Kingsview CIO Scott Martin discusses oil prices, what gas prices might look like this summer and the possibility of fossil fuel creation in the US.
Program: Mornings with Maria
Station: Fox Business News
MARIA BARTIROMO: And it is time for the word on Wall Street. Top investors watching your money join me right now. Strategic Wealth Partners President and CEO Mark Tepper. UBS Financial Services Private Wealth Advisor Ali Macartney and Kingsview Wealth Management Chief Investment Officer Scott Martin. Great to see everybody this morning. Thank you so much for being here, Scott and kicking things off with you with this massive move in the price of oil. Crude traded as high as one hundred and sixteen dollars a barrel. That was the highest since 2008. We know that OPEC had their meeting yesterday saying that they will maintain an increase in output by 400000 barrels a day this month. That was lower than a lot was a lot of people were expecting. And yesterday I spoke with the power the future executive director Daniel Turner, about what he expects from the oil market. Listen to this.
DANIEL TURNER: One hundred and fifty easily. And if we do ever put sanctions on Russian oil, which is doubtful, but if they actually did, I think $200 a barrel oil is not impossible, and that will be devastating to our economy, to families.
BARTIROMO: Scottie, your reaction?
SCOTT MARTIN: I’m freaking out. You’ve been talking about it all morning, Maria, with some of the guests about just unlimited was a number that Donald Trump threw on there. And as you talked about with David earlier in the hour and five o’clock, the numbers are at least probably one 50 plus. He’s just heard from Daniel Turner there. So it’s scary. And it reminds me of a set up kind of similar to 2008, when oil prices spiked and then we had the economy get trashed. Now that was also on the back of the financial crisis, of course. But don’t forget that summer and how tough it was and how we’re coming up to a summer here when we’re coming out of COVID or we’re lifting the veil. The economy supposedly so great. Yet we’re going to be hitting summer driving season with with prices at seven or eight bucks a gallon. So the issue that I have more is the fact that you’ve been talking about it. Deggans said it earlier today, too. There’s just no plan as far as what this administration is delivering. The outlook is poor when it comes to any kind of support for fossil fuel creation here in the United States or utilization. And therefore, unless they come up with something different, this is definitely got a ticket to one 50 plus and possibly an economic recession not soon thereafter or very soon after.
BARTIROMO: Well, you know, you look at this week, Ali Oil this week alone is up twenty four percent. That’s just the week and the Federal Reserve obviously watching closely. Jay Powell yesterday on the Hill. And by the way, he’ll be back on the hill today. He will say much of the shame that he said yesterday, and he proposed a quarter percentage point rate increase at the central bank’s next meeting that happens in two weeks. Ali, as you know, this hike is lower than what much of the market was expecting, right? The market was pretty much pricing in a half a point hike in that meeting in two weeks, and it comes as inflation is at a 40 year high. Your reaction?
ALLI MCCARTNEY: We have had a ton of intra day volatility, but in the fixed income market and the equity market and coming into late last week, as you said, there was an overwhelming likelihood of a 50 basis point increase in March. At least that’s what the markets are forecasting and that was taking down all of equity markets, but especially growth stocks for all of the reasons that we we discussed every morning. So yesterday’s commentary was very meaningful in terms of being whether you use the word dovish, conciliatory and basically what he came in and did as you referred to it, the Powell pivot. I like that. Was he sort of xed out the noise that you’ve heard from other Fed governors that would allow people to get concerned about an aggressive interest rate policy that would crowd out growth, especially with this highly uncertain environment? And that’s what the market was looking for. So that’s why you had yet another one of these sort of about-face midday where you went from markets being, you know, really in the red to afterwards in the green. I think all the market wants to hear as it has been true all throughout the COVID period is this continued, we understand markets are uncertain. We understand situations are uncertain. We are being nimble, we don’t have a, you know, a preset plan. We are going to adjust. We have an eye towards inflation. We understand what’s going on in the market and the threats there, and we are going to address those as opposed to making, quote unquote another policy mistake.
BARTIROMO: Ali, is there an investment play here? I mean, I know the negative implications of one hundred and sixteen dollar oil, but do you want your own energy stocks here? It’s been one of the best performing sectors in the last year.
MCCARTNEY: Yeah, so look over the last couple of days, especially on on to on Tuesday. Cyclicals, so largely energy, financials, even industrials. So all the sort of reopening value players went down. So we are at lows that we haven’t seen in a very long time. We actually did take our our S&P numbers down just given what’s happening in the market and the massive uncertainty and the intricacies and interconnectedness of it. But we still see an S&P at forty eight hundred by the end of the year. And you know, individual investors have the benefit of not having to trade everyday, being able to hold long term. So I think that’s the place to go. I think industrials, financials, energy, we should be picking up here for sure.
BARTIROMO: Yeah. And Mark Ali’s taking her expectations down for the broader economy because of the impact on oil. Is it going to have an impact on jobs? We’re getting the weekly jobless claims out in an hour and a half. We’ll get the jobless claims out today and tomorrow, the jobs report. Economists are expecting 400000 jobs added to the economy in February. The unemployment rate ticking lower to three point nine percent. Does the oil shock hit the February jobs report mark?
MARK TEPPER: I don’t think so, not yet. And look, if we look at adding four hundred thousand jobs in February after like four hundred and seventy thousand in January, if the Fed really has a dual mandate, that’s the green light to follow through on their commitment to hiking rates so that they can fight off inflation. And look, my overall take on the jobs market right now is that it’s actually too strong. I think it’s overheated, and I think that eventually begins to hurt margins. And right now, if you think about it, the employee has pricing power over the employer. It’s a it’s a zero sum game right now where companies, they’re poaching talent from their competitors, they’re paying substantial premiums of like 20 percent, 40 percent. And those pay increases are not one time bonuses, they’re permanent. And the issue is you’re not getting talent that’s 20 percent or 40 percent more productive. You’re just paying more for the same productivity. And that, to me, just seems to be unsustainable. It seems like big companies are eating small businesses alive. And let’s remember small and medium businesses employ 50 percent of the private workforce. So how is a small manufacturing company supposed to hire someone at 12, 13, 14 bucks an hour when that same person can go to Amazon for 18 bucks? Or Target? Just recently committed to getting to twenty four bucks an hour over the course of the next couple of years. So the big get bigger, the small go extinct. And I don’t think that’s a recipe for success for our for our country, but
BARTIROMO: it’s a great analysis really pointing in and zeroing in on that and that jobs turnover. Ali, Makani, Scotty Martin, great to see you both. Thanks very much for the wonderful work on Wall Street. Mark Tepper, you’re sticking with this all morning and we’re grateful for that.
Kingsview CIO Scott Martin discusses how fear in the market can translate to the creation of the best opportunities for an investor. He also talks about the contagion effect, European lenders and the bond market.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: I like to bring in Mark Tepper and Scott Martin, the Scott, you know, let’s I am excited about the market the way it acts, particularly over the last week. I do agree. I think we bought them on January 24th. Your thoughts on that and also obviously the daily grind, though of of having to even try to come off the canvas it does wear on you.
SCOTT MARTIN: It does it’s hard some days to come into work, believe me. Charles, as you see, seen futures down and then down further on the open market at 8:30 central time. It’s like you and Jim talked about, though it’s OK to be fearful here as an investor, as a money manager like myself. But fear is a creation of the best opportunities for an investor going forward. It’s just you have to buy one a lot. A lot of others are selling. It’s always darkest before dawn. And when you get these flashes like you just talked about with Jim there, these are times you’ve got to come in and try to catch a falling knife for two. And yes, your hand will get cut a couple of times, but there’ll be other times you’re going to catch the knife right on the handle and you’re going to take it up in the air. And so those are things that are worth the risk, in my opinion here, especially as we approach very oversold levels.
CHARLES PAYNE: I don’t know if I wanted to play the market or join the Green Berets. Are you as you were talking, you know, of course, Marky Mark, you’ve been cautious in this market for a while now. So what in your mind it could still be the downside risk? And really, ultimately, what would you be looking forward to become more opportunistic?
MARK TEPPER: Charles, I think the biggest risk right now is that obviously the war drags on, drags everyone into a recession. You know, and I can’t predict that I can’t handicap that. But what I’m watching very, very closely to give me kind of an indicator as to when it’s time to start getting back in is growth versus value. We all know value clobbered growth over the last year, but just as this war started to really kick into higher gear last week, it looks like that trade might be on the cusp of turning. You know when growth is abundant like it was last year, fresh off all those skinny checks, value stocks work, but when growth is being revised downward because of this Russia Ukraine war, investors again are willing to pay a premium for growth. So at this point, it’s too late to be chasing value stocks. I’d rather pick off good growth stocks as they’re beginning to turn.
PAYNE: And to that point, Scott, one of the favorite areas you know, outside of energy, the energy trade right this year, the financial part of that now maybe some today has something to do with bond yields, but it also feels like there could be something looming out there. I don’t know, maybe something with Russia, maybe a long term capital management, but financials are taking it on the chin. And I agree with Mark that value in general is extremely expensive on a relative basis. So where does that leave you?
MARTIN: Probably a little a little worrisome when it comes to financials because of rates, in my opinion, I think that contagion effect is so overplayed. I like some of the early Paris Hilton songs that I used to listen to. I mean, it’s kind of like, you know, the rates are something that’s obviously going to affect the net interest margin. But if you look at this contagion effect, Charles, we heard this before with Evergrande in China. We heard it with the Greek debt crisis. We heard obviously in the financial crisis, which proved true. But there’s been so many other issues that have been this contagion effect on banks that really haven’t come through. And so I don’t believe this is another case of that. Maybe that’s more of a European lender issue, which definitely could bleed over the United States a little bit, but I don’t think that’s a big effect. So I actually don’t want to touch financials here, but they’re going to get to a point as rates continue to plummet because the bond market is, in a word, freaking out like Lindsay Lohan used to do. So therefore, you’ve got to look at finances here as a bargain at some point on that value of trade that Mark talked about. All right.
PAYNE: So let’s talk about either what you guys are buying or what’s really high on your potential buy list. Let me start with you, Mark. What are you looking at in this environment? I know we talked about the parameters. What’s looking enticing and intriguing are the specific names rising to the top.
TEPPER: Yes, so I’m buying travel stocks, so I think there’s just a ton of pent up demand for travel, and I’m really hoping President Biden may give everyone kind of that all clear signal tonight. So I bought some delta below 40 bucks. That’s my favorite airline, and I just bought some Airbnb. I mean, if you go back to early 12, 20, 20, pre-COVID, it was over two hundred bucks a share and now it’s like one hundred and fifty bucks. Last quarter was good. Forward guidance was pretty strong and I’ve been hearing more and more from people that hotel kind of people are now opting to stay at homes like Airbnb, so that’s good for them. So I would be buying travel stocks.
MARTIN: Yeah, I like pipelines here, Charles, trying to take advantage of energy, just not so much on the XL, but looking at the transport of the actual commodity and just a quick note about tap here, Mark Tepper if you’re playing at home. I mean, mark, the way you’re talking, you and I might take some trips together here going forward. So I do like travel as well. We own booking dot com, BC and G.
PAYNE: All right. Great conversation, guys. Thank you both very much, Mark and Scott.
Kingsview CIO Scott Martin offers a reminder that many investments are long-term, and to keep a focus on investing in good companies. He also talks about The Fed, government stimulus, and the 2008 financial crisis.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: As you can see, as Mark was speaking, I’m not blaming this on Mark, take a look at the corner there. What’s going on at the corner of wall and broad with the Dow down session lows right now almost 530 points? Scott Martin The market clearly doesn’t like the uncertainty around this, and it’s selling first, maybe asking questions later. It has a history of doing that, but what do you make of its behavior?
SCOTT MARTIN: It’s exactly what you said, it’s self first, and I hope ask questions later, I mean, eventually there will be questions to be asked and maybe some answers. But I’ll tell you, Neil, that the market we forget this, though, is investors and money managers. Sometimes the market gets emotional at times, kind of like humans do, I guess. And I think as humans are involved in it clearly, and I think there’s just as an investor, you have to remember that a lot of investments that hopefully you’re making are long term in nature. You’re hopefully investing in good companies as we are at Kingsview. So as much as it sounds crazy, I like days like today, believe it or not, I mean a sliver of them, because you can find value in companies that are very good, that are doing very good work like Home Depot, for example, very good earnings report recently, and they’re getting smashed today. And you can buy these companies at discounts because they will go up again when the smoke clears.
CAVUTO: All right, you know what, the Dow’s fall today, I think we’re close to down eight percent this year on the Dow, over 10 percent on the S&P, which would be obviously a correction. We’re close to 15 or 16 percent of the Nasdaq or at a bear market when it gets to 20 percent. This cascading continues, punctuated now and then by some days where people are calmer, but it’s like a drip drip effect. What do you make of that?
MARTIN: It’s hard to take. I would like my I’d like my drawdowns fast and furious, frankly, you know, but they don’t come like that, you know, the elevator kind of goes up and down when you’re in the markets and you have to be ready for these times. I think the one thing, Neil, that’s happened in the last couple of years with respect to recovering from COVID and all the government stimulus, the Fed help has been that we haven’t been used to periods like this very much. Or at least they were very short lived, but they happened. In fact, if you look over the history of markets, you know, I’ve been around for for quite a bit of time, maybe more than yourself, even though you look about, you know, 10 years younger than me, frankly. And it’s like there are times that we remember in our careers. I’m telling you when times do happen like this and what you have to do is remember with the long term is remember that these are just as natural as upward sloping markets. And there are times when you need to get into stocks and get into investments that are pulling back a little bit because that’s better than buying them high and chasing high prices.
CAVUTO: You know, it’s interesting, though, because we’re so focused on sanctions against Russia and particularly Vladimir Putin and his rich buddies. And I’m just wondering that can have a reverberating effect that doesn’t necessarily mean you go slow on the sanctions. But when we’re hearing from HSBC in Europe, the market contagion saying that itself, it’s a British bank, but that it will be saying this, but saying that European banks are disproportionately exposed to Russia and I think mentioned is the Dutch lender Engie is RBI, a number of other banks in Italy and in France that would be impacted with a freeze in moneys going to and from Russia. And that that I think the gist of what HSBC is saying it will spill over to all financial players. What do you make of that?
MARTIN: We’ve heard a lot of that since 2008. That was the big contagion effect, remember back in 08 with a big financial crisis. I mean, we’ve heard that a lot though, haven’t we remember the Greek debt crisis, which seems so far, long ago. It’s like six years ago that was going to be a big deal and that was going to be this big contagion that didn’t happen. Evergrande, which was the big China real estate company recently, there was going to be this big contagion in Asia. From that that didn’t happen, at least hasn’t yet. Look, banks that have exposure to Russia, that’s overly so as far as their balance sheets, they can do that at their own peril. I don’t know why they would do that to begin with as good business practice. But that notwithstanding, there is always a concern of spread. There’s always a concern is contagion, in fact, because it triggers this thing in our minds. Back in a way. But I think banks and hopefully their management are a lot smarter these days and a lot better capitalized these days to be able to stem some of the spread that happens with that. But it’s one thing that you have to consider when you’re looking at the advance of what’s going on with Ukraine and Russia, and God knows what else. But there’s things that are going to go on that are going to make folks say that. But I believe that there’s enough, let’s say, safety or sanity in the system to at least prevent something like 08 like we saw when that happened with our banks here.
CAVUTO: All right, thank you, my friend. Scott Martin, who’s actually he’s young enough to be my son, but that’s OK. I like it when he says good things. Scott, thank you very, very much.
Kingsview CIO Scott Martin discusses emotion in the market, supply chains and what’s happening in the Ukraine. He also talks about pullbacks in some areas and why when things get resolved, you should expect a snapback.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: Luckily for us, we have three of the best. Scott Martin, Erin Gibbs and Jim Awad with us. So let’s take these issues one by one. I want to begin with you, Jim, my longtime friend. You have seen quite a few geopolitical events in your career. Is the market overreacting right now to a potential Russian invasion of Ukraine?
JIM AWAD: No, as you said, the market dislikes uncertainty once once the market understands what’s going to happen and what the parameters are, it’ll make the economic adjustments and normalise through. And that should happen in the next couple of weeks. But right now there’s there are too many wide variety of scenarios. What I would say is if this is confined, confined to Ukraine and doesn’t spread beyond that, it will fade into ancient history over the next few months.
PAYNE: Erin, I think it’s going to be confined to just a portion of Ukraine, just so maybe annexing it’s going to be tense. Obviously, 190000 troops built up. But how much of this market then rebounds? I mean, how much of a rebound could we see in a couple of weeks to Jim’s point?
ERIN GIBBS: Very quickly. Very fast. If you look historically, I would actually say that the market is overreacting because it really doesn’t have a fundamental impact on, you know, over 95 percent of the economy and certainly all public trading companies, it has very little exposure. So where we really need to think about, it’s more of an emotional toil. This happens almost every time there’s an escalation, whether it was Iraq, whether it was North Korea. The market likes to overreact, and these things tend to resolve themselves very, very quickly. Even if the US is directly involved. So because we’re not even involved, we’re not even talking about using military force. I think that means that this is going to snap back even faster.
PAYNE: All right. So let’s talk about the supply chain and inflation. The market was trying to get a little traction this morning. I mean, that’s all we’ve seen every morning. But today it was GE. They warned about supply chain issues. And of course, they’re not the only company that’s mentioned that or inflation, Scott. You know, I want to get it. Get back again to the way these stocks have been reacting, particularly how severe it’s been. And I got to be honest, there’s a part of me that thinks this also might be overdone. Inflation will be resolved. Supply issues will be resolved. Why are they destroying the value of these companies?
SCOTT MARTIN: Because the market’s emotional right now, Charles, and they’re doing the shoot first. Ask questions later. I mean, to your point, these are all the supply chains that are out there. The problems we already knew about them. I mean, this is like old news. This is a story from like August and September of last year and now the market’s paying attention. I mean, I would tell you, Charles, that we talked about a couple of weeks back, like in chip land, for example, in Virginia and Taiwan semi like whatever’s going on in Ukraine. Do you think that affects chip production for those companies in different countries? No. So the reality is when you get pullbacks in some of these areas, Boon Brands, Darden Restaurants and two more of my picks that we’ve made together, Charles like that does not affect their business. So when you see pullbacks like this to Erin’s point, when this does get resolved, they’re going to be a big snap back and you better be in those names.
PAYNE: You read down a little further. In my script, I was going to give you your shout out for Bloom and we’ll get back to that. I took it OK. It does bring us, though, to the Federal Reserve. And the big question, of course, is are they up to the task this morning? Charles Evans said policy was quote wrong footed and needs substantial adjustments. Meanwhile, you have Loretta Mester yesterday saying that financial stability that if it becomes a concern, the Fed will slow down the pace of balance sheet reduction, by the way, they have been started on that. So, so Jim, let me go to you on this because just moments before I came on there, we heard from Evans, who said distinctly, he’s only got twenty five basis points. I’m really in the camp now that they’re going to go 50, but since we’re so confused, is that helping or hurting?
AWAD: Yeah, well, there are so many Fed speakers, and they’re contradicting each other because they have different opinions and they’ll get together in four weeks and they’ll decide. But what I would say is since nobody’s raised the terminal rate and since long run inflationary expectations remained under control. The faster they do it and get it over with, the better. So I personally would prefer 50 because it gets you closer to the terminal rate and with the market needs is to be able to see over the horizon and where this is going to end.
PAYNE: You know, Aaron, of course, yesterday when I’m listening to Mr. She spoke at NYU. It was pretty clear to me she’s saying the Fed put is alive and well if they start to see it disrupt the economy, which is to me, a euphemism. The stock market goes down much more. We’ll put the brakes on.
GIBBS: Yeah. You know, I think we’re we’re we’re we’re calling for the Fed to make a big action on this next on this March meeting. I think honestly, the bigger scare or the bigger fear should be when they’re trying to unwind this how quickly, whether they overdo it. So I think the market’s going to react positively to any action. Initially, it’s more when they change direction. That’s the tough part. And they frequently mess up coming out of a new direction, not going into it.
PAYNE: Let’s talk about the the Nasdaq because it continues to take it on the chin technology in the absolute freefall, Erin. I want to go back to you because last time you were here, you actually talked about how extreme the dip had become. Certainly, it’s only gotten worse since then. What do you make of this and when do you become a buyer?
GIBBS: So actually, at the end of January, I was a buyer of mid-caps. I think so. I’m not so focused on technology, just the smaller valuations. Because right now, smallcaps and midcaps are trading at a discount to mega caps, the large caps. So they haven’t hit those lows, they haven’t become, but they’re starting to look much cheaper, the Dow and a lot less than the large caps today. So I actually feel that that’s one of your defensive positions is just buying the avoiding the mega caps and buying smaller down in your in your market cap spectrum.
PAYNE: Well, what about you, Scott?
MARTIN: Yeah, I agree. In fact, if you look in the last few days, Charles admitted small been outperforming pretty well. And that’s really a good sign because to Erin’s
point, they were lagging quite a bit. I mean, the relative valuations got way out of whack. The only thing that I have an issue with, though, is that small caps and mid-caps have shown to be very volatile and other times. So knowing what you know about that going into it, just be ready for some volatility here as the market works itself out, it’s got.
PAYNE: Now let me give you this your props because you deserve them. You did mention restaurants. You said specifically to focus on Bloom and having a real nice day to day. Is this all about the reopening?
MARTIN: Sort of. You know, it’s funny. Bloom and Outback Steakhouse, how could we forget Darden Restaurants is in that mix, too? Charles, they’ve reinvented their business. So now those two companies are ready for either reopening or almost a re closed. I mean, they’ve done the delivery pick up ghost kitchens. So they’ve really revamped their business to really operate well in any environment. But to reopen certainly helps those guys. Yes, and we own them.
PAYNE: Jim, it’s been tough sledding overall and it’s been interesting because it’s been tough sledding for bonds and for stocks and we’re both being hit. Many people wonder, where do you put your money in this kind of environment?
AWAD: Well, it never pays to bet against the US economy and equities over the long run. So I would use this at these periods of weakness to accumulate shares in the higher quality growth companies that have that have earnings and good balance sheets and editorially stocks like Taiwan Semi and Microsoft and Apple. And then I barbell it with some high alternative, high yielding instruments. I happened to be using Aries Capital, but there there are some good non-volatile lenders out there that are yielding seven or eight percent. If you marry that well with growth stocks, I think you’ll weather this period just fine.
PAYNE: Still frisky after all these years on, Jim, I got less than a minute to go. Aaron, the last word to you.
GIBBS: You know, it’s it’s it depends on your business, and I have some clients that are so scared of these types of downturns that will put them in a very short term floating rate where you’re just is essentially cash plus. So that’s an option, but I prefer to roll out the storm. I think it’s very hard to get back in and time when you’re going to get back in on on the shorter term dips. So I’d say that most maybe switch a little more to value to get you through the next two weeks. But overall, again, I agree. Don’t bet against the U.S. economy or the U.S. public equity markets, they’re going to turn around.
PAYNE: Absolutely. They’ve done it for a couple of hundred years. Aaron Jim Scott, I couldn’t ask for a better panel. Thank you both very much, but thank you, all three of you very much. Appreciate it. Sure. All right, folks.
Kingsview CIO Scott Martin discusses increasing inflation and whether numbers will go to double digits. He also talks about the stimulus’s effect on the labor market and what that has meant for the economy.
Program: Cavuto Coast to Coast
Station: Fox Business News
DAVID ASMAN: Well, a tired of paying higher prices for groceries, don’t expect your weekly bill to get any cheaper thanks to what’s happening with Russia. John Catsimatidis weighing in earlier this morning on this subject. Listen.
JOHN CASTSIMATIDIS: The prices you see on your shelves and the prices you see at the gas tank right now are the prices when oil was seventy five dollars a barrel. It has not reflected when President Putin has started to pot. He stirred the pot and pushed the price up to 93, 94 95. You’re going to see massive increases in late February and early March. And like I said, to friends, fasten your seatbelt. That’s going to happen because this is part of an international threat.
ASMAN: He not only knows about grocery markets, he also knows about the oil business. He’s in that as well. Reaction now from Kingsview Asset Management CIO Scott Martin and Chavez CEO Rob Luna. Good to see you both, gentlemen. Thank you for being here, Scott. Where do you see inflation going from here?
SCOTT MARTIN: Higher, David, but at a slowing rate, and that’s something to keep in mind is that I think a lot of the initial shock from inflation is probably past. That doesn’t mean it’s not going higher, but it is slowing at an increasing rate. I guess if that makes any sense, the rate is slowing, in fact, as of the increase. But here’s the one thing that is concerning. I mean, we heard from Brian Deese earlier in the hour here, and it’s just, you know, Joe Biden doesn’t even know how much a pound of ground beef costs. Obviously, he still may not know. I mean, he does talk to friends to obviously figure that out. But with regards to some of the support that Biden is receiving from his economic advisers, I don’t think they’re helping him out very much. And it’s not just ground beef, it’s sugar, it’s grains, it’s wheat. It’s all the things that go into the processing of food. And we also have transportation issues, too, among all the other things that we’re concerned about. So the government is way behind on this. It’s not a fed problem, it’s a policy problem, and it’s probably going to get worse before it gets.
ASMAN: Before I go to Rob, Scott, I want to. I didn’t get a specific answer. I just want to focus in on how much it might go up. You say it’s still going up. We had the wholesale prices up almost 10 percent, nine point seven percent. Wholesale prices eventually reached the retail level and US consumers. Do you think we’re going to go to double digits?
MARTIN: Yeah, we will. But what will happen, David, is we’ll get to double digits and things will start piling up because let’s face it, some of the rates of inflation that we’ve seen up until now, especially in the early months when it really started popping, were unsustainable. So it will get better, but it will get worse before it gets better.
ASMAN: Double digits. We haven’t seen that a long time. Rob, a lot of investors are looking at the stock market, even though it’s down today. Right now, they’re thinking their trades to be made, and I’m sure there are trades. But Warren Buffett, back in the days of high inflation 1977, said the following If we can put that Warren Buffett quote up if you feel you can dance in and out of securities in a way that defeats the inflation tax, I’d like to be your broker, but not your partner. Did he get it right and is does that still hold true?
ROB LUNA: Yeah, I think so. Look, inflation hurts everything, right? You’re seeing rising labor costs. I mean, you know, Scotty’s Captain Crunch diets really in a lot of trouble right here. If you look at corn prices, what’s going on? Things are not going to get any better any time soon. If you take a look at what’s going on to Scotty’s point, though, look, a lot of people are blaming the Fed. We heard that before the Biden administration has done just about everything wrong to ignite this bubble that we’re seeing right now, starting with the nomination of Powell. Traditionally, that’s done June July. He waited all the way to November. So the Fed really didn’t want to move ahead of that. We saw that he’s out there yelling at reporters now because the fact that he got it wrong, they’ve done everything incorrectly, but you’re already starting to see cracks. David, if you look at the higher end of the high income, sorry, home prices, those things are starting to come down. Things are slowing down across the board. The supply chain will reopen. So to Scotty’s point. Yes, it’s going to be transitory, but that’s already after the, you know, the cattle is out of
ASMAN: I want to stick with. I just want to say, I just want to push back a little bit on Iran because they did wait too long. Isn’t it fair to say that the Fed waited, too? Sometimes there’s a momentum that has built up with inflation that becomes almost unstoppable. I’ve seen it happen not only here in the United States, but all over the world. I’ve seen it happen in dozens of countries in Latin America and Eastern Europe, et cetera. They they did get behind the curve in terms of raising rates. And now there’s still I mean, let’s face it, they’re still monetizing the debt, they’re still buying treasuries and printing money to do that.
LUNA: Yeah, I completely agree with that. But that being said, I really think that a lot of this would have started in the fourth quarter of last year versus what they’re doing right now. And really, what they’re doing, David, is they’re just following the tape. You know, they’ve already priced in 75 basis points, at least 50 basis points into this market, so they’re well beyond where they need to be. But I think to let the Biden administration off the hook and try to say that there’s not any pressure that’s being put on this spending
ASMAN: Yeah, no. And Scott, obviously that’s the point. Spending money you don’t have is the cause they’re always talking about. Causes the root cause of inflation is spending money you don’t have and therefore printing it, and that causes more inflation, that is the beginning of all this, isn’t it, Scott?
MARTIN: Sure. And we never had it, David. So that goes back many years, even maybe decades. But the reality is there’s also some poisoning. As you guys know, that’s been done to the labor market here with all the government stimulus that came out and basically encouraged people not to work. So, David, they really messed up the growth trajectory of this economy because it’s OK if you borrow debt, like, that’s not a bad thing. But if you’re not going to pay back the debt, that’s something you need to be worried about.
ASMAN: But Rob, here here’s the point that my buddy Art Laffer makes, which is that in the early 80s or late 70s going into early 80s, because because Volcker was actually appointed by Carter in the late 70s, he had to put interest rates above the rate of inflation to get inflation under control. That would mean we would have a rate of of 10 percent or so if we get double digits inflation. Even more than that, I mean, we had interest rates of of over 20 percent in order to get rid of double digit inflation back in the in the early 80s. Are we going to have to go through that again?
LUNA: Yeah, I don’t think so. I mean, it’s a much different economy, obviously. I was pretty young in the 80s, but a much different economy that we were facing then. And look, the whole thing that we’re looking at right now is something brand new. We had COVID, so the complete supply chain was shut down. The type of monetary policy that we’re implementing right now has never been seen before, so we’ve never been in a situation where they’re unwinding their balance sheet at the same time that they’re raising interest rates. And like I said, I don’t think this economy is as hot as most people think. We’re in a situation where the supply chain was constrained spending the administration put tons and tons of money into the consumers. And that’s when you’re dealing with stocks
ASMAN: very quickly because we don’t here we got a jump. But when you’re talking about the economy, you have two separate private sector spending with public sector spending. I’ve never seen public sector sector spending as high as it is now. I mean, that’s the problem, right?
MARTIN: Yeah, especially because of the private sector, which private sector spending has been waffling a little bit here. We’ve seen the retail sales numbers get back and forth. But the reality is you want that private sector, David, to carry the economy, not the public sector, as the government has done or tried to do in the last two years.
ASMAN: Let’s leave on that point. I think we all agree on that one. Good to see you both, Rob. Scott, thank you very much. Well, mixed messages.
Kingsview CIO Scott Martin discusses refiguring business models, taking buying opportunities and layering into names you feel are fundamentally strong.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: All right, folks, we’re now hitting the lows of the session as this news of a potential Russian invasion next week continues to hammer the stock market, by the way. Bond yields are also going down. The dollar is going up. There’s a serious flight to safety here. I’m going to bring in Rob Luna and Scott Martin Scott. Let me start with you. You know, the main thing that that I’m seeing here is that we kind of thought this was going to happen. At least I could speak for myself and many others. Is it just because the timing or just the realization? Why this reaction right
SCOTT MARTIN: Could be the timing? Yeah. Charles, I agree with you could be the timing could be the fact as we saw the Super Bowl kind of preview there. Maybe people are just taking off for the rest of Friday. And so it’s a thin trade and it’s easy to push the market around because I don’t get it either man. I mean, that’s where the market’s been, though in the last, say, three to four weeks, Charles. This is stuff we already know. I we knew the Fed was going to hike rates this year. We knew inflation was going to be a problem. We knew there was going to be fiscal contraction. So what’s the deal? So I think the basic takeaway, if you’re an at home investor or if we’re investing in our portfolios as we are every day, all day take, these is buying opportunities. I’m not saying it’s today per se, but my goodness, if this continues Monday or Tuesday, look at AMD and Nvidia for two names. Those are great buys right here in great base price, probably Monday or Tuesday as well.
PAYNE: And Rob, that is the big wild card here, right? How do you quantify something like this, an exaggerated event that’s out of our control that we probably thought was going to happen anyway? You certainly don’t want to be an aggressive buyer, perhaps today, but at some point next week, when there’s all of this, get baked into the cake. When is a 50 basis point hike? Get baked into the cake when there’s a Russian invasion of Ukraine, get baked in the cake because the Scott’s point. We kind of saw all of this coming anyway.
ROB LUNA: Yeah, and I completely agree, Charles, that both you and Scott and look, I think at the end of the day, I think we’ve known this for a while. The Fed is really chasing the team. Bond yields, I think are moving and have moved to a place above over two percent where they’re already factoring that into the market. I think the market, if you take a look at it, especially some of the laggards like technology, they’ve really been trying to hold up here as well, though. But to Scott’s point, look, it’s a Friday who wants to be long going into the weekend. We don’t know exactly the extent of what’s going to happen with Russia and Ukraine. Now we’re talking about potentially 75 basis points, which I don’t think will be happening. But look, there’s a lot of jitteriness out there and just the feel of the market right now. It’s not that all, you know, risk on bull market that we’ve been in for a while that everyone’s gotten used to.
PAYNE: No. Yeah. Well, we anybody was used to it today and they have been paying attention for the last four or five weeks. And of course, you both alluded to the Super Bowl on Sunday. I guess the biggest storyline other than Tom Brady not being there is all the betting, right? The biggest wager, according to the Babylon B, President Biden is going to double down double nothing our national debt, placing 30 trillion dollars on the Bengals. All right, folks, I’m just joking before you start to get out my Twitter. That’s a parody out, but seven almost $8 billion being bet on the Super Bowl in New York to open their betting up. Let me ask you, Scott. I mean, what the heck is going on? How can these stocks like DraftKings and others? That was a $74 stock. That it’s like twenty four bucks. How come they don’t move on this news?
MARTIN: It’s kind of odd. Now, quick comment on that, Charles. I would much rather have Biden put that money on the Bengals, for example, than put it in the hands of Congress to figure it out because that has not worked. So I’m taking I’m long, Joe, but I mean, you know, Rob mentioned long going on the weekend. One thing I’m I’m wrong is Joe Burrow in the Bengals and I’m from Ohio, too, so that’s maybe a personal story. The other point, though, you’re right, man. I think the one issue at DraftKings, though just real quick, is that they had this huge spend on getting new clients and kind of the marketing side of things when people are like, they like gambling people who like to gamble, gamble, and there’s a lot of folks out there that will come to DraftKings over time. So I think some of the business models, some of the planning needs to be re figured when it comes to how much the cost per client acquisition cost is,
PAYNE: you know, up until about an hour ago, Rob. DraftKings, it’s still up a little bit, but a lot of these really. I’m talking names that have been smoked have been doing well enough. There’s a stealth rebound there and the Russell was up. And so but here’s the problem one third of those companies are unprofitable. Do you go in there, though? Is have things gotten so bad that you go in there? Is there anything in there that you would be looking at to buy?
LUNA: Yet traditionally, you know, I would kind of agree with Scott, and I’d be trying to maybe dumpster diving to some of these in a name like DraftKings, but look, we’ve got high quality that’s also down 40 and 50 percent names like Airbnb and Vida getting beaten up. So I think right now there’s enough out there that I’d rather put my money into. And look, I think Covid’s coming towards an end. I was just in Vegas, Wynn’s booming. I don’t think you have to play the DraftKings. There’s some really good deals out there. Put your money into some of those. I’d stay away, particularly from this sector right now.
PAYNE: So what’s the worst case, Scott? The worst case scenario here? Because, you know, we can’t. We’re all kind of an agreement with respect to we have to be getting there. A lot of the worst cases. It’s got to be being built into this market. But we were extremely valued, you know, had high valuations and a macroeconomics are also changing.
MARTIN: OK. Yeah, they are, Charles, I thought you were talking about the worst case just for the world, what should be Paris Hilton putting out another music album? But here’s the thing. She was for the markets with
PAYNE: good video from the from the girl with the bitcoin. You know, you got to. That’s what I was thinking about.
MARTIN: I mean, anything like that is probably the worst thing to happen to the consumer since the Fed would start raising interest rates here in March. But here’s the weird thing really quickly the markets are just to Rob’s point in a weird mood. You’ve got to take some of the down days with the good days and just keep some cash handy and layer into names like Rob said that are fundamentally strong that you believe in long term, but don’t look for those short term games right away because you may not get them exactly say on a Monday or Tuesday.
PAYNE: Guys, you got to leave it there. Good luck to the Bengals. Rob Scott, thank you both very much.
Kingsview Partners CIO Scott Martin discusses market overreaction and loading your portfolio during lower price periods. He also talks about fixing issues with the labor market, wage growth and inflation.
Program: Cavuto Coast to Coast
Station: Fox Business News
JACKIE DEANGELIS: Meantime, the Dow is now on pace for its third straight day of gains as strong earnings are driving the markets higher. Reaction now from Kingsview Asset Management CIO Scott Martin Scott. There are a lot of things to be worried about right now. Yet the stock market doesn’t seem to care. I’m not going to argue with three straight days of gains, but what’s driving the momentum?
SCOTT MARTIN: It’s probably the worry, Jackie, because that’s been one of the issues, I think. In January, there was a lot of worry, certainly, and rightfully so. I think the markets were overreacting, as we’ve talked about over the last month, data that was coming in that we kind of already expected. I mean, conditions that we were waiting for to happen and they finally happened in the market was like, Oh my God, I’m going to freak out. So the fact that there’s still a lot of worry out there, jacki, with some earnings stuff still going on with the Fed, maybe fiscal policy here at a D.C.. The fact is worry drives the market higher and when things feel too good, they probably are. And that’s why you see sell offs like we have for the last years. But buy on worry, we’ve talked about that. You’ve got to take lower prices to heart here and use those to load into your portfolio. Yeah.
DEANGELIS: You know, you look at these companies that are doing well, a lot of tech companies and you sort of think about inflation, how it impacts the average consumer. As we were just discussing, when you see Yum brands, their numbers going down instead of up, when they’re reporting, you start to say, OK, they’re paying more for things. Their costs are going up, labor costs are going up. When you start raising prices that much, it hits the consumer. The consumer is going to stop spending. It’s like musical chairs, right? At some point someone’s not going to have a seat.
MARTIN: Right. And depending on where that music stops kind of almost depends on where the restaurant is. That feels it. Because I’ll admit it. I mean, you were talking about the debate between Taco Bell and Chipotle. I mean, depending on what position I wake up in in the morning, sometimes fetal. Your words, not mine. I’ll buy Taco Bell. But other times I will go to Chipotle but feel the pain of the the pinch with the prices, you know? But you want to go to Taco Bell and get as much food for five dollars versus 10, depending on the mood. Same with Yum Brands as you saw where you’re kind of seeing that move around. So that’s a tough thing to kind of keep a needle on or at least pinpoint on because you’re right, it does move throughout the restaurant industry. That’s why, like, I think when you’re looking at your portfolio, you’ve got to really get the best of the best on retail hospitality services because those are the companies they’re going to emerge versus spreading it around a bunch of places. We’re going to have some winners and some losers.
DEANGELIS: Inflation is still a problem when we can agree on that and potentially might even get worse from here. But I think it was a Department of Labor and their report last Friday. We saw a nice increase in the addition of jobs, and I think that helped this market say, OK, maybe Omicron is over. Maybe we’re going to put COVID behind us and that recovery is going to happen in earnest without speed bumps.
MARTIN: Yes, and that’s a theory that’s probably two years in the making. It feels like maybe like 10 years in the making now. So we’re so eager to have some great news on the lack of a new variant, let’s say. So I think that that hopefulness is driving things to your point. And it’s also something to consider when a lot of people, I think, have really gotten through a lot of the issues that we had with the uncertainty on the variants and so forth. So there is still some good spending and some pent up demand there. I think the key point going forward, Jackie is fixing some of the issues with the labor market. This economy is creating jobs, but there aren’t people willing to fill them. So if we can do that and also maybe unlocking some of the supply chain issues, we’re going to be in good shape going forward here to get those prices to slow down because that’s the thing. You’re right, inflation is a problem. But the rate of inflation as far as the increases is slowing. And that’s the thing that you’re not going to hear a lot of places with respect to saying how bad inflation is. It’s bad, but it is slowing at a decreasing rate or going down at a decreasing rate. At least you have that to look forward to as we go through the summer.
DEANGELIS: And wage growth is good, but wage growth fuels the inflation, so you have to be able to find a balance there somehow. Scott, stay right there.
For me, just a moment. I want to bring in Shana Sissel now, the Wall Street Journal out with a piece today that really struck me. I like this one. Banks are unlikely to pay depositors more after the Fed lifts rates because the lenders don’t actually need the money. Shane, that’s amazing. To me, that means there is so much liquidity out there. They don’t need your savings account money to write loans, and they’re not going to give you more for it. The savers have been penalized for the last 12 years, and it’s not going to get any better.
SHANA SISSEL: Absolutely. If you look at how much American deposits are in U.S. banks, we’re up to 18 trillion dollars. That’s roughly five trillion dollars more than we were in 2020. All this stimulus money has forced all this excess cash and liquidity into the system, and people have put them in the bank. And so the banks don’t have a lot of demand for loans and lending, so they don’t really have a need for you to put more money in their deposits and thus they don’t have to pay you more in order to get your money.
DEANGELIS: It’s really staggering when you think about it, Scott, because you have people investing in the stock market right now, that’s where you’re going to get the most return, right? And that’s why we keep seeing this market march to new highs, even though it’s been a little volatile lately. But when it comes down to it, then you’ve got people who are living on a fixed income, for example, who are being. More conservative with their investments, they’d like to see that savings rate go up, especially if the Fed is going to start hiking here. It’s really almost torture when you think about it.
MARTIN: Yeah, I mean, it’s short term when you think about a lot of things, especially savings rates, and it’s a personal story. But like, you know, you’re right, if Shana is right in some sense, as demand for loans is OK, it’s going to start increasing once the economy maybe get some footing. Jack is we talk about a little bit earlier, but think about this social experiment. Banks are probably never going to pay anybody a decent interest rate again. I think just because they haven’t for so long, you mentioned 12 years. I mean, how long do you have to beat over the head and told you don’t deserve an interest rate on your deposits? Guess what? We get used to it and then people don’t ask for anything more. It’s gone in the wind. So therefore the banks are in a great shape here as they get deposits, not pay anybody. Duncan, you know, there’s nothing coming through there with respect to what they’re going to pay you going forward.
DEANGELIS: Yeah. Final thought to you, Sheena. As we do talk about loans picking up, for example, the economy reopening, businesses may be borrowing to restart or new businesses to start, people continuing to go out and buy homes. You know, a small interest rate hike isn’t going to have a crazy chilling effect on the economy. But if the Fed moves forward three or four times, it could be a little different.
SISSEL: Yes, it definitely could. And I think the Fed is somewhat aware of that. But keep in mind, mortgage rates are so incredibly low they could go all the way up to five percent on a 30 year, and it would make a substantial difference in the demand dynamics. So there is some room to grow there. There is some room to run and and I think that we should be cognizant of the fact that raising rates is not necessarily a bad thing. We’ve gotten so used to this environment at zero interest rates, right? I don’t think there’s a whole generation that doesn’t understand that that’s not normal. you know, you have an entire generation that never got paid on their savings accounts, so they have no expectation of ever getting paid on their savings accounts. And it’s created this whole behavioral change, which I think is going to be here for quite some time. And that’s to the benefit to the banks as we have rates rise.
DEANGELIS: Ignorance is bliss or not. Guys, thank you so much. We’ll see you a little bit later coming up on the show.
Kingsview Partners CIO Scott Martin discusses Facebook’s valuation, the Metaverse and thoughts on what might happen with the stock.
Program: Cavuto Coast to Coast
Station: Fox Business News
JACKIE DEANGELIS: Meantime, Facebook’s valuation bouncing back today after it fell below $600 billion for the first time since 2020, but could a lower market cap actually help the tech titan avoid antitrust scrutiny? This is interesting. Let’s bring Scott and Shayna back for more on this. Scott, I’ll go ahead and start with you. That 600 billion mark is the threshold right there, saying, if you’re under that, we’re not going to look at you in the same way. But Facebook is still competing with the Amazons Googles of the rest of the world. Their market caps are a lot larger. And so you wonder, is that is that really fair? Is that really the best way to judge it?
SCOTT MARTIN: I don’t know. You know, it’s funny to tell people, tell you they’re not going to look at you in the same way I felt that way before, and that hurts my feelings to even hear it again. But the thing on Facebook is that it’s one funny thing that the government’s going to say, Hey, we’re not going to look at your care about you as much, but they’re going to still find a way to look at Facebook. Now the interesting thing to Jackie about Facebook kind of dodging the scrutiny. Haven’t they already been doing that with respect to Section 230 and some of the other circles that Zuckerberg and company have run around Congress when they’ve gone on the hill and talked, let’s say, fervently about some of the things that have been going on. So it doesn’t feel like much is going to change here. But it’s an interesting aspect to your point about how this fall in Facebook shares here has actually maybe provided a reward for them in our sense, too. With respect to portfolio positions at Facebook, we started looking to pick up Facebook at these valuations because I think the stock is getting a little bit too low here, by the way.
DEANGELIS: It’s interesting that you’re starting to pick it up. And Shane, I want to ask you this because I’m looking at Facebook and thinking, Well, maybe there’s something to this. Maybe we have seen a bit of a sea change here, Facebook and told us. And that’s why twenty six per the stock was down 26 percent in a day. It’s losing users. There’s a ton of competition out there. Companies like TiK Toc are sort of eating their lunch and you wonder, you know, it’s meta. Actually, the parent company focusing on this metaverse are their best days behind them. I don’t think I have Shane as audio, but Scott,
MARTIN: I’ll take that one up. Yeah, Jack, I’ll take that one. You know what? I think their best days are probably still going to be their worst of their tomorrows because you’re right, there’s this whole feverish attitude about the metaverse. And if your question is very good, though, if you look at tock Twitter, some of the other companies that are out there eating their lunch, so to speak in the lunch, not be it maybe not be that good to eat. But there is lunch out there to be eaten with respect to it’s a big area. We don’t really know exactly what that metaverse aspect is going to look like. Is a metaverse going to be so cool that you’re going to go to the like Walmart down the street in theory and pick out the stuff? And all of a sudden it’s going to show up at your at your house and you didn’t really go there. And for example, it’s virtual. So Facebook is a lot of things that can work with with respect to the Metaverse. And so therefore that alone as to how they take it forward could really help the stock, in our opinion.
DEANGELIS: It will be interesting to see, and I know, as you said, you’re picking up shares, so we’ll watch the share price very closely. My thanks to Scott and Shayna. We’ll have you guys back again soon. Meantime, the big game.
Kingsview CIO Scott Martin discusses buying the dip and purchasing companies that are “down with the crowd”, plus thoughts on Amazon and Google.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: So, you know, on this show, I’ve been talking about this stealth market crash because it’s been going on for literally months and it’s been masked, however, by the major industries. I mean, just for example, just this year, the S&P is down nine percent. But forty nine percent of the names are down 20 percent or more from their 52 week high, and the carnage is even worse than that on the Nasdaq in the Russell 2000. This is why I think investor sentiment rates are so low because in real life, investors are still pumping in tons of money into this market. Sure, it’s obviously moving to different niches, but there’s still buyers, even as they feel the pain. The question is, does it actually make them the smart money? I want to bring in Michael Lee and Scott Martin. The number one axiom in investing is buy low, sell high. So that means buy the dip, Scott. I mean, the retail investors are doing they’re doing this during the middle of a meltdown. Does that make them the smart money?
SCOTT MARTIN: At times it does, Charles, and it’s easier said than done, certainly, I mean, psychologically, it always doesn’t feel the best. In fact, some of the best trades I’ve made are ones that I had to kind of close my eyes and hit the button on. So I agree, I think on some of these big down days, we’re getting a ton of volatility, both up and down these days. You got to pick up stocks that you like, maybe add the positions that are down because these are long term holds for most people that have good prospects going forward. Once we get through this malaise.
PAYNE: Mike, I know you have been bullish throughout this entire period, so I would assume that you like this approach.
MICHAEL LEE: Yes, Charles, yes, and I would have to say, though, this kind of depends on what your expectations are, that if we have a big sell off that you’re going to make your money back or get a quick trade, I’d say day trading now is kind of as hard as it’s ever been on the backs of one of the easiest periods to day trade ever. But, you know, keep in mind, this is not the first led the first Fed led sell off over the last decade. We had ones in two thousand eighteen 2016, 2015, 2014, 2013, 2011, 2010. Anybody who bought into those dips 12 to 18 months later was handsomely rewarded.
PAYNE: What I’m talking about, you know, some of these areas that that have really cause, I think, investor sentiment to get hammered. One is SPACs. And then, of course, they’ve underperformed the market by a mile. This month, 14 planned SPAC offerings worth $4 billion have been pulled. You know, Mike, I actually love it. Now I’m hoping that maybe with stuff like this that maybe somehow the FCC demands more transparency. I know the onus is always on buyer beware. But things like this, I think, have given the market a bad name.
LEE: Well, Charles, you know, I’ve said it before, I’ll say it again, I hate SPACs, and you can make these things so transparent, they’re translucent. The fact of the matter is the incentive for a SPAC is to do a deal. And, you know, the bulk of the time they overpay for those deals, which is not the shareholders interest. And SPACs that actually work out and people make money on those are the exception, not the rule. I would I would. You know, you want to steer clear landmines. I’d steer clear of SPACs in any market environment,
PAYNE: of course, have been a lot of land mine, Scott. Even without SPACs coming into the session, 44 percent of names on a Nasdaq Composite were down 50 percent or more. Now, surely they don’t all deserve that fate. So looking to these ashes sifting through the carnage? Where do you see some opportunity?
MARTIN: Yeah, there are a lot of dead bodies out there, Charles, and you can find some good ones, I think, to pick up here. I mean, two that we like right now are Workday and Zebra Technologies, two names we’ve talked about on the show before with you just again, stocks that I think are oversold, stocks that do make money, stocks that have nice prospects built into recent earnings reports. And I think their earnings are going to be very good this quarter and next. And therefore, these are companies that are just down with the crowd. So therefore you go into those ashes, as you mentioned, and pick up some stocks that have some real prospects here to grow going forward. And they’ll be handsome rewarded when the when the market bounce bounces back.
PAYNE: Mike, what are you looking at?
LEE: So, Charles, next week we’ve got earnings from Facebook and Google and while I would say from an ideological standpoint, these companies are pretty evil companies, but they’re printing money left and right. Saw, you know, you saw with Apple and you saw with Microsoft that these mega caps, the reason why they are mega caps is their earnings power and how successful they’ve been. I don’t think that changes. Facebook is down 22 23 percent from its September high. You could get it at well, I guess it’s Meta now. But but owning these names into earnings is probably not the worst idea. All right. And I’d say, you want to be adding in this sort of ugly environment of multiple contraction. So as these companies continue to grow at double digit growth rates in the top and bottom line, you know, two or three years from now when you have some multiple expansion, you know you’ve taken advantage of the earnings growth as well as a multiple expansion, a more favorable market conditions.
PAYNE: Scott, I’ve got just 20 seconds, but one or two names next week. Earnings Do you want to be in before the earnings report?
MARTIN: Yeah. Two big ones Charles, Google and Amazon. I mean, have you waited in the S&P and Nasdaq, of course, and they can save this market. So seeing how Amazon does reflective of the consumer, how Google does reflective of crowd cloud it, that is an internet. You’ve got these two names. You could actually come in here and really let this market back off the ground.
PAYNE: Michael Michael Lee and Scott Martin to the best. Thanks a lot. I really enjoyed that conversation. I hope people were taking notes.
Kingsview CIO Scott Martin discusses how the market has reacted to the the Fed’s involvement. He talks about the market now as compared to six months ago, supply chain issues and future earnings in Q2 and Q3.
Program: Cavuto Coast to Coast
Station: Fox Business News
JACKIE DEANGELIS: Meantime, of course, the market’s worried a little bit about the Fed worried a little bit about inflation. How are the two going to come together here? Let’s hear from Kingsviews Asset Management CIO and Fox News contributor Scott Martin and also Ben Ryan, Capital Management founder and president Shana Sissel. Scott, I want to go ahead and start with you because we’re going to hear from the Fed this afternoon, and Sheryl broke it down for us with respect to what the markets are expecting. We’re going to probably see some hikes. Question is how many will see this year? I guess yesterday said, look, it’s already been priced into the market. That’s the volatile swings we’ve seen. What do you think?
SCOTT MARTIN: Definitely priced in. Jackie, and that’s what’s weird to me is I think the Fed does have this lead block, if you will, to use a football term, given how great the NFL’s been the last few weeks is that it has the lead block through the line of scrimmage to have a couple of rate hikes here. And they can say that, but it’s what they do afterwards. And that’s the key point. Jack in the narrative in the conference is that they’ve got to talk about how they’re going to be data dependent, not use words like transitory, which, by the way, they use the word transitory about low inflation before they used about rising inflation back in the day. But we forget about all that. The word transitory needs to be out of there, but they need to be very data dependent, but also somewhat, I guess, forthright about how the market, to my degree into our measurement has overreacted a bit to kind of the Fed’s involvement here saying that there’s going to be six interest rate hikes, maybe eight. Ridiculous predictions. The Fed just has to stay focused on the next couple of meetings and say, Look, we think inflation may be hot for a bit, but with supply chains hopefully easing with maybe the policy get the Federal Reserve being a little bit more attuned to what’s going on versus trying to say that things aren’t that bad or things aren’t really noticeable when they really were to everybody else on the street. That’s something that the Fed has to come out and be a little bit more present about things and just talk about the next couple of meetings versus going out to these wild predictions and saying, this is what we’re going to do for the rest of the year, and this is the way it’s going to be because they’ve been wrong in doing that. And that’s been stuff that’s been really hurting the market.
DEANGELIS: Yeah. And Jerome Powell definitely made some missteps, if you will. He had to walk back that transitory language, and that was really tough to swallow, even though the markets were saying that inflation wasn’t transitory for a while, Shana. But this is a two part situation, right? You’ve got the Fed, it’s got to deal with the low interest rates. It’s got to deal with pulling back some of that money printing. But then you’ve got an administration that’s also spent a lot and planning to spend more, you know, having that conversation with CEOs today saying we want to pass BBB in chunks and it’s going to help you.
SHANA SISSEL: So that’s the biggest problem, stimulus is inflationary. And so the Fed can raise rates. They can make the necessary policy decisions in an attempt to deal with the problems with inflation. But if the administration continues to spend at this level, we’re going to continue to have an inflation problem. It is about the supply chain and what is going on in China is affecting the entire world and the US in terms of the supply chain issues that are resulting in a lot of the inflation. But any sort of stimulus at this point, any sort of additional spending is going to be a headwind to any policy decisions that the Fed makes in an attempt to address inflation.
DEANGELIS: Yeah. Scott, let’s talk about the fundamentals of the market a little bit because we’re, you know, getting into earnings season here and we’re getting, you know, mixed results from from different kinds of companies, depending on how they’re dealing, navigating the challenges. Obviously, technology has been an area that’s been a little bit weak the last few days and expectations of these rate hikes to come. Your thoughts on on where companies stand right now, dealing with all of these problems? I mean, it actually feels like things are OK. On the fundamental side, they’re OK.
MARTIN: They’re not as good as maybe they were six months ago. But that’s not a bad thing because six months ago, we’re in still the V-shaped recovery. So things looked pretty in a word. Awesome. Jackie, I think as CEOs of a lot of companies out there, whether it’s Kimberly Clark, Microsoft and so forth, Schlumberger recently Corning, it’s a really tough spot right now because you’re coming out with earnings and you’re probably having a good quarter to report for Q4. But going forward, my goodness, the projections are really tough because you don’t want to over predict and overpromise and then absolutely fall flat on your face. But given the pullback and a lot of these stocks and a lot of stocks, mind you, that we own Jackie, that we still like and we’re still adding to here. Gosh, given the pullback, you kind of have a little bit of a of a chance to say, you know what? We’re a little uncertain about things going forward, so it gives you a pause or two to deliver maybe better results and expected on those subsequent quarters once those come. So the visibility is really tough. As has said, it depends on what your policy is out of D.C. and how that affects inflation. Supply chain issues, we’ve got to get these things worked out because otherwise, I think it leaves a lot of the future pretty murky when it comes to future earnings in both Q2 and Q3, which, by the way, really quick have tough comps now versus twenty twenty one coming up.
DEANGELIS: Yeah, that’s a really good point. Guys, we are going to have to leave it there. My thanks to both of you.