SVP Paul Nolte Quoted On Yahoo Finance 6.22.22

Kingsview SVP Paul Nolte discusses inflation and how the fed is strongly committed to bring inflation down.

Read the full article here: Yahoo Finance

3:00

Nolte Notes 6.22.22

June 13, 2022

Download the PDF here.

It has been said for millennia, sometimes for little comfort. “It is the darkest before the dawn”. Yet another huge drop in the equity market, now down in ten of eleven weeks and well into bear market territory. The Fed meeting did little to assuage inflationary fears as investors believe the Fed has little in their arsenal to fight rising food and energy prices. Powell’s comment at the press conference that another 0.50 or 0.75% rate hike is on the table for July and likely another 0.50 in September. It was only nine months ago that inflation was seen as transitory. What a difference a few months can make! To be sure, the rate increases are impacting parts of the economy, like housing, where mortgage rates are getting over 6%, when they were merely 3% at the start of the year. Housing activity has waned, lumber prices have cratered. One other part of the economy could see some bargains in the months ahead: retail stores. Comments from the biggest retailers about excess inventory could lead to sales during the summer to cut the inventory back to more normal levels. It is not the price cutting that many consumers need to see, but it is a start.

How bad has this year been for stocks? There have been only a handful of times that the markets have dropped by 15% in one quarter (assuming the market finishes close to current prices in two weeks) AND have dropped by 20% over two quarters since WWII. The good news is that, except for 2008, the next quarter was positive. In all cases the markets were higher a year later. When looking at the post-war bear markets, of the 14 prior bear markets, only three saw the markets lower a year later: 1974, 2001 and 2008. Based upon the historical trading record, the markets are likely to bottom within the next six months or so. This lines up well with the pattern of mid-term elections. The markets generally trade poorly into mid/late summer and then rallies strongly to the Presidential election. If there was a fly in the ointment, it is that the markets are still historically priced richly, especially if inflation and interest rates remain high. Fed Chair Powell will get another shot at explaining the Fed’s decision and outlook this week when he visits Congress. Keep your seatbelts fastened.

Interest rates were all over the map last week. The yield on 10-year treasury notes started out at 3.15%, rose as high as 3.50% and ended the week at 3.22%. Commodity prices fell 5% on the week, with oil prices (not at the pump!) dropping 7% just on Friday. Worries early in the week of an impending recession seemed to give way to the belief we are currently IN a recession. This would explain the funk that the stock market is in as well. For now, rates seem destined to rise, especially if the Fed is good on their word that they will be hiking rates through Labor Day.

One other part of the market that is “signaling” that better days are indeed ahead is the various asset classes and sectors within the SP500 are all at or near momentum lows. This has occurred close to market bottoms in 2020, 2018, 2015, 2009 and 2002. It doesn’t mean the markets will go straight up from here, but a bit of nibbling on a broad basket of stocks may be rewarding over the coming 12 months. Given the fall from grace over the past six months, growth stocks could bounce back the strongest in the months ahead. That said, the case can be made for international stocks that could benefit if the dollar weakens. Very broadly, the incredible rise in bond yields have made bonds an interesting sector as well. Everything is cheap, but for a very good reason, higher interest rates and inflation. If either of those can subside or at least stop their meteoric rise, investors may once again return to the stock market. It may be hard to see from here when smoke gets in your eyes.

The daily large swings in the markets are not likely to calm down anytime soon. Fed Chair Powell will be in front of Congress this week and many other Fed officials will be explaining their economic views. The hard economic data will be thin until after July 4th, but that does not mean stocks will be enjoying the summer wind.

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The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable but are opinions and do not constitute a guarantee of present or future financial market conditions.

Program: Fox Now
Date: 6/3/2022
Station: Online
Time: 10:37AM

REPORTER: Unemployment is down a little and the price of gas is up a lot. So what’s that mean for the economy? It’s complicated.

There’s already early signs that inflation is peaking. But if you if you look at numbers such as the number of quits or outstanding jobs, jobs available, they are actually starting to peak and roll over.

REPORTER: Economists are worried because since the fifties, inflation over 4%, combined with unemployment under 5%, has meant the US economy was headed for a recession within two years. Inflation now stands at 8.3% and the May jobs report out Friday is expected to show the unemployment rate dipped to three and a half percent.

SCOTT MARTIN: The data in the economy is not awesome. It’s not really horrible. So I think we’ve got kind of a soft landing slowdown definitely upon us.

STEVE FORBES: When the Federal Reserve talks about a soft landing, you better put your seat along.

REPORTER: Drivers are looking for relief. The national average for a gallon of regular hit 4.72 on Thursday.

CONSUMER: Everything is sky high where I used to fill my tank for $50. Now it’s $80.

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3:00

CIO Scott Martin Interviewed on Fox News 6.15.22

Program: Cavuto Coast to Coast
Date: 6/15/2022
Station: Fox Business News
Time: 12:00PM

NEIL CAVUTO: The administration is great, he said, is seriously considering the possibility of temporarily junking the federal tax on gasoline. It’s 18.3 cents a gallon diesel. It’s even more at 24.3 cents a gallon for diesel taxes here. What we don’t know is exactly how far such a tax holiday would go. We do know that in just the last three weeks, we’ve risen about $0.18 on the average price of a gallon of gas. So whatever tax you take off the market all of a sudden shows up in the underlying price. So damned if you do, damned if you don’t. So where is all of this going? And this day, the Federal Reserve is meeting to see what it can do to sort of curb this appetite for not only gasoline and oil, but pretty much everything that’s now taking grip in our economy. Scott Martin joins us. Ray Wong joins us. Gentlemen. I want to begin with you, Scott, because the administration’s approach to this is anything but for the time being, more domestic production. It’s going to try to urge the oil companies to do just that. But the oil companies come back and say, well, you’ve made it very, very difficult, because whatever reprieves you give us are very short lived and very limited. But the message seems to come from the White House. You guys are gouging Americans and it’s got to stop. What do you think.

SCOTT MARTIN: It does, Neil? And you know, you’re making the oil companies the enemy when in fact, there’s a solution. And oil companies and consumers are not stupid. They know this is government policy tried and true. This was the war that President Biden declared on the energy markets when he took office. And so this is just a follow through from that sentiment. And so instead of being, say, friendly to the oil companies and saying, how can I help? Biden comes out and says, you’re doing this wrong. Change your business or else. And that’s just not going to work. And the great point you made about the federal tax holiday, I mean, in Chicago alone, we’ve got state and local taxes, Neil, that are close to a dollar of gas prices that we see today. There’s all kinds of help that if the government wanted to come out with and give the American consumer just immediate relief, they could do this. But instead they kick this political football down the field and say, well, it’s the oil companies, it’s this, it’s that, it’s Putin, for crying out loud. And so they don’t want to address the real problem here. And until they get to the real solution, which is exactly government policy, we’re going to see prices go up even more.

CAVUTO: In the meantime. Ray Wang It’s really the Federal Reserve and only the Federal Reserve, whether you like the Fed, whether you hate the Fed. The fact of the matter is they’re the only ones right now with the ability to sort of directly deal with this head on. We don’t know exactly how they’re going to deal with it today, but it’s looking like at least a three quarters of a percent hike in the overnight bank lending rate called federal funds, which would bring us up to the round, the one and three quarter percent level with likely a lot more to go from there. What do you think?

RAY WANG: Yeah. I mean, part of it was really to get the demand destruction and we’re starting to see implications. Right. Auto sales are down 3.5%. The National Association of Homebuilders have pretty much said their indexes are continuing to go down in terms of confidence, in terms of production of homes. We’re seeing in retail sales that were up 0.1%. But when inflation is 8.6, you’re really behind eight and a half. So I think the market’s taking care of some of this. The question really is, where is the ceiling? And so if they hit 75 basis points today and then say we’re going to do another 50 in July, I think the market will breathe a sigh of relief and say, okay, good, we think that’s the top. But if they keep moving and move too far, I think there’s going to be pushing us into the edge of a recession. And the economy is in a frail point at this moment.

CAVUTO: You know, Scott, I was sort of factoring things out, you know, pen on a napkin here. If they got aggressive and stayed aggressive right through the end of the year. I know the consensus seems to be and I don’t know where you gentlemen are, Scott, talking to you now that we end the year with the Fed funds, probably around three and one half percent. But there’s another argument to be made. If the Fed really gets aggressive and hikes three quarters of a point at every remaining meeting, which would take you through today, the July meeting, the September meeting, the November meeting, and finally the December 13 and 14 meeting. I added all of those up and if it got 75 basis points with each meeting, I would assume unlikely we’d be up close to 5%. Are we going to go there?

MARTIN: We could. And I think, Neil, the key point, good math, by the way, there, I don’t think I even would have gotten that right and I don’t think the Fed would have either. And that’s a scary thing. I think the sooner they get hawkish and the sooner they get, let’s say, tight, Neal, the better off we’re going to be. I know that sounds crazy, but the market has been crying crazy for the last two weeks now in the ten year benchmark for the ten year rate. I mean, look at the rate. You’re right on the ten.

CAVUTO: You’re absolutely.

MARTIN: Right. Yeah. It’s telling the market. It’s telling the Fed, rather. Neal, I think you’ve got to go 100 basis points today. 75 is just the baseline. If they do 100, I got a prediction. The market rallies, the equities rally because they’re like, okay, the Fed is now taking a line in the sand. They’re putting the stake in the ground and saying, no more of this screwing around. We’re not going to do 50 basis points anymore. We’re going to get serious. And the sooner they do that, Neil, the sooner the recession comes and or is over and the sooner to my friend that they can actually start cutting if they need to, to get the market or get the economy back on its footing.

CAVUTO: That’s interesting. You know, Ray, it’s sort of like the rip the damn Band-Aid off approach. It’s going to hurt like heck, but better that than just to sort of slowly do it, which would still be painful. Just painful a little longer. If the Fed were to do something like that, forget about a full percentage point cut today. That could happen. I’ve heard that. But to to raise rates to the point that by the end of the year, we’re close to 5%. If you think about it, we have an inflation rate that’s well north of eight and a half percent. So they’d still be under that. And normally that’s what history says is you’re sort of guideline. Your benchmark, whatever the inflation rate is, is where your Fed funds rate should be. I just wonder, like if you get up to those kind of levels, aren’t all bets off.

WANG: All bets would be off. But most definitely this is just one side of the problem. I think your earlier point really around energy prices, which is driving the inflation piece that’s got to be addressed. This war on American energy is ridiculous. I mean, we need a transition to ESG, but it’s got to be a pragmatic transition that doesn’t bankrupt everyone in the process. If you want to drive down inflation right now, pump oil, drive down energy, open sources. It’s not just the leases. It’s about also making sure the regulations are available, the permitting is available, and the fact that the pipelines, the transit and all those other regulations are removed. But that just means people aren’t serious about driving down inflation if they’re not addressing the energy issue.

CAVUTO: I’m just wondering and very, very quickly, my produce is going to kill me. But you guys are so good. I did want to pick your brains on this. I know you’ll be back a little bit later in the show. Scott, if the Federal Reserve were to signal that an aggressive rate hike, a series of them, a minimum of 75 basis points were in the cards. You argue the administration, the markets would respond favorably and maybe start turning things around. There are many who said even at these levels, the markets are still rich, though. Do you think the markets remain toppy? Even with the 20% plus decline we’ve seen in the major averages?

MARTIN: Short term, they may be a little toppy just because of the valuations that you’re referring to, Neil, and the fact that earnings are going to come down in the next couple of quarters, because we do have that slowdown in consumer spending. But for even the shorter term, which is like two or three days, I think the market loves it. I think anything short of something hawkish or something serious from the Fed today, which is basically 50 basis points or less, to jump back to Edward Lawrence’s amazing reference point to Nancy Kerrigan earlier, that’s your Tonya Harding today, 50 basis points or less. It’s going to whack the market in the knees because the Fed is not serious about getting their handle around things if they go higher. I think that’s where the market actually bounces here because yes, valuations are high, but they’re short term, not to high enough to where the market can rally.

CAVUTO: Now, I left out just looking at the Nasdaq and technology stocks. All right. They’re off, many of them 50%. The average itself. Well well, north of 28%. So you could say that’s overkill. But others are saying it is still rich. Do you?

WANG: You know, I don’t as well. I think the floor and the Nasdaq’s going to hit around ten. I mean, if you’re looking at 15 X on P as kind of like the low point, that’s probably where we’re going to sit somewhere between 14 and 15. I think what we’re going to realize in the Nasdaq is the tech companies are still doing good. The earnings are amazing. You saw what happened with Oracle a few days back. The the real question is really where is the dollar going to be? And, of course, what’s going to happen in the B to C market in terms of consumer sentiment and if that’s going to slow folks down. But tech companies are still growing 20 to 30%, especially the big cap ones.

CAVUTO: Gentlemen, don’t wander too far. I want to pick those fine brains and take your quotes to be my quote. So they were my ideas. But thank you very much, guys.

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5:30

CIO Scott Martin Interviewed on Fox News 6.15.22

Program: Cavuto Coast to Coast
Date: 6/15/2022
Station: Fox Business News
Time: 12:00PM

NEIL CAVUTO: All right. You know, a little more than a week ago, the odds of anything as wacky as a 75 basis point hike in interest rates seemed so low. In fact, it represented about a 3% possibility in people who trade on this sort of stuff. The overwhelming majority betting on on a half point hike. That has completely flipped now, better than 90% betting. That is what we will see today. The overnight bank lending rate known as federal funds increased three quarters of a point. There’s a very small sector of that group insisting that it will be a full percentage point. I don’t know where our guests are on that, but let’s get right to it, because we’re minutes away from that Fed announcement. Michelle Schneider joins us. The Market Gauge Group managing director Ray Wang is back with us. Constellation Research CEO. Everybody wants to rule the world. Ray already is ruling the world, so we just thought he’d throw that into the title. Scott Martin of Kingsview Asset Management, the CEO, Fox News contributor, ruling the the world for young people who want to understand how this whole market stuff works. Welcome to all of you and thank you for joining us. We’re minutes away from a rate hike, Michelle, that we know, but will it be three quarters of a percent?

MICHELLE SCHNEIDER: My guess is that it probably will be a half a percent, but it really at this point doesn’t matter because there’s a few givens. A We are in a bear market. B Certain areas of inflation, we’re seeing cooling already, auto housing market. And C, is is that even if we do get some kind of a relief rally and some some kind of bigger hike in interest rates, we cannot cause certain types of inflation, which is the supply side and more side inflation, which basically affects food. That’s not going to be any.

CAVUTO: You see a half point hike. Right. I know it’s not crucial to you, but you see at least a half point, you’re not in the three quarter percent hike.

SCHNEIDER: I don’t think so now.

CAVUTO: Okay. Where are you on this, Scott?

SCOTT MARTIN: Three quarters and I’ll go. The tears for fears are out. Neil, one of my favorite bands of all time who I think is on tour again, by the way. So pick up tickets if you can. I’ll shout it out. I’ll shout it and tell them they need to do 75. And I disagree with Michele. I think this does matter. She’s right about the supply chain concerns. There’s supply and demand. Demand is cooling, but the market is in such a weird, frisky, emotional state. The market, especially the bond market, are old friend. The bond market that was so gentle, so peaceful and now freaking out needs to see the Fed take a stand. I mean, I’m so excited about this. I’m so wrapped up in this meeting. I combed my hair. I went into the studio because they need 75. The market’s told them 75. Anything less than that huge sell off.

CAVUTO: Wow. Okay. So if it is three quarters of a point and if the Federal Reserve were to follow up with such aggressive rate hikes, at least in the next two, possibly three meetings, now you’re talking, you know, a Fed funds rate that approaches 3% could be four and one half percent by the end of the year. What is an acceptable level?

RAY WANG: Building on the chairs for theosophy. Erskine That would be a mad world. And we’d probably see mortgage rates on 30 year side hitting seven and a half, which would take us probably to almost like 2000 to 2001. So, but, but it is likely, right? I think we do need the shock and I think it’s going to quell some of this. But, you know, it is definitely a supply issue. I mean, this is a supply side issue. And I think if we don’t solve that piece, we’re going to be in trouble. And I think that’s.

CAVUTO: Going.

WANG: We’ll probably see those two rate hikes.

CAVUTO: Okay. I apologize for jumping on you, my friend. Michelle, is this a rich market to you right now? With all the drubbing it’s taken, you could still make the argument it is still rich. It’s still trading at multiples that are north of where they normally should be. And that’s after the selloff we’ve had. Where are you on this?

SCHNEIDER: Well, yes, we have valuations and PE ratios that were historical highs and a lot of the companies that bought back their own stocks through the years and enjoyed zero interest rates and low taxes are going to suffer as a result. And we don’t really know what fair valuation is, but I just want to explain that the supply side inflation, that rage is talked about, it doesn’t really matter at this point what the Fed does about the interest rates. You can’t control things that cannot be produced like food, like energy at this point. And so it doesn’t matter whether they go 75 or 50. And I just want to explain that we are in a bear market. The inflation is going to continue, particularly where it hurts the most. And yes, valuations are definitely still bloated and we don’t really know what fair value is. Maybe that’s the most exciting thing about this. At some point we will be able to establish what actual fair value is if you’re a believer and free market ultimately.

CAVUTO: You know, you can talk about it not having an impact on food prices, but you could argue just the opposite as well. It’s got I mean, you could start saying that people heretofore were buying expensive cuts of meat or whatever or are pivoting to cheaper cuts or or, God forbid, going vegetarian. That’s a whole separate issue. But the people will, in the face of those higher costs, start making these tough decisions. Therein lies the fear of stagflation, that the higher prices beget a slowing economy. Where are you on this?

MARTIN: I agree. I mean, going plant based. Yeah. And driving less. Flying less. I mean, I think Michelle’s right. I mean, it is a supply issue, but the demand side is totally part and parcel of that, too. So, Neil, I think the higher rates curtail the demand and the market though, this is going to sound totally crazy and overkill warning here. The market is going to be head over heels. Another one of my favorite Tears for fear songs. If the Fed gets a hold on inflation, they’ve played this too light. They have played this way too easy. And now they got way behind the curve. And the market is begging them to do something stark here. And so if they do that, the market’s going to start to rebound, I believe, because the inflation is the number one concern right now, both on the supply side, as Michelle pointed out, but also on the demand side. And the demand side will be curtailed if the Fed starts to be hawkish here.

CAVUTO: You know, I think something has changed here and I defer to you. You’re all experts. But as you know, I qualify as one because I read a prompter, so enough said. But having said that, that this is Jerome Powell’s Paul Volcker moment, I think he now aspires to be that blunt, that rough, that tough, and the

cautious Jerome Powell might might not be around any longer. And I don’t know how that plays out. But if if he is Paul Volcker, then we are in for some aggressive rate hiking, aren’t we?

WANG: We are, and we do need a Paul Volcker here, but we also need a Ronald Reagan to come back in and cut regulation. And we need to be able to open up markets and drive down food prices and make sure that we’re safe and secure and we feel well about that. And also open up energy, right? If we were to do some of that, I think we could cover both ends. It’s not an either or. The Fed is just one aspect of it. But there’s regulatory issues, there’s policy implications that are not being put to the test. And if we go back to some of those policies that would actually drive down cost and be deflationary, we’d probably be in much better shape than just relying on the Fed on this.

CAVUTO: All right, guys, I wish we had more time. We don’t. We’re very close. 30 seconds away. To Lauren Simonetti taking over in the next hour.

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5:30

SVP Paul Nolte Interviewed on WGN Radio 6.14.22

Paul Nolte, Senior VP at Kingsview Wealth Management, joined Bob Sirott to talk about the Fed’s plans to raise rates, why the housing market is slowing down, and the benefits of short term gains. He also discussed why cryptocurrencies are more risky than other investments and retail sales numbers.

Click here to listen to the interview.

5:00

Nolte Notes 6.13.22

June 13, 2022

Download the PDF here.

“My mama told me there’ll be days like this”. If Thursdays 2% drop in the averages was not enough, Friday’s inflation report pushed stocks down another 2%, making it a full 5% on the week. The market is now back to the May lows. The coming week will have plenty for investors to watch, from the Fed meeting to retail sales and other inflation reports. The strong consumer inflation report came as little surprise to main street as they watched gas prices jump daily and every trip to the grocery store was ever more expensive. Even the core rate was above expectations, so the hope of “peak inflation” remains somewhere in the future. As a result, interest rates shot higher, with short-term rates moving more than long rates. The implication is that the Fed could now justify a 0.75% hike in rates this week, up from 0.50% that had been expected. There was a time when the Fed wanted inflation, fearing that persistently low inflation could tip toward a deflationary cycle and persistently poor economic growth. The thought was the Fed could better deal with inflation than deflation, now that inflation is here, the Fed will be put to the test in the months and years ahead.

If inflation is always and everywhere a monetary phenomenon means, according to Milton Friedman, inflation is caused by increases in monetary supply. Historically, monetary growth has been between zero and 10% on a year-over-year basis, with spikes usually occurring as the economy hit a recessionary period. The pandemic gave the Fed and the government a reason to send out huge amount of money as the economy was thrown into reverse. The supply of money just from the Fed jumped 15% in five months and continued higher until last month, when the series turned negative. The chore ahead will be to remove that monetary accommodation from the economy in the months ahead, which is likely to push the economy into a recession. The economy remains in a strange place, with China largely shutdown, demand for goods/services very high and companies trying to expand production. There are signs that the higher rates since the start of the year are biting some sectors, with lumber prices off more than 50% from the start of the year and housing activity beginning to slow as mortgage rates surpass 5% from under 3% at yearend.

The interest rate complex reacted swiftly to the inflation news. Short-term rates rose much quicker than long-term rates, flattening the yield curve. When short rates are above long rates (inversion), it has historically been a recession warning. Rates were briefly inverted in early April and are today merely 0.09%. One other sign of rising risks is the difference between yields on junk bonds and treasuries. That is once again widening, indicating investors prefer the safety of treasury bonds vs. the higher returns and risks in junk bonds. Combined with a once again rising commodity complex, the inflation genie is not likely to be bottled up until 2023 at the earliest.

The decline into the weekend left negative signs across the board, with large, small, value, growth and international all declining as investors sold anything/everything they could. Volume expanded, but not to the level that would indicate panic selling. Investor sentiment is very bearish and could spark a short/sharp rally of 5-10% like March and May. Even the energy sector saw losses last week. For the fourth time since last Thanksgiving, the volume on declining stocks was over three times that of rising stocks for three consecutive days. After each occurrence, the markets managed to mount a “reflex” rally. Add to the mix very pessimistic investors, a rally could be a launching pad for significant gains over the coming year. In the short-term however, investors will still have to deal with the Fed meeting this week. The discussion of how high and quick the Fed will be in hiking rates is likely to be center stage. The short-term pain could turn toward long-term gains IF the inflation picture brightens during the summer.

The impact of the inflation data is likely to roll into this week as well, especially with the Fed meeting that ends Wednesday afternoon. Expectations for rate increases going forward should get reset and the markets may be able to “move on” and turn their focus toward the beginning of earnings season that will start after the 4th of July.

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The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable but are opinions and do not constitute a guarantee of present or future financial market conditions.

Program: Fox Now
Date: 6/3/2022
Station: Online
Time: 10:37AM

REPORTER: Unemployment is down a little and the price of gas is up a lot. So what’s that mean for the economy? It’s complicated.

There’s already early signs that inflation is peaking. But if you if you look at numbers such as the number of quits or outstanding jobs, jobs available, they are actually starting to peak and roll over.

REPORTER: Economists are worried because since the fifties, inflation over 4%, combined with unemployment under 5%, has meant the US economy was headed for a recession within two years. Inflation now stands at 8.3% and the May jobs report out Friday is expected to show the unemployment rate dipped to three and a half percent.

SCOTT MARTIN: The data in the economy is not awesome. It’s not really horrible. So I think we’ve got kind of a soft landing slowdown definitely upon us.

STEVE FORBES: When the Federal Reserve talks about a soft landing, you better put your seat along.

REPORTER: Drivers are looking for relief. The national average for a gallon of regular hit 4.72 on Thursday.

CONSUMER: Everything is sky high where I used to fill my tank for $50. Now it’s $80.

****

3:00

CIO Scott Martin Interviewed on Fox News 6.10.22

Program: Your World with Neil Cavuto
Date: 6/10/2022
Station: Fox News Channel
Time: 4:00PM

NEIL CAVUTO: By the way, we told you about how this really stung stocks today. The Dow down 880 points. This was its 10th down week and the last 11 you know that story here. But the betting seems to be that the Federal Reserve, the only game in town to fight this inflation, since we’re not seeing anything done on Capitol Hill to deal with it, it means that we’re going to look at a lot higher prices when it comes to our borrowing costs. For example, the Federal Reserve meets next week. The betting is they’re going to hike rates by a half a percentage point. They may the month after that, another half point hike. The betting seems to be in September when they meet after that, another half point hike, some factoring in maybe a three quarters of a percentage point hike. So rates go higher, prices go higher, everything seems to go higher. To Scott Martin on what the implications could be. He’s with Kingsview Asset Management and Frances Newton. Stacy of Optimal Capital, the director of strategy there. Frances ended with you begin with you the notion that the Fed has no choice now but to up the ante when it comes to upping those rates. Do you agree?

FRANCES NEWTON: I do. I think in the interim, they have no choice. I think that the persistence and energy is giving them quite a challenge. But the problem is, is that we have a record amount of debt in the system and last time they hiked rates, they had to quit. They they didn’t quit because they wanted to quit. They had to quit. There was a liquidity shortage in the system and they couldn’t service that debt. And inflation is horrible as it is. It’s better than a credit crisis. And so I think that they’re going to be as aggressive as they possibly can be until they have to stop.

CAVUTO: You know what’s interesting about that? You talk about our $31 trillion debt, Scott. Just a nominal uptick in rates to where we think we’ll be by the end of the year to three and one half to 4% on the overnight bank lending rate, which is the rate they control. That’s going to add trillions to that.

SCOTT MARTIN: Yeah, it’s going to feel really tough. And actually, it’s ironic, Neal, maybe the government, the actual debtor there, will feel the pain that the consumers are feeling for the last several months. Oh, my goodness. And share some of that feeling around because goodness, this is a lot of trash talk. It feels like from the administration this week, I mean, pointing fingers, blaming oil producers, blaming Vladimir Putin, who’s been pretty quiet of late, certainly. I mean, all this finger pointing, all the efforts that the administration says they’re making, Neil, are just really not happening because fixing this inflation problem, opening up some of the oil fields, getting nice, lets say are nicer, playing with some of the oil producers out there, helping out consumers. I mean, fixing this problem should be as easy as walking up the steps to Air Force One. But it’s not because they can’t do it. They can’t change their tone and they’re going all the way down the road with it. Even the energy sector secretary, as Jeff Flock pointed out, you.

CAVUTO: Know, Francis, what’s a little weird here? You know, a combination and a confluence of events, right? I mean, we have the retail inflation now back to where we were 40 years ago, consumer sentiment and other. It’s how people feel about the future is also at or around a 40 year low. The cost of living increase that is planned for Social Security recipients is probably going to be around 8.6%, the highest end stop, if you’ve heard this before, about 40 years. Meat prices, the highest in about 41 years. Gas the highest in about 40 years. What’s going on with this 40 year thing? And is someone trying to tell us something that that we’re in for something big just like we were then?

NEWTON: Well, I think we’re going to see this show up in the polls in the midterms. And it’s really interesting that, you know, Jay Powell has kind of switched his religion to Paul Volcker ism. So that’s giving us an indication of how he’s going to try to solve this problem. And how much was your first mortgage? 13%. Neal, I think if I remember correctly. Right. The interest rate on your mortgage.

CAVUTO: Did I ever mention that story to you? Yeah. Well, that’s what our.

NEWTON: Yeah.

CAVUTO: That was a bargain buy back then, by the way.

NEWTON: That was a bargain. But the really sad thing here, and I think this is what’s going to get people motivated politically, is the people who have assets, of course, therefore in one case are suffering, but it’s the people who don’t have assets that not only are putting up with a on average 12% increase on their food, they’re putting it on credit cards. And now that we’re raising rates aggressively, the interest rates on their credit cards are going to go up. So they’re going to end up paying a 20 to 30% premium on their everyday items. And that’s the saddest part of this entire process.

CAVUTO: And Scott Martin it’s what you’re used to, right? Your perspective, your life experience. Some people have never seen anything like this. How are they going to judge?

MARTIN: They haven’t. It’s going to be really rough. You know, we’re already starting to see that. I mean, look at savings rates plummeting. Look at credit card usage. That’s increasing, obviously, at a crazy rate. Now, the fact that consumers are tapped, I mean, they’re spending, but they’re spending on essentials. So not spending on discretionary items. And your comment about the 40 years, my friend, I mean, we’re seeing prices as high as they’ve been since I was prom king. If that doesn’t tell you anything to be scared about over the weekend.

CAVUTO: You were a king. Wow. I was lucky to get it at all. But after 13.

NEWTON: Years in a bassinet.

CAVUTO: See? Listen to you. I don’t know. It brings back memories. Not not so far, not all good memories. Guys, I want to thank you very much.

***

5:30

CIO Scott Martin Interviewed on Fox News 6.9.22

Program: Making Money with Charles Payne

Date: 6/9/2022

Station: Fox Business News

Time: 2:00PM

CHARLES PAYNE: All right, folks, I want to bring in our friend Scott Martin. Scott, let me just pick up on that. How much do you consider intrinsic value when you’re buying or selling stocks?

SCOTT MARTIN: I consider it, I guess against the backdrop and I love the comments you shared there with David, because intrinsic value is great and it’s great for the long term, but it’s sometimes tough in the short term because as we’ve seen, Charles would say, today’s market, I’m sure Facebook is he noted Amazon, Google, you know, stocks we hold as well. Those looked like they had intrinsic value three months ago or even maybe six months ago to some degree. And some of them. Yeah, and they’ve fallen further since. So the reality is I think you have to check the market kind of emotions as well, Charles, and the backdrop, but just know what you’re kind of getting into with respect to that, because sometimes stocks can fall further, they can get more into value, and then they eventually rise again. When the market say emotions dissipate and get more towards, say, a normal trading upward sloping market environment.

PAYNE: You know, Scott, that reminds me when I was a broker and we, you know, someone we get someone in a stock at 30 and calling back up, Hey, Mrs. Jones, you like the stock at 30? You’re going to love it at ten. You want to buy some more. So that’s what.

MARTIN: It sounds like a can’t miss. And Charles, a couple of names that are out there that we’ve kind of looked at the same intrinsic value play. And remember, we have the fastest growing economy in the world, the world. The world, as somebody once said, and you might hear that quote last night from somebody very important. The point is, though, we do have a good economy, I think, coming out of this current recession that we’re in. So companies like Southern Company Charles we found in a recent recent purchase that have some nice intrinsic value Netflix. Yes boys and girls there’s intrinsic value there as well as possibly Zoom Communications and some other names that are along those lines, Snowflake, that are seriously beat up, seriously in the trash. But ones that, as David just said previously, based on some future cash flow analysis and future assumptions that I think are likely to come true, these are stocks that are going to go up over the next 12 to 18 months.

PAYNE: I’m not sure what you’re talking about. Last night I was watching reruns of Banner Check. You need to check that show. Fantastic.

MARTIN: I was watching Lifetime, man, just to go to sleep.

PAYNE: Sorry. Let’s talk about the CPI number tomorrow. I mean, everyone is worried about it. Concerned. You’ve been playing it pretty cool. You’ve been positioning yourself because you’re a longer term investor. But let’s just play around with this. If it comes in below consensus, then we get a pop. And does it have any staying power?

MARTIN: I think markets have to be happy with that because finally, I think we’re starting to see that slowing of the inflation rate of growth. Here’s the question, though. What is the bond market do next next door to say that inflationary number, Charles? Because the bond market does not react. Meaning if bonds don’t get bid and rates don’t come down, I think the market blows that thing off is maybe a temporary thing to get excited about, meaning that if Bonds can respond and you can start seeing that bid and bonds in correlation to say maybe a lower than expected CPI number, then you’ve got the setup for a market rally into month end.

PAYNE: Scott I’ve got less than a little less than a minute. What is the market worried about, though? That’s that’s an unknown. In other words, we know about inflation. We know the threat of recession. We even know the threat of stagflation. We know the Fed’s going to hike at least three times 50 basis points and they’re going to start to let the balance sheet run off. We know all of the dangerous things out there. What part of that are we so concerned about?

MARTIN: Yeah. You know, I think it’s a labor issue now, Charles, you know, I was just at a conference a couple of days ago talking about how in virtual one, but talking about with a lot of folks about how tough the labor market is right now. I mean, how many jobs are out there, how much labor there supposedly is out there? But they’re not willing to work or they’re not fitting up with, say, the jobs that are out there. So I think the market is concerned, Charles, that we don’t unlinked these supply chain issues as much as we can. We don’t get people back to work and being where they should be when they do need to go to work, do need to go to the offices, do need to go to the restaurants, the service industries and so forth. So that’s the kind of thing that the market, I think, worries about because there’s still demand out there, folks. So you have to match that up with the areas where you need the supply of the workers to deliver those goods and services.

PAYNE: Yeah, that’s why I’m investing in automation stuff, man. I think businesses are going to have to invest big time. Yeah, you get a chance. Check out that banner. Check that first season of banner. Check, Scott. I’ll let you go, my man. All right.

***

3:55

Kingsview Partners Welcomes Partner | Wealth Managers Michael Muson & Daniel Dixon

Former Wells Fargo Advisor Opens Kingsview Partners Office in Eureka, CA

Kingsview Partners today announced the opening of their newest office in Eureka, California. Partners and Wealth Managers Mike Munson and Daniel Dixon join the independent Registered Investment Advisory firm with over 31 years of combined industry experience.

Along with the benefits garnered by Kingsview’s multi-custodian, fee-based platform, they also have the freedom to provide truly client-centric strategies. They operate under a fiduciary standard and have a comprehensive suite of services, including holistic financial planning, professional portfolio management, streamlined performance reporting and collaboration with tax and legal professionals.

With twenty-five years of industry experience, Mike Munson began his career in the securities industry in 1996, working with AG Edwards & Sons, Wachovia, and Wells Fargo before transitioning to Kingsview. He has a widely diversified background, including experience conducting real estate transactions and as a restauranteur. As a business owner and investor, he understands the business trends and economic impacts his entrepreneurial clients face. This knowledge, paired with his financial expertise, means Mike can advise clients with different risk tolerances, time frames, and life experiences.

A longtime resident of Eureka, one of Mike’s personal goals is to serve and enhance his local community to the greatest extent possible. In addition to running his financial practice, he also owns two local businesses, served on the St. Joseph Medical Foundation Board and is an active member of the Eureka Old Town Rotary.

Originally from Baltimore, Maryland, Daniel Dixon was educated at Towson State University in finance and business administration and began his career in restaurant management and real estate investment. Using that experience, he founded a small management firm, which he retired after six years to pursue his vocation as a financial advisor. Daniel moves to Kingsview’s independent platform with six years of industry experience.

Having spent most of his life as an entrepreneur, Daniel brings a unique energy and passion to all his endeavors and works to positively impact his clients’ lives. He has a keen interest in learning, and the information he gains helps elevate the standard of service for his clients.

Daniel is a member of Kiwanis and the St. Joseph’s Foundation board, and serves on the Humboldt County Workforce Development Board.

“Kingsview Partners is very pleased to welcome Mike Munson and Daniel Dixon to the team. They bring an impressive advisory presence and real-world business and entrepreneurial experience that make them a standout partnership in our industry”, says Chief Executive Officer Sean McGillivray. “Their work to elevate the standard of care for their clients aligns perfectly with the Kingsview philosophy and continues to advance our goal of transforming the industry.”

Kingsview’s newest office is located at Office: 205 I Street, Suite A, Eureka, CA 95501.

To contact the Eureka office, please call 707-273-6448.

You may also contact Mike Munson at mmunson@kingsview.com and Daniel Dixon at ddixon@kingsview.com.

3:00

SVP Paul Nolte Interviewed on WGN Radio 6.7.22

Paul Nolte, Senior VP at Kingsview Wealth Management, joined Bob Sirott to discuss when we could see a recession hit the economy, how long inflation rates could go, how high are interest rates going to get, and more.

Click here to listen to the interview.

5:00