Kingsview CIO Scott Martin discusses recent market pullbacks, how 2021 compares to 2008, and how China’s actions affect the market.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: Let’s go to Scott Martin, a guy who had his tender years when it comes to looking at markets because he knows enough, usually September young as he is to know it’s a problematic month so far, it continues that theme. What do you make of what’s going on?
SCOTT MARTIN: Yes, as young as I am, Neil, I do know my months of the year, so that’s very helpful when we look at old Mr or Mrs. You know, gender neutral stock market here these days. That’s the popular thing to say, I guess, is that there is seasonality involved in markets. Know what’s funny about statistics. I being one a fan of statistics, Neil and how we run our portfolios at Kingsview and in some of our ETFs, you can manipulate statistics. Some people say you can beat them to death. You can beat them to tell you what you want them to do. But the reality is you can change them around to say, Hey, if you take out a month like the terrible attacks of September 11th, if you take out the crash of October eighty seven, if you take out some of the things that are going on with the Gulf War volatility in the markets and 94 the months, don’t look that bad. But what I do like about looking at things maybe more in a concurrent basis today is that there was a little bit of maybe too much optimism there going into the fall here that basically, I guess at least tribulation itself into. Now what we’re seeing in the markets as far as some pullback, some reconciliation, some recognizing that markets didn’t need to pullback, some to get to a level to where buyers were going to come back in.
CAVUTO: Do you worry about what’s happening in China and that it could spread here? I know it’s unique to China. Three hundred billion dollars, you know, vulnerable assets right now. Let’s say it defaults on this payment due Thursday that it could have reverberations here. I tried mightily and you probably have as well to look at any U.S. exposure here and outside of a few, you know, you know, Western bond funds like those from BlackRock and PIMCO, Pacific Investment Management and maybe Ashmore Group. I don’t see that wide exposure, but maybe to the markets if this thing went belly up. It
doesn’t matter. It would have it cascading or a domino effect. What do you what do you think?
MARTIN: It would, and we’re kind of lucky in the fact that China has shut out a lot of our banks from doing so much business over there, especially of late, so the exposure isn’t as bad as it probably could be. Another thing that’s funny about the exposure with China and kind of that systematic contagion effect, Neil, that we saw around the financial crisis is folks and mainly on another network, thank goodness, have been saying that this is like 2008 again, not even close. It’s a lot more isolated. The Chinese government has a history of kind of kind of manipulating and taking care of these companies within their country in weird ways with a lot of force and control. So I do think they’re going to come in and do something to kind of save the bacon here, so to speak, even though I’m trying to cut out bacon off my diet because the reality is that the damage that something like this, it’s hard to do the reality, the damage of this that would expand into the markets. Just as far as general unease, it’s probably not worth the lesson. Let’s say that the People’s Republic of China gets even what you want to call them, want to give the rest of the market or their own market. I don’t think, although President Xi, to your point about where China is, my goodness, man. I mean, these days, whenever he’s speaking, whenever they’re putting out what they’re doing with some of the technology companies over there and certainly some of the things in Hong Kong, it’s very worrisome. What they’re doing on may be more of a grand basis of how they’re handling a lot of the business matters and people in their country.
CAVUTO: Yeah, and I think telling is the fact that China doesn’t care if it hurts them and if it boomerangs on them, that’s pretty bold if you think about it because they’re clearly taking it on the chin as a result of all of this. They don’t give a damn. And that worries me too.
MARTIN: And it worries the markets, certainly. But I think overall, the reality is that these buying opportunities that do occur like days like yesterday, when it looks like the market was going to be down over a thousand points in the Dow today we bounce so far and then everybody’s like, Well, just sell this. Take these opportunities to layer in the positions that you like because longer term, this too shall pass just like the financial crisis did and just like the COVID freak out from 2020 did.
CAVUTO: Yeah, I think Gilda Radner, the late great comedian out of it, it’s always something. Because you’re too young.
MARTIN: Right? I’m a big Gene Wilder fan, something there with the amount.
CAVUTO: Yes, exactly. OK, thank you very much.