CIO Scott Martin Interviewed on Fox Business News

Stuart Varney on Fox Business News interviews CIO Scott Martin on the markets.

8:50

CIO Scott Martin Interviewed on Fox Business News

CIO Scott Martin is interviewed by Neil Cavuto on Fox Business News on the stocks during the Trump administration.

2:27

CIO Scott Martin Interviewed on Fox Business News

Chief Investment Officer Scott Martin is interviewed on Fox Business News on McDonald’s as they fire CEO Steve Easterbrook.

7:15

Nolte Notes 11.4.19

November 4, 2019

The much anticipated Fed meeting came and went with nothing more than a yawn from Wall Street. They didn’t surprise anyone with another cut in interest rates and indicated they would be leaving rates where they are through the end of the year and potentially well into 2020. Fed Chief Powell laid out the circumstances where they would be making additional rate cuts and when they might have to hike rates, which is a bit of a deviation from prior Fed chiefs. The big news was the employment data, which was expected to print well below 100k in new jobs as the impact from the GM strike would shave over 40k from the final print. Surprisingly, payrolls grew by over 120k and the prior two months were revised higher by another 90k. This supports the Fed’s decision to keep rates at their current levels. It also further cements the US as the outlier in the global economy with higher economic growth, strong jobs market and rates still above those around the world. Of course, stocks loved it and pushed to new all-time highs.

There is plenty to like about the current state of the stock market. It continues to trade above its long-term average price, meaning the “bull market” is intact. After spending much of the past six months wandering below all-time highs, the breakout historically has generated double-digit returns over the coming year. The net number of
advancing to declining stocks also hit a new high, indicating the troops are following the generals in the market advance. Finally, many more stocks are beating their estimates for both revenue and earnings than was originally figured a month ago. There is always something to worry about though. Most of the gains in the SP500 have come from the very largest stocks within the index, meaning that while small stocks are rising, they are not keeping up with the largest stocks. The month-end price of the SP500 is 10% above the estimated price for a market trading at a rich 20x earnings, meaning valuations remain very high. Finally, while the employment report was very good, the bulk of the economic data has been coming in below estimates. Over the short run, stocks could continue their march higher, but over the long-term much of those gains could be fleeting.

For all the machinations within the bond market, the bond model has pointed to lower rates for 50 weeks. Low inflation, generally strong bond prices, even in the face of a Fed hiking cycle last year have kept bond investors “invested” even as everyone else was predicting higher rates. Now that rates are once again approaching multiyear lows, we are seeing some signs of a pickup in inflation and a utility sector that is likely gone too far on the upside. The model is comprised of utilities, commodities, short and long-term treasury rates and corporate bond yields. During periods of falling rates, the stock market has historically done reasonably well. Even accounting for the decline last December, the SP500 has averaged an 11% annual rate of return when the model is positive.

As much as the US markets have done rather well over the past year and we have highlighted the dominance of the largest stocks within the index, we are beginning to see signs of other asset classes performing well vs. the SP500. The most maligned asset class has been commodities, which on a year over year rate remain negative. Since the end of early September, however commodities have had a higher return than the SP500. The same is true of international stocks. Both emerging and developed countries have had higher returns than the SP500. The flipside is found in the interest rate-sensitive sectors, like treasuries, utilities and to a lesser extent REITs. Even the much-vaunted growth sector is losing out to the value stocks since the end of the last quarter. We have seen this movie before and it has not ended well for the upstart sectors. At some point, the ending will be different. The duration of the out performance of growth vs. value, international/emerging vs. US and interest rate sensitive will change and will likely last for a few years when it does. While the set-up is similar to a year ago, we are not yet calling for a cataclysmic ending to the year.

Central banks around the world are cutting rates, with the US just the most recent. Historically, lower rates have pushed stock prices higher, however not always for long periods. A shift toward a more diversified portfolio is welcomed, especially after a fairly narrow last 6-8 years. Bond investors, even with a cut by the Fed, maybe toward the end of the most recent “run” and higher rates may be possible over the months ahead.

The opinions expressed in the Investment Newsletter are those of the author and is 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.

SVP Paul Nolte Interviewed on TD Ameritrade Network

Senior Vice President Paul Nolte is interviewed by TD Ameritrade Network on bonds, gold and the US dollar.

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CIO Scott Martin Interviewed on Fox Business News

Chief Investment Officer Scott Martin is interviewed on Fox Business News on Apple, Facebook and Starbucks.

10:45

CIO Scott Martin Interviewed on Fox Business News

Chief Investment Officer Scott Martin is interviewed on Fox Business News on the current markets.

15:59

Wells Fargo Advisor Joins Kingsview in Greensboro, North Carolina

Today, Kingsview Partners both opened the doors to their newest office and simultaneously welcomed their newest advisor partner, Andrew Taylor. “Kingsview could not be more excited to join the local business community in Greensboro”, said Joshua Lewis, Senior Managing Partner.

Andrew joins the firm from Wells Fargo, where he managed over $60,000,000 in client assets. His over two-decade career in financial services ensures he is bringing both experience and knowledge to his new role at Kingsview.

Kingsview continues to be an innovator, transforming the advisory world with the firm’s mission to “Elevate the Standard of Care” and encourage investors to demand more from the industry.

“The firm and our Partners serve the under-served”, commented Sean McGillivray the firm’s Chief Operating Officer. “The financial services sector has done a poor job of engaging clients and delivering on the promises they make. Everyone from senior management, to advisor, to administrative staff believe in our client first approach to business.”

Andrew Taylor and Kingsview can be found at:

101 Centreport Dr., Suite 140
Greensboro, NC 27409
O: (336) 281-9847
E: ataylor@kingsview.com
www.kingsview.com/advisor/andrewtaylor

Wells Fargo Advisor Joins Kingsview in Greensboro, North Carolina

Kingsview’s newest Partner Richard “Rich” Polson has joined the firm as of October 24, 2019. After earning his MBA, Rich has worked in the financial services sector for 17+ years at various firms, most recently advising clients at Wells Fargo out of their Greensboro, North Carolina branch where he managed over $170m in assets.

Mr. Polson’s entrepreneurial mindset and desire to put clients first is in perfect alignment with Kingsview’s client servicing ethic and independent platform. His ongoing passion of helping people identify their goals and plan for their financial future makes him a uniquely qualified advisor partner who will carry on the firm’s mission to Elevate the Standard of Care.

At the new office in Greensboro, Rich will continue to deliver measured and personalized advice to his clients, embracing the firm’s no-nonsense approach to advice, investment management and financial planning.

“Kingsview is extremely excited to welcome Rich as a partner to our firm,” noted Chief Operating Officer Sean McGillivray. “Our industry has done a poor job of engaging clients and delivering on the promises they make. Rich’s genuine honesty and strong desire to put the interest of clients first will continue to advance our desire to transform the industry.”

Kingsview’s Greensboro, NC office can be found at 101 Centreport Dr, Suite 140 and can be reached at (336) 281-9823: rpolson@kingsview.com, www.kingsview.com/advisor/richardpolson

Nolte Notes 10.21.19

October 21, 2019

Christmas came a bit early to Wall Street. Word of a trade deal 1.0 and possible Brexit “solution” put to rest the worries over ongoing global issues. Since we are in football season, there have been replays from the booth on both counts. The trade deal is merely for some agriculture that China desperate needs. Not much benefit from
the US side and more tariffs are expected in December. Brexit has to make it through Parliament, which as of Sunday has been voted down. The equity market’s response has been merely a yawn. Finishing the week slightly higher, it has struggled to get above 3000 and stick. Earnings have been better than expected in the early going, but the bulk of earning should be coming in another week. Finally, the economic data was a bit weaker than expected. Most notably has been the consumer buying a bit less at the stores, with retail sales below estimates. Retail sales have been stuck in the 1-4% range for the past seven years, except for the year following the tax cuts. This has left investors playing with the Christmas boxes this year.

The SP500 3000 level has been a barrier for much of the past few months. Since first hitting 2950 a year ago, the market has struggled to get momentum to get meaningfully above 3000. The fourth quarter last year was nearly straight down to 2550. April of this year saw another decline toward 2750. Each decline has been met with an advance, but with fewer stocks participating in the rally. As we highlighted last week, less than 65% of stocks are above their short-term average price and about the same above their long-term average price. Given that stocks are so close to all-time highs, we would expect well over 70-75% above their average price. Individual stocks making new highs have been historically low as well. The best the markets could do was 115 new highs last week, well below the levels of just six weeks ago. The narrowing of the market advance indicates to us that the future will be rough. Until/unless stocks can rally well above 3000 on high volume, we could be stuck in the year-long trading range.

Bond investors are anticipating another Fed cut of interest rates when they meet at the end of the month. The discussion by various Fed officials is that they are in “wait and see” mode and are talking more like they could stand pat in 10 days. Certainly, the US economy is slowing, but it seems to be the result of trade “wars” with both China and Europe. The Fed is not going to “fix” trade by cutting rates. However, given the low and negative rates around the world, the US stands out as the highest yielding sovereign bonds around. Hence the interest from global investors, which is pushing the dollar higher and our rates lower still. It is going to be difficult to get interest rates back to a “normal” level anytime soon.

Given the modest move in the SP500 over the past week, it shouldn’t be a surprise that the industry groups remain stuck in their ranges. One notable exception has been the international markets, which are benefiting from a decline in the dollar. As we highlighted in the rate section above, the higher interest rates in the US are attracting capital from around the world to purchase US treasury securities. This creates a stronger dollar as investors have to buy the dollar to buy treasuries. As long as there is confidence in the US, relative to other markets, investor’s money will flow to the US. That may be changing as international and emerging markets are beating the returns on “domestic” securities in October. We have seen this movie before, as international wins for a month or two only to roll over and get kicked by the SP500. International is very inexpensive vs. the US and should, over the long-term, beat US stocks. But it will require investors to recognize that difference and begin shifting their investments. Similar to bond investors, global investors perceive the US to be the “safest” investment around the world.

Another assault upon 3000 for the SP500 may be at hand yet again. Fewer stocks are participating in the rally and could be a signal that we are closer to another market correction. Bond investors will be watching the Fed meeting in 10 days for additional signals that they continue to act as a backstop to the US economy.

The opinions expressed in the Investment Newsletter are those of the author and is 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.