinky again, to use that word, jobs numbers here, that allows the Fed to keep the spigot going as far as liquidity to the markets.
MCDOWELL: When you’re talking about the Fed, Scott, before we move on, in terms of the political pressure on Jay Powell, I just wonder and Tep can get in on this later as well. I just wonder, though, that won’t the spigot stay wide open because maybe Jay Powell wants to get another, you know, another term. Just real quick on that.
MARTIN: Yeah, another handful of years. Yeah, totally. And I think that’s the interesting thing is maybe Jay Powell is actually hoping for some disappointing economic numbers so he can justify the liquidy. But let’s face it, I mean, either maybe maybe they’re into the taper as soon as they think or maybe they don’t do the interest rate hikes as soon as they think. What are the other is not going to happen. So as far as the job numbers are concerned, I think the Fed has been right down the middle of the fairway. Another sports analogy. Yes, it’s early with respect to how they’re treating these markets and giving the markets what they need and what they expect. And that’s why we’re at or near all time highs in the S&P Nasci.
MCDOWELL: Yeah, I dare you to work in a cricket analogy. And next time you come on, Ali, I want to move on to you here. Let’s talk about consumer confidence. August, consumer confidence falling to its lowest level since February. And at the same time, we have companies like Costco announcing it’s going to reinstate purchasing limits on select items because people, again, are stockpiling goods as Covid cases. Serj, put this in perspective from a market or investor standpoint.
ALLI MCCARTNEY: Yeah. There’ll be no sports analogies here, I promise I couldn’t if I tried. Maybe lacrosse. I don’t know how that works. So, look, let’s go back to last March when the recovery in the market at least was was really heightened. And we said bull market participants said this is not going to be a straight line recovery. And the truth is that between now and then and very recently, it has been largely both in terms of earnings market numbers and economic information, pretty much a straight line recovery. And now we sit at this inflection point where a lot of the things that we were concerned about that were those downside risks have surfaced. We have a variant that is taxing hospitals and concerning both consumers and producers. Yet again, we have severe weather. We have back to school and we are past peak earnings. And so I think what a lot of the numbers that we’ve been seeing, both the ADP numbers we got yesterday, which were, you know, have 60 percent of what we were hoping for in terms of additional payrolls. I think the jobs number that we get tomorrow will reflect this as well. And consumer confidence, which we did get yesterday, which is the lowest number we’ve seen since February, which think about it, that was like the ramp up of both confidence in the vaccination program. So we’re now sitting at this low where consumers aren’t having checks deposited into their accounts where everybody was, at least where I am in New
York, the thought was everybody would be going back to New York in July and August in September. A lot of that has now been pushed forward as a result of the Delta variant into January. So we have sort of gone like this, and now we’re going to be here for a bit. And I think once we see the Delta variant, once we have a sense of how, quote unquote temporary or transient inflation is, once we have infrastructure kicking off and some more clarity in Washington, I think you will see another leg up
MCDOWELL: your dogs behind you, Ali, and we just love it.
MCCARTNEY: He hears you talking about dogs and there is nothing I can do.
MCDOWELL: It’s been a morning for everybody here in the Northeast. So we love seeing our fluffy little ones. Mark, we briefly mentioned the Fed before. Progressive lawmakers are calling on President Biden to replace Fed Chair Jay Powell, who has been campaigning for reappointment. Meantime, in a new Wall Street Journal op ed, Judy Shelton calls on Congress to rein in the Federal Reserve, calling its power unchecked. Your thoughts on the future of the Fed? And my issue is progressives putting pressure on Jay Powell to be more tough, particularly on financial regulations, banking regulation. I just think that it adds a real uncertainty, not maybe about the role of the Fed that investors might be underestimating.
MARK TEPPER: Yes, absolutely. So, look, I think the path of least resistance is to reappoint Jay Powell, like my man, ScotI Market said he’s been right down the middle of the fairway. I think he’s done a pretty good job. I disagree with his comments about inflation being transitory. I think it’s going to be a little longer lasting than that. But that’s a different story. When you look at Jay Powell, he’s got public support from senators on both sides of the aisle, even Janet Yellen, who supports his reappointment. And when you when you try to figure out what the market impact is going to be here, I think here’s what investors need to know. If Powell isn’t reappointed, the Fed’s going to become even more dovish. So that should continue to prop up stock prices. And right now, it’s essentially a two person race between Powell and Brainard. And dig into your point. Brainard is a left leaning enough that she could potentially transform the Fed’s mandate. Right now, it’s all about full employment and price stability. She could align the Fed more with Biden’s priorities on financial regulation and, of course, racial equality. Climate change. Right. But at the end of the day, here’s what I think happens. I think Powell gets reappointed. I think Brainard gets elevated to vice chair so that there’s some extra influence there. And I think you’ll end up getting more regulation in the financial system, probably a bit bearish for financials and crypto. But I think more of the same for everyone else.
MCDOWELL: Thank you so much, Mark. You sit right there, Scott Martin and Alli Macartney, thank you so much for being with us this morning. And hold that dog close, Ali. Much more ahead
MARTIN: Tell him about the Chewy earnings.
MCDOWELL: Yeah, exactly. Much more ahead this morning.