Kingsview CIO Scott Martin discusses consumer confidence, and whether the public is interested in buying goods and services. He also talks about how investors tend to forget about the ups and downs of the markets when things have been very strong over a long period of time.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: Let’s go to Scott Martin, another gentleman for whom money is no object, and taking a look at these developments, it is interesting in the middle of a pandemic, no less right that people will spend on the money and the money for the things they really want and apparently fancy. Schmancy car is what they wanted, right?
SCOTT MARTIN: It is, Neil, and that’s a sign of a pretty good economy, frankly. I mean, that’s a sign of a strong consumer, a consumer that wants to go after things that they desire. I mean, Neil, you and I can remember some, some bad times in the economy, some difficult recessions where you didn’t want to buy anything, let alone maybe food or gasoline. So it goes to show you that that this consumer, even though, yes, there are some fits and starts to this recovery, this consumer is at the core, relatively confident and relatively aware of what they want to do with their money when they have it. And that is to buy goods and services.
CAVUTO: Scott, what has been going on with the markets this second week now of the new year, where we’ve lost a lot of ground and technology stocks. We’ve seen the Nasdaq come close to correction nine percent. Others within the S&P 500 are well into correction territory or worse, so the churn beneath the surface is real. Is this the year at all? Slows down? Reverses what?
MARTIN: This is the year it may feel like it’s all going to reverse, but I don’t believe it is, Neil, and this is a cable show, but let’s still keep it relatively clean for our young viewers. I think as investors, Neil and certainly as money managers, we forget that the markets do this. We’ve had a really easy slide the last couple of years, aside from, say, March of 2020 and into April. I mean, things have been relatively calm and we’ve had a lot of support from the Federal Reserve. We’ve certainly had a lot of support from D.C. and the Treasury Department. Some of that support is changing now. Yes, some of that is rolling over to the aforementioned consumer, as we discussed and
businesses as well as they get back online and hopefully get the workers back in place also. So there’s that handoff now happening to companies that are going to make earnings and consumers that are going to spend. So that’s not an easy hand off sometimes, certainly when it’s coming from, where we’ve been to where we are now. So in our opinion, I think the market still likely goes up from here. It’s just it’s likely that a lot of these stocks you mentioned in tech land, whether it’s the Docusigns of the world, the Zooms, the Costcos, the Home Depots, the Adobe’s the apples, the Amazons, I could go on and on the Microsofts, they’re all over the place. A lot of those companies, Neil probably got too far, too fast. And so they’re likely to come back in some the markets going to shoot first and ask questions later. So they’re going to get oversold just like they got overbought. But that’s as a long term investor, a great opportunity for us as money managers to go out and buy these names at depressed prices for the long term.
CAVUTO: You know, it’s very hard after three double digit advances in the averages for three straight years to think it can happen for a fourth year. But we had seen strength continue. Maybe not to that degree. What are you looking for this year? It’s very early. I grant you and there are a lot of variables I grant you that as well.
MARTIN: We’re looking for companies to match or beat earnings reports, and really that’s I think the stress point here that a lot of folks are kind of trying to handicap ahead of really the data that’s likely to come out in the next couple of quarters. And by that, I mean, we’re starting to come into these earnings seasons now mainly more towards Q3 and Q4 of the upcoming year here, where companies are going to have to compare year over year results against results that are pretty darn good, say, back in twenty twenty. So the reality is in twenty twenty one, certainly as we saw last year. So the reality is companies are going to have to do better. They’re going to have to do better. Maybe with less. We’re going to have to get a lot out of worker productivity going forward, which is certainly a head scratcher now seeing how the labor market is behaving. So companies, as they deliver these results, as we start to get, say, Q4 earnings coming out in the next couple of weeks, it just starts the earnings season here very soon. And then we go into subsequent quarters after that. Companies are really going to have to get innovative. They’re going to have to get creative on their bottom lines to show that they’re worthy of the prices that they’re trading at. But the market ahead of time is already knocking a lot of these companies down in price. So therefore, in our opinion, they’re already getting down to reasonable levels levels where they’re appropriate for investment entry.
CAVUTO: All right. We’ll see what happens. Catching up with you, Scott Scott Martin, the Kingsview Asset Management CIO.