Kingsview CIO Scott Martin discusses the amount of options in the market, using pullbacks to fortify positions, and the upward sloping yield curve in financials.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: Meanwhile, there’s an icon of dichotomy here between plunging investor confidence in amount of cash that’s gushing into the stock market. Individual bearishness that’s plunging. And of course, down at twenty 22 percent bullishness, rather the fear gauge moving closer toward extreme fear. So how can we come to grips when we’re personally growing fearful, but you still want to stay in this market? Believe me, I know it’s not easy. So let’s bring in our market experts Allan Boomer, Scott Martin and Mike Lee. You know, one of the reasons I’ve been bullish beyond the fundamentals is all the cash on the sidelines. Global investors took sixty two billion out of money markets. They put fifty one billion into stocks, forty six billion of that into US equities. So Mike, is this a reason you think for people to remain bullish?
MICHAEL LEE: Absolutely, Charles, I think any debate should be brought. I think the amount of cash on the sidelines is staggering. You have four and a half trillion dollars in money markets. You have over 700 billion dollars of buybacks amounts. And just keep in mind, OK, when that Fear Greed Index is up in the 80s and 90s, that’s what you want to sell when it gets down here. This is where you want to buy, and now it’s easier for me to say it than to do it. But that that historically proves the way it is when everyone’s calling for a correction. That’s where you want to be a buyer.
PAYNE: You know, Alan, you were a VP at Goldman Sachs and then you started your own firm in 2013 wasn’t a really great time, right? Most people hated Wall Street back then. So what’s the secret for you when you get investors to remain calm invested, particularly when they become fearful or distrustful?
ALLAN BOMMER: I hate to say it, Charles, but you got to tell them to turn the TV off, sometimes really focus on. Focus on the long term, you know, why are you investing in the first place? Is it because you want to know every minute, maximize your wealth or is it to really maximize your wealth over time? What are the things that you’re looking to achieve? Like, do you want to retire one day or leave money for your kids? Like days like today, weeks like these last few weeks aren’t really going to matter in the long run. You’ve got to keep folks focused on the big picture, right?
PAYNE: Scott, you know the amount of options. I want to get back to this old triple quadruple witching thing, the amount of options in this market. It’s got a lot of people concerned right there saying it’s really starting to skew underlying share prices. Also, it’s making people less respectful of risk. What are your thoughts about that?
SCOTT MARTIN: It’s wild, Charles. It’s definitely kicking up volume. I think it’s an opportunity like the guys have already said. I mean, any kind of drawdowns that we see because of options expiration or people say, repurposing or recalibrating their portfolios. If you’re getting pullbacks in names that you like, say, like airlines or restaurants, anything tied to the consumer, you’ve got to use those pullbacks or there’s triple which are not to buy in and fortify your positions.
PAYNE: So then let’s talk about resolve, market resolve again, for the most part, has been with us since 2009 on full display march of last year. This year, the S&P 500 has been holding that 50 day moving average like a champ, not just holding bouncing off it like a trampoline. So, so, Mike, you know, you’ve expressed a tremendous amount of bullishness. What happens if the 50 day fails and we start to accelerate to the downside?
LEE: Yeah, look, I don’t I don’t see any sort of acceleration from that, and again, I would be I would be a buyer on an I’d start start selling fixed income or finding other assets in other places to put more money to work. There’s so much cash on the sidelines, combined with the fact that while the economy, while the rate of change may be slowing, we’re an expanding economy. This is a bull market these last four years, not months. Markets don’t sell off because of valuation. There needs to be a catalyst for there to be a meaningful correction. And I’d say the more selling we get, the less likely the Fed is to be active, which in my mind is the only threat to the market at this point.
PAYNE: I do believe the Fed is hostage to the stock market, I think they’ve created a monster they will not be able to control other than keeping it going. Hey, let’s switch gears. We’ve been talking about stocks, but don’t look now. But that 10 year yield is really starting to build some momentum to the upside is right on the cusp of a big resistance point. Now, Scott, I know you like the financials. You talked about them. Obviously, they should do well as these interest rates are going up. Is this one of the areas to be in if we start to really break out?
MARTIN: I think so. Charles and we own JP Morgan and Citi. We have for about a year now, we like the upward sloping yield curve, as you pointed out. Also, the fundamentals on those two stocks are very good. So if you’re looking to expand your portfolio, looking at financials, I think those are the two top names. But obviously you can’t probably go wrong too much with Wells Fargo, given some of the pressure it’s had recently. But financials going forward here are going to take advantage of that upward sloping yield curve as the banks benefit from net interest margin expansion.
PAYNE: And, of course, if Elizabeth Warren gets her way, the by Wells Fargo, you end up with two companies for the price of one. Hey, Allan, at one point, were these higher yields change the way you’re investing right now?
BOOMER: Great question. I mean, I also like the banks, I like the regional banks as well as kind of the megacap banks, you know, you talk about JPMorgan. They. Made a lot of really powerful portfolio of businesses inside of JPMorgan like Citizens Financial, but you know, rates are going higher. I don’t think they’re going meaningfully higher. Like I predict in the next year, you’ll probably see a 10 year around 175. Like, that’s not enough to really, you know, turn us away from anything, you know, rates. I think rates will go higher. It’ll be a grind higher.
PAYNE: That’s like predicting the Knicks. That’s the playoffs, so I’m with you on that. OK. Let’s move on to gold because I got to bring this up. We talked about inflows. Well, guess what? Thirty seven million dollars winning the gold. It doesn’t sound like a lot, but that’s the most in five weeks. And getting it back to you for a long time, you’ve been telling us you got to be in gold. But is it time to throw in the towel in the sense that this is your best hedge against inflation?
MARTIN: No, not yet, Charles. I mean, we like gold and we have for many years because it’s not stock and it’s not fixed income. You mentioned the inflows on gold. It’s actually had a pretty rough week given those inflows. But the reality is this as I think interest rate starts backing up. I think as we see like maybe a little bit of a taper, actually an inflation that actually might help gold here. So we’re actually adding to our portfolios to build out that position a little bit higher.
PAYNE: Right, let’s talk about what you’re buying, Mike, because you got us pumped up, my man. We’re in a secular bull market. Nothing’s going to stop us. May hit a speed bump here and there. How do we take advantage of it? What’s new in your portfolio?
LEE: Hey, Charles, I’m on the other side of this. Interest rates, I don’t believe. I think interest rates are going to back up here. Maybe we get a little bit higher, but then they eventually rally like we’re in a low growth, low inflation world. So I just added some utilities on that trade just just as a low rate trade, as a kind of conservative anchor to my equity portfolio. And I also added a big position in REITS, I think the right sector, it’s done really well, but I think it’s going to be one of the last legs of this recovery. And I think the low lower for longer, low interest rates really help them lever up and rebuild themselves.
PAYNE: All right. You know, utilities, I mean, you’re a brave man. There’s one utility I like next there, and I tell everyone when Biden was elected by that stock, it did terrific under President Obama. All of these things are trying to do means cash in their pockets. But it’s a tough one, although defensive halves look pretty good. Over the last few weeks. All right. Real quick. I think I’ve gotten enough time, 30 seconds. And the last time you were on, you mentioned the FedEx. I don’t think we’ll get a chance to talk before they report. I think so. So stay the course there.
BOOMER: I love FedEx. You know, it’s linked to e-commerce, all the stuff that you ordered, it comes to your house. A lot of it comes from FedEx. UPS is another great name, but FedEx trades at a 24 percent discount on a valuation basis to two ups. So whether their earnings are good or not, and I do think they’ll be good, I think FedEx is a great position on.
PAYNE: All right, gentlemen, let’s leave it there. Alan, Scott and Mike, have a fantastic weekend.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: We got Martin on this. The Kingsview Asset Management CIO. You know, Scott, it’s sort of like all dressed up, but no place to go. So is, you know, hot and very, very excited consumers who want to get their hands on a car, but they can’t find them, or at least the ones they want, and they wait and wait and wait. What do you make of this?
SCOTT MARTIN: They do, and they probably lose interest, Neil, and also don’t even mention the fact that there’s repairs out there that need to be done on some of these cars that folks have that they can’t get done either. So if you talk to a lot of these automakers, if you talked to a lot of the auto dealers? Not only are they having trouble getting materials, they’re actually even having trouble getting workers. So if you even get the materials into the dealership, having somebody to fix it, they’re if they’re actually coming into work is another story.
CAVUTO: You know, this problem doesn’t seem transitory, right? I mean, you and I have gotten into this before this notion that inflation and all these other issues are going to be short lived. Well, we’re past the short lived transitory stage just taking let his reported face value cars right now. This extends well into next year, maybe beyond. What do you think?
MARTIN: Yeah, I think it does, and I’ll tell you what else, Neil, if you just look at the effects that some of the issues have with the global supply chains on on all industries. In fact, if you look at how demand starts to wane because folks lose interest, folks find other things that they want to do or buy. You’re talking about a major effect on just the overall economy, but also in other areas of the economy than just autos. So if you look at the spread, that’s likely you had if this continues, that has a detrimental effect on future growth.
CAVUTO: How do you like the markets now? It’s been a bumpy September typically is, but we can’t get past our own way. Today’s game notwithstanding, what do you think generally has got a lot of bumps ahead?
MARTIN: Yeah, yeah. Yeah, look, I think there’s going to be a lot of bumps ahead. And if you’re a long term investor, you have to take those bumps in stride. Use some of those pullbacks and some of the Microsofts, the Amazons, the Adobe’s the Nike’s to buy in more on your positioning. Because if you see any kind of pullbacks five 10 percent in the market, you’re a long term investor. You have to take those opportunities to load up on some of the positions that may be weak in your portfolio because overall, a lot of those companies, a lot of those stocks I mentioned, I think, are going up into the right in the future.
CAVUTO: You know, you mentioned technology, it’s been taking it on the chin, say Microsoft today. You know, it’s buying back 60 billion dollars worth of its stock. It just raised its dividend 10 percent. It was flirting with the $300 a share before. I don’t know where it is now. If we can pop it up, guys, but what do you think of that?
MARTIN: Yeah, I think the buybacks are key. I mean, if you have a lot of these companies now that are preparing for higher taxes on the corporate tax rate coming forth, you have a lot of cash flow companies that are doing very well in the cash flow analysis. And so therefore they’re looking for something to do with all this. Cash buybacks is one thing. Dividends are another thing, and that actually intrigues investors to go out and buy shares of the companies that are doing that.
CAVUTO: All right. Scott, I want to thank you very much, my friend. Always good catching up with you.
Kingsview CIO Scott Martin discusses why great stocks pull back, and how investors should take advantage and buy in during those shifts.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: You know, I was between an uglier and a blob blob kind of week, right, the damage has been limited. We’ve been down a lot. I think the problem, the inability of this market to sort of get off the ground and gain any steam or traction. So what’s awaiting for us? What are we looking at for next week? I’m going to bring in the market pros Rob Luna, Scott Martin and Rob. You know, we’ve seen very low volume the lows volumes of the air this week, so I’m not sure what to make of it. But what are you bracing for? What are you getting out of this market message?
ROB LUNA: You know what I think’s going on right now, Charles? The trends, your friend. There’s a lot of momentum players in the market right now. Momentum ETFs. But think about the seasonality we’re in right now, September October. Those are bad months last year, a bad months this year. The question is why, though people have to pay taxes next month. I think they’re taking profits. Those names are in the momentum names. And with the lack of momentum in the market that we’re seeing right now, I think that’s going to keep money on the sidelines. I think it’s going to be this way a bit choppy for the next few weeks.
PAYNE: So, you know, one thing we’ve learned, Scott, when the market hasn’t had a five percent correction through August, it usually goes up for the rest of the year. It always does. Do you buy a dip to kind of dip their Rob’s talking about?
SCOTT MARTIN: I do, and I think Charles the Strong are going to survive this one, so what that means is it’s kind of like a heavyweight boxing fight, really. And even Mike Tyson in his best days did take some punches, believe it or not, and yes, delivered a lot more of him on his side. But the reality is this I mean, a lot of great stocks. I mean, the Workday’s, the Service Now is the Booking.com, the Adobe’s, the Amazons. These pull back, I mean, they have bad weeks or even in sometimes some cases months that as we believe at Kingsview and a
lot of these companies, long term, you’ve got to take the advantages of these pullbacks to add to strength. Strengthening stocks are strong stocks. They’re strong. So in my opinion, you want to wait for some of those things to come back into you right now because Rob’s right. I think we’re going to have a lot of chop going forward. I think there’s some concern over taxes. For some reason, there’s concern over what the Federal Reserve is going to do, and I think they’re just going to basically stimulate for the end of time. So take these pullbacks in stocks you like to add to your positions.
PAYNE: Not a lot of earnings next week, but we do get reads on manufacturing the retail sector in retail confidence. Less than a minute to go, Rob and we can get you in both Scott. What’s going to be the big mover? What’s going to be the big thing that perhaps moves the needle next week?
LUNA: Yeah, I know. I don’t think there’s going to be a big mover. I think it’s going to be a lot of chop next week. I think investors should prepare for that. And I think, look, you’ve got to look at individual stock selection right now. Charles, look at themes out there like the semiconductors, big systematic thing that we’re going to be seeing for the next year or two years. Look at names like C that are trading at a big discount right now. Pick winners. Don’t wait for momentum. Don’t wait for the news to tell you it’s time to get in and find some of those good names get ahead of the curve.
PAYNE: Scott, you got 10 seconds.
MARTIN: That’s too much. Darden Restaurants and Bloomin Onion too, I think Charles, those are companies that have pulled back restaurants to pull back because of worries about the virus. Well, those are great companies. So when they pull back, buy in.
PAYNE: All right. And Bloom has got one of the coolest symbols in. Hey, guys, have a great weekend, Liz Clemons at the New York Stock.
MarketWatch interviews Paul Nolte, SVP & Sr. Portfolio Manager
Kingsview SVP Paul Nolte discusses the price to sales ratio, and how a company’s changing free cash flow is useful in judging their current strength and potential for growth.
Kingsview CIO Scott Martin discusses the variance in data points – job numbers, consumer confidence, PMI, and inflation.
Program: Mornings with Maria
Station: Fox Business News
Time: 6:00 AM
DAGEN MCDOWELL: Time for the word on Wall Street. Top investors watching your money. Joining me now, Kingsview Wealth Management Chief Investment Officer, Fox News contributor Scott Martin, UBS Financial Services Private Wealth Advisor Alli McCartney, and Strategic Wealth Partners president and CEO Marc Tepper. Good to see all of you this morning. Scott, let me kick it off with you. We’re standing by for a weekly jobless claims out at eight thirty a.m. Eastern Time. Investors, of course, also waiting on the August jobs report due out tomorrow. The expectation there, seven hundred fifty thousand jobs added to the economy. The unemployment rate ticking down to five point two percent. Scott, what are you watching for?
SCOTT MARTIN: It all sounds awesome, doesn’t it? And I think these days is as untapped. That’s Mark Tepper. If you’re playing at home, if talked about all morning. There’s a lot of variance in these data points now. It’s just not the jobs numbers. It’s consumer confidence numbers. It’s PMI. It’s even inflation. My goodness. So the reality is this, Deighan, I think the market is ready for, say, a stinker to use a technical term here in the job market, because it’s not all bad news, boys and girls, because what that means is that kids, I think we go back to Mark annd I’s, say high school football days when we were stud’s, I think. Right, Mark, this is the lead block that the Fed needs going forward to keep that stimulus train going. If we start getting stinky again, to use that word, jobs numbers here, that allows the Fed to keep the spigot going as far as liquidity to the markets.
MCDOWELL: When you’re talking about the Fed, Scott, before we move on, in terms of the political pressure on Jay Powell, I just wonder and Tep can get in on this later as well. I just wonder, though, that won’t the spigot stay wide open because maybe Jay Powell wants to get another, you know, another term. Just real quick on that.
MARTIN: Yeah, another handful of years. Yeah, totally. And I think that’s the interesting thing is maybe Jay Powell is actually hoping for some disappointing economic numbers so he can justify the liquidy. But let’s face it, I mean, either maybe maybe they’re into the taper as soon as they think or maybe they don’t do the interest rate hikes as soon as they think. What are the other is not going to happen. So as far as the job numbers are concerned, I think the Fed has been right down the middle of the fairway. Another sports analogy. Yes, it’s early with respect to how they’re treating these markets and giving the markets what they need and what they expect. And that’s why we’re at or near all time highs in the S&P Nasci.
MCDOWELL: Yeah, I dare you to work in a cricket analogy. And next time you come on, Ali, I want to move on to you here. Let’s talk about consumer confidence. August, consumer confidence falling to its lowest level since February. And at the same time, we have companies like Costco announcing it’s going to reinstate purchasing limits on select items because people, again, are stockpiling goods as Covid cases. Serj, put this in perspective from a market or investor standpoint.
ALLI MCCARTNEY: Yeah. There’ll be no sports analogies here, I promise I couldn’t if I tried. Maybe lacrosse. I don’t know how that works. So, look, let’s go back to last March when the recovery in the market at least was was really heightened. And we said bull market participants said this is not going to be a straight line recovery. And the truth is that between now and then and very recently, it has been largely both in terms of earnings market numbers and economic information, pretty much a straight line recovery. And now we sit at this inflection point where a lot of the things that we were concerned about that were those downside risks have surfaced. We have a variant that is taxing hospitals and concerning both consumers and producers. Yet again, we have severe weather. We have back to school and we are past peak earnings. And so I think what a lot of the numbers that we’ve been seeing, both the ADP numbers we got yesterday, which were, you know, have 60 percent of what we were hoping for in terms of additional payrolls. I think the jobs number that we get tomorrow will reflect this as well. And consumer confidence, which we did get yesterday, which is the lowest number we’ve seen since February, which think about it, that was like the ramp up of both confidence in the vaccination program. So we’re now sitting at this low where consumers aren’t having checks deposited into their accounts where everybody was, at least where I am in New
York, the thought was everybody would be going back to New York in July and August in September. A lot of that has now been pushed forward as a result of the Delta variant into January. So we have sort of gone like this, and now we’re going to be here for a bit. And I think once we see the Delta variant, once we have a sense of how, quote unquote temporary or transient inflation is, once we have infrastructure kicking off and some more clarity in Washington, I think you will see another leg up
MCDOWELL: your dogs behind you, Ali, and we just love it.
MCCARTNEY: He hears you talking about dogs and there is nothing I can do.
MCDOWELL: It’s been a morning for everybody here in the Northeast. So we love seeing our fluffy little ones. Mark, we briefly mentioned the Fed before. Progressive lawmakers are calling on President Biden to replace Fed Chair Jay Powell, who has been campaigning for reappointment. Meantime, in a new Wall Street Journal op ed, Judy Shelton calls on Congress to rein in the Federal Reserve, calling its power unchecked. Your thoughts on the future of the Fed? And my issue is progressives putting pressure on Jay Powell to be more tough, particularly on financial regulations, banking regulation. I just think that it adds a real uncertainty, not maybe about the role of the Fed that investors might be underestimating.
MARK TEPPER: Yes, absolutely. So, look, I think the path of least resistance is to reappoint Jay Powell, like my man, ScotI Market said he’s been right down the middle of the fairway. I think he’s done a pretty good job. I disagree with his comments about inflation being transitory. I think it’s going to be a little longer lasting than that. But that’s a different story. When you look at Jay Powell, he’s got public support from senators on both sides of the aisle, even Janet Yellen, who supports his reappointment. And when you when you try to figure out what the market impact is going to be here, I think here’s what investors need to know. If Powell isn’t reappointed, the Fed’s going to become even more dovish. So that should continue to prop up stock prices. And right now, it’s essentially a two person race between Powell and Brainard. And dig into your point. Brainard is a left leaning enough that she could potentially transform the Fed’s mandate. Right now, it’s all about full employment and price stability. She could align the Fed more with Biden’s priorities on financial regulation and, of course, racial equality. Climate change. Right. But at the end of the day, here’s what I think happens. I think Powell gets reappointed. I think Brainard gets elevated to vice chair so that there’s some extra influence there. And I think you’ll end up getting more regulation in the financial system, probably a bit bearish for financials and crypto. But I think more of the same for everyone else.
MCDOWELL: Thank you so much, Mark. You sit right there, Scott Martin and Alli Macartney, thank you so much for being with us this morning. And hold that dog close, Ali. Much more ahead
MARTIN: Tell him about the Chewy earnings.
MCDOWELL: Yeah, exactly. Much more ahead this morning.
MarketWatch interviews Paul Nolte, SVP & Sr. Portfolio Manager
Kingsview SVP Paul Nolte discusses the effects of easy monetary policy on U.S. stocks, tech stock valuations and investor expectations of the next 12 months and beyond.