Kingsview CIO Scott Martin discusses the resiliency of the market, and a positive outlook for 2022. He also discusses the cruise lines and airlines, plus the news for Peleton.
Program: Making Money with Charles Payne
Station: Fox Business News
ASHLEY WEBSTER: Well, markets are slightly lower and have been that way since the opening bell on this very last trading day of the year. But that said, all three major indexes are expected to finish 20 21 with some serious gains and on the precipice of new record highs. So did the Santa Claus rally deliver to expectations? Let’s bring in our market panel today from Kingsview Wealth Management Scott Martin. Great to see you, Scott. And the chief market strategist at Cross Mark Global Investments, Victoria Fernandez, Victoria. Good afternoon to you. Let me begin with Scott, though, Scott. How are we feeling about the markets as we wrap up Twenty twenty one.
SCOTT MARTIN: Not a bad gift from Santa Claus? Actually, I mean, if you go back a couple of weeks ago, three weeks ago, everybody was panicked, coming in to the end of the year. I mean, this is going to be the big unwind, right? As you mentioned the lead in there of this big rally we’ve had and it didn’t happen. And that’s frankly, because that’s typically what happens in market psychology actually is when people start calling for the experts, quote unquote start calling for the great roll over. It doesn’t happen and the market goes back in their face. So I think we should be relatively full of gratitude with what happened here because the market has shown itself to be very resilient and being able now to push through a lot of these same old problems that we’ve laid out with, say, the COVID variant with promises of tax hikes and things from the Federal Reserve as well that were scary for the markets, ones seemed to not be scaring us anymore. There’s a lot to be positive about going into twenty twenty two, in my opinion.
WEBSTER: All right, Victoria, know we’ve had a lot of analysts say, look, you can expect higher interest rates next year. You can expect lower stocks and you can certainly count on volatility. Would you agree?
VICTORIA FERNANEZ: Yeah, I think actually all three of those are probably accurate. I mean, you know, Santa Claus came in with a bang and we’ve been a little lackluster the last couple of days. But the Santa Claus rally should continue into the first couple of trading days of next year. Then we start to refocus and look at some of these items you’re talking about. We do think rates will go up on the longer end. We think there’ll be some consolidation in the equity markets as the Federal Reserve starts to lay out their plan of when they’re going to raise interest rates. And that’s going to cause some volatility. So I think we can anticipate that for twenty twenty two.
WEBSTER: All right, Victoria, I’m going to follow up with you, talk about the cruise lines, the CDC simply says, don’t go crazy, crazy, you know, cruising these days. So where do these and other reopening stocks go from here? I know that’s difficult to predict, but what do you think?
FERNANDEZ: Yeah, I’ll have to look into my crystal ball and see what it tells me, but I think one of the things we’ve always talked to our clients about is don’t make a huge play on pure reopening trades, right? Look at the longer term perspective in these names and see if it’s a business model you like. Let’s see if there’s growth potential. Look at the balance sheets of these companies. It’s what we always talk about for cruise lines. It’s not a place where we want to be right now and we’re not in airlines right now either. I think you can look at the reopening trade more towards the consumer side in regards to consumer discretionary and some consumer staples. I would stay away a little bit more from those highly volatile names of cruise lines.
WEBSTER: I’m going very good, Scott, to you. Yeah. Scott Peloton sliding on a downgrade. Well, one of the great pandemic stocks being able to turn it around or is it more bad news for Peloton?
MARTIN: I hope so because I own some and I own some low. So that’s OK. You know, gosh, though, what an interesting tale actually for Peloton these days. I mean, you know, talk about when you think you hit rock bottom when the girls from Sex and the City take shots at you and then you get downgraded after that. So I think the bad news, I mean, look, the bad news is pretty much everything has happened to Peloton that can possibly happen, right? I mean, maybe the the girls of the View are going to attack them or something. The point is there’s there’s bad news and a lot of stocks right now to Victoria’s point. Same with the cruise lines. At some point the airlines, too. You have to pick these up because it can’t get much worse. It feels horrible. Don’t get me wrong, but I think Peloton is a buy here now.
WEBSTER: All right. Victoria, very good. Scott Victoria Treasury yields dipping today. They’ve been a bit of a yo yo. The 10 year. Do you still like financials?
FERNANDEZ: We do like financials, it’s one of our favorite sectors going into twenty twenty two. We actually think the the longer into the curve has been probably mispriced a little bit when you look at where inflation has been, when you look at where credit spreads are. And so we think that longer into the curve will start to move higher. But it’s not the only reason we like financials. Their balance sheets have been extremely strong, especially compared to where they’ve been historically. We think there’s going to be some long growth. And look, the financials have been hit. They’ve taken a hit the last month or so. So it’s a good place to go in, especially for the big money center banks and maybe start a position if you don’t have one already.
WEBSTER: Very good, we’ll have to leave it right there, folks, but Victoria and Scott Speller stuff, thank you so much for joining us and a happy new year to you both.
Kingsview CIO Scott Martin discusses different reasons people buy – and sell – stocks. He also discusses the “fast and furious” nature of market phases, and how investors must realize that their portfolios need different things at different times.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: CEOs insiders, meanwhile, are cashing in their stocks at historic rates from Elon Musk to Google co-founders. Sixty three point five billion dollars have been sold through November. That’s up 50 percent from last year. Joining me now, Rob Luna and Scott Martin. And you know, Scott, I don’t really get too frustrated when insiders sell unless they sell a large percentage of their stock. But for many, it’s a it’s a problem. I mean, would you be buying? Tesla’s made a 50 point reversal off the low today, Alan, would you be a buyer if these insiders are selling?
SCOTT MARTIN: Sometimes it’s a good thing to do that, I mean, and here’s the funny thing, Charles, to your point about people getting so emotional and so wrapped up in what insiders are doing sometimes are selling for different reasons than you’re buying. I mean, they’re selling for four tax loss or tax gain type capture, as well as the fact that maybe if their personal situations that they’re taking advantage of or my goodness, as investors, sometimes they’re selling because the stock is way up and they want to just take some chips off the table. So what I like to look at in that particular notion of Tesla is I like to buy Tesla on big down days, big, big washout days. We had one recently, Charles earlier this week when the New York Times came out with that report about the self-driving technology. So yes, I like Tesla long term here. I think it’s a great part of our future. But I want to wait for those big down days because those are short lived when Tesla pulls back hard. That’s when you jump into buying news in the next couple of days, it’s up.
PAYNE: Of course, rob the reason one of the main reasons we’re seeing all the selling this year and the new laws and the tax hikes are coming and a lot of these folks are are cashing in stock just so they’re getting paid some of these tax obligations. So when you look at it on a company by company basis, when does it become a big deal?
ROBERT LUNA: Yeah. And I completely agree with Scott, actually, surprisingly, Charles, you know, from the standpoint of, you know, these executives look, they file something called a 10b5 one. Investors can look at that and you could actually see that these sales, a lot of times are predetermined. I work with a lot of corporate level executives. This is something we do just as risk management when you think about it, Charles. That’s where the majority of their income is coming from. So they have to go ahead and sell those stocks. But to your point, it is a case by case basis. Don’t sell the stock or buy a stock just based off of what insider is doing. And to Scott’s point, if you like these stocks when they get beat up for any reason, if the excuse does, your is the CEO is selling, go ahead and buy them then, but don’t let this determine your investment strategy.
PAYNE: And a quick note there is apparently the AMC CEO sold 90 percent of his stock. I don’t know. I’m not cool with that. The stock got hit is still on a lot of pressure. I’m really surprised he did that. I don’t know. I think he may have taken advantage of investors on that one. Let me ask you guys about today’s session because some folks are confused. Rob, I’ll start with you. Does a day like today when we could have easily been off a whole lot more? But we’re not. Does that signal anything to you?
LUNA: Yeah, I mean, I’m really surprised at your previous guest is a technical analyst, there was kind of talking about this. The market’s extremely resilient. We have so many opportunities and reasons to go down here. And now we’re seeing all the predictions of a twenty to twenty five percent pullback next year. What I’ve learned a long time ago in this market, Charles, is you want to go against consensus and the obvious set up for next year is probably what what you do not want to be doing. I think the market is strong as long as the interest rates stay low. You’ve got a 10 year cylinder, 1.5 inflation, as we saw this morning as an issue. Cash is trash. You want to be invested in assets. Use these opportunities as a pullback. This market’s going higher, in my opinion.
PAYNE: You know, Rob, I mean, let me let me start with you on this one, Scott. It’s it is interesting to me, though. Yesterday, the best performing stocks were the most boring stocks, right? The S&P 500 low volatility names. It’s just I mean, they’re right is the Pepsis of the world and the McDonald’s in the world. I mean, is there a time when you say, OK, I want to park a little bit more money than normal and boring, but steady?
MARTIN: Yes. And we’ve been doing that for our clients, Charles, but we don’t stay there. I mean, these market phases are fast and furious. And then some days, like you mentioned you, the staples, are there. Other days, energy is there. Other days utilities have been great and then other days tech. My goodness, which has been a great sector for us the last several years is lit up like a Christmas tree that may or may not have been set on fire. And so you have to realize that there are times you need to have different things in your portfolio. Doing different things at different times and having those experiences over a long term period is how you’re going to win in this market.
PAYNE: I got that one my man the Christmas tree set on fire. You know, we, you know, we’re in low shoe sales kind of analogies over here these days. That’s all I’m saying. I’ve got one for you, a spoiler alert for all your sex and the City fans. That’s Robin Scott. There was a big death on this reboot. A character was actually using a Peloton bike ahead of their demise. Now the stock is down today, but it really probably isn’t. There was a massive downgrade on it. And Scott, I think the notion here is a lot of people were going for these stay at home stocks, you know, and we were told even after the pandemic is over, the hybrid work thing is going to be there forever. Forty percent of us will work from home and all of them, one by one by one, have been taken to the woodshed. Is there any hope for Peloton or any of these other names?
MARTIN: There is I mean, I think some of these stocks, like you mentioned, Peloton, whether it’s these, these these documentaries or say these, this these comedies or whatever you want to call that that show taking shots at Peloton, I think these stocks get overdone. Charles, I mean, you look at know, Rob mentioned the technical analysis aspect to think, look at the RSI, look at the relative strength on Peloton, look at the stochastic, look at the MACD histogram. This is all really cool stuff and technical analysis like they’re way overdone. So you have the ability to kind of ride the wave here. I think you got to get into belts on here.
PAYNE: All right. Hey, here’s the good news. There will be a vacancy for a main character if they make another movie, Rob. I checked you out and some of those honeymoon pictures. My man, you are perfect for the role and you could be the new Mr. Big any day. Both you guys, Rob Scott, have a great weekend.
MARTIN: Yeah, maybe bigger.
PAYNE: All right, folks, I love hearing from you on Twitter