Program: Cavuto Coast to Coast
Station: Fox News Channel
DAVID ASMAN: But first, inflation and inflation, is it permanent or transitory? That is the question the Fed is debating as we speak right now. We’ll hear about their decisions coming up. But markets are on edge, waiting to hear whether the central bank will pull back on its money printing sprint. Our all star panel is here, Kingsview Asset Management CIO Scott Martin, Fox Business correspondent Susan Li, and Through the Cycle, president and founder John Lonski. A great panel. Thank you all for being here. So, Susan, what are the markets expecting? They seem not to not to be too certain about what’s going to come up.
SUSAN LI: Yeah, well, what does transitory mean? Because before you’ve heard the Federal Reserve say maybe two to three months and now is it for the rest of this year? We know that inflation has run hot now for the past three months. You have a five percent increase in prices, consumer prices, the fastest, two thousand eight. So I guess the discussion is when do they take away the punch? Bowl is a twenty, twenty two. And then do you get the first interest rate increase in twenty, twenty three? I think the markets are passing and looking for some sort of wording from Jay Powell later on today.
ASMAN: Scott, which way. You bet.
SCOTT MARTIN: Expecting not much, David, actually, I think the real news is going to come out in the Jackson Hole meeting in a few weeks here, but I’ll tell you what else is going on here, David, is you talk about this transitory notion of inflation. Susan’s right. The setup is exactly correct. It was a couple of months and now it’s several months. And as long as they keep using that word along the line, I guess it’s still transitory. And I’ll tell you, interest rate projections are hard to handicap right now because we’ve got softening economic growth coming down the pike here in Q4 and Q1 of next year, which probably puts off the rate hike at least another six months into two thousand twenty two.
ASMAN: Well, John, earnings, of course, are looking in the rearview mirror, but we have these spectacular earnings yesterday, almost 60 billion dollars between three companies, Microsoft, Apple and Google or Alphabet, as it’s now called. So you had these spectacular earnings from the high tech companies. You still have a lot of demand out there. There’s this pent up demand. People with a lot of cash, they want to spend it. But you have a labor shortage. You have you have inflation. You have certain pushbacks on supply, supply chain, mess ups and and strangulations going on. So. So what’s your bet on what the economy is going to be doing in the months to come?
JOHN LONSKI: I think the economy’s going to slow down. We have had a number of downward revisions for predictions of economic growth during the second half of this year. You know, we had, for instance, GDP now by the Atlanta Fed earlier. They thought that the second quarter and we’re going to get a report tomorrow on second quarter GDP, the second quarter GDP growing by something faster than 10 percent. Since then, that forecast has been lowered to seven point four percent. Basically, David, what is happening is that price inflation, higher prices are beginning to take their toll of household expenditures. The best example, housing. New home sales in June were a disaster, down nearly seven percent monthly, down 19 percent from a year ago, despite still very low interest rates. I think the Fed is quickly finding that it’s going to be between a rock and a hard place. If it hikes rates to try to cool inflation, it will hurt the economy. If it does nothing faster, price inflation will lead to pullbacks by consumer spending.
ASMAN: But, Susan, they’re going to have to rewrite their mandates, if that’s true, because they have two major mandates. One is for price stability. As we talked about, there isn’t much price stability right now. Inflation is going up. There are even signs that it could be double digit next year if if that’s conceivable that we could go back to the late 70s. And the second mandate is on unemployment. Well, we have nine point three million unfilled jobs. Yes. They might not be paying as much as the government is for unemployment benefits. But the point is we don’t have an unemployment problem right now. So is the government just getting in the way
LI: And finding the workers to fill those jobs? And they also say that there’s a Fed put out there being that there’s a third mandate, which is to protect the stock markets, because a lot of people on Wall Street says that if we see the stock market fall 10 percent, you bet the Fed will step in at some point, as we saw in the depths of March last year, which they should have done. But, yeah, there are concerns that right now maybe the economy is running too hot. There are a lot of jobs out there, not the right people to fill it. And maybe it is time to take away the punchbowl. Now, if you take away stimulus, it doesn’t mean you can’t be reinstated once you see some sort of slowdown or some sort of hiccups in the economy.
ASMAN: But but but right now and again, Scott, it has to be the last word. I’m sorry, John. We’ll get back to you. We’ll start with you the next round. But but the fact is, is that we have the government just getting in the way of this amazing emergence from from all of the lockdown’s, which was creating all this spectacular growth. I’m wondering if the government is causing more problems than they’re solving right now
MARTIN: For sure, David. And creating new problems every day. It’s the classic case of government knows best. Government knows how to do best with your money, not you, yourself, the business owner or the spender. And that’s really where I think we’re at this crossroads here, because the Fed has done what they needed to do. The government has gotten in the way and created more inflationary pressure. And they seem to keep doing that with some of these crazy spending packages that have yet to be passed through Congress.
ASMAN: A panel this good should not be missed in their second round, which is coming up later in the hour. Good to see you guys.
Program: Cavuto Coast to Coast
Station: Fox News Channel
DAVID ASMAN: Well, meanwhile, Beijing’s crackdown on US listed stocks is fueling a record drop in those stocks. Let’s bring back Scott Martin. Susan Lee and John Lonski. Good to see you all. Susan, what is going on in China right now? I mean, President Xi is a communist, even though he’s allowed you know, he sits where he does because of the sort of free market pushes of his predecessors. Is he going back to the old a stricter communist model of dealing with the economy?
SUSAN LI: Well, if you ever go to China, you’ll see it’s actually a very capitalist society. People there just want to make money and make their lives better. But there’s a lot of debate in terms of what exactly is a long term goal of Beijing and Xi Jinping and the Communist Party. Because really, when you’re clamping down on big technology like they have been in the last few months, you’re really cutting off your nose to spite your own face. Right. So what is a long term goal? Is it just domination, control over data, over the economy, over the markets? Or do you want your home grown talent to make lives better for the billion people that live in the country? I think there’s a lot of debate about that. But I will say that Bitcoin has actually benefited from this clampdown. A lot of money has been taken out of these Chinese stocks and worse two day wipeout since, two thousand eight. That money has gone into other assets, speculative assets like Bitcoin, John.
ASMAN: So far, the Bush administration hasn’t really changed that much. The policy of the Trump administration, one of those rare things where it hasn’t undone the good stuff that his predecessor did. But do you think that will last or do you think we may have sort of relations with China that perhaps a lot of people would would would voice their opinions against?
JOHN LONSKI: Well, I think the Biden administration will continue to take a critical view of what is taking place in China with the intentions might be they will be very wary of attempts by Chinese companies to purchase U.S. companies. And Susan, I think put it quite well. The Chinese government appears to be shooting itself in the foot. I mean, they have a very creative, innovative, highly educated population that could do wonders at creating wealth for China. And yet they seem to be putting limits on the ability of the Chinese economy to grow. And this brings up an important point. You know, years ago, the 1950s, high ranking U.S. academics, Paul Samuelson made the argument that the Soviet Union would surpass the US economic never came close to happening now. And the more you try to stifle initiative in an economy, the less likely is the economy to reach its full potential.
ASMAN: Well, Scott, on the other hand, you see all those people there at one point, four billion of them, and companies like Coca-Cola and the others at Nike that have their their fingers all over the place are willing to forgive all of the problems that China has. They’re willing to kowtow to the Chinese Communist Party to to maintain their market share in China. But and this is a very important but that I want you to deal with. You have the issue of the pandemic. We will not forget where the pandemic came from. We will not forget the way they unleashed it by allowing the people from move to travel to Europe and to travel to us and infect the rest of the world and perhaps perhaps having invented it inside a lab. Won’t there be repercussions from that that will affect economically our relations with China?
SCOTT MARTIN: Well, there should be, David. I mean, I’m waiting for the administration every day to do something about what happened in the Wuhan lab a little over a year ago. And certainly if you look going forward and based on history, you can’t trust China, whether it’s economically, whether it’s medically. We don’t have a friend there, obviously. And if you look at back, you know, earlier this month, they had the hundred year celebration, I guess it was, of the CCP, which was highly their militaristic. It was highly affronted to the rest of the world as some of the comments that President Xi made versus the other rest of the world leaders and rest of the world countries about what the Chinese government was going to do to people. And so, look, going forward, if we think we’ve got a friend in China, we’re sorely mistaken and it’s already costing them internally. Yes, a lot of money as far as how they’re clamping down on their own, their own companies, but also what it’s doing to some of our companies that are trying to get in there and do business
ASMAN: Susan,John Scott, what a great panel. Thank you all for being here. Appreciate it. Well, it’s one of the.
Program: Your World with Cavuto
Station: Fox News Channel
SANDRA SMITH: Choppers still taking a bite out of Apple, the tech giant blowing through earnings and sales expectations, including big iPhone sales. The stock is little change in the after hours, but what is this telling us about the state of the US economy, the global economy, I should say? Let’s talk to our money guy, Scott Martin. I mean, record profits, dollar 30 a share, a record quarter record, June, record quarter, I mean, sales. One hundred and ninety four billion in cash. And by the way, Tim Cook is also confirming that return to office has been delayed to October and possibly later. So they’re doing all this while so many people are still working from home. I mean, Apple just keeps winning.
SCOTT MARTIN: They keep winning like Charlie Sheen once was, Sandra. And I’ll tell you what I mean. The numbers are outstanding, like you mentioned. I’ll throw in another one to record numbers for iPhone sales. Five billion, by the way, Sandra, ahead of what the street expected, five billion sports fans ahead in revenue. So, I mean, the estimates can’t even be high enough for Apple yet. You made a really good point, Sindarin. You this from your experience in the market, the market’s flat, the apple prices is flat. The stock price, rather, after hours is flat. And some of the other companies that came out like Google, Microsoft, others are kind of flattish. Same thing as well, because they’re already expected. Yeah, these are expectations that are built in this market. So be careful if you’re out there buying these stocks as an investor.
SANDRA SMITH: So while we’re all complaining about higher prices of our groceries or fuel, certainly we’re not letting the six hundred dollar iPhone bother us. There are still buying that. What does that say about the state of the economy?
SCOTT MARTIN: Well, I would love to find a six hundred dollar iPhone because, I mean, the last one I bought, this one right here was like a thousand and five. I mean, look at you know, there’s refurbished. That’s exactly right. The lower models, which, by the way, every time they do an upgrade on the iOS or a new iPhone comes out, that other model gets stupider, it seems like. But here’s the point. You’re right. It just do an experiment. If you go out today or go out tonight, walk around and see how many people are glued to their phones, where they’re walking around or in their cars driving. It’s unbelievable how these things are basically an extension of our arms and legs here. So the fact is these are integrated more than ever into our lives via the service revenue, too, by the way, which is another great number in today’s earnings report for Apple service. Revenue was about a billion ahead of street expectations as well. So that’s like the the Apple music, the Apple Arcade, things like that cloud. So, Sandra, the fact is, Apple is the biggest part of our lives, really, that we probably have as far as tech companies go. And they’re just going to keep on crushing
SANDRA SMITH: it and they crushed it. And I have to tell you, there’s an Apple and Grand Central here. And while Grand Central still half empty because there’s still not as many trains, there is still a line to get in the Apple store there. They stop you. If you don’t have a mass, they hand you a max, they line you up the stairs like this. And I mean, people just keep buying them. So that turned up in the earnings. Great to see you, Scott. Fellow Chicagoans. Thank you. So you all right after.
Kingsview CIO Scott Martin discusses the pace of the interest rate plummet, the housing market, and earnings in the S&P 500.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: Let’s get the read from Scott Martin, Kingsview Asset Management. We’ve got Luke Lloyd back with us as well as Strategic Wealth Partners. Luke, to you first on whether the bond market is telling us something that the stock market doesn’t want to hear. What do you think?
LUKE LLOYD: Yeah, Neil, investors can’t have it both ways. There are two narratives going on right now. Investors get scared when yields rise because of inflation concerns and then investors get scared when yields go lower because of economic concerns and the delta strain of the virus. You can’t have it both ways. The question you have to ask yourself is, what is the best case scenario? And then what is the most likely scenario? The best case scenario? Yields continue to rise because there are no more shutdowns in the economy remains high. What is the most likely scenario? I think that same scenario is the most likely the US can afford or handle another lockdown and half of the population is fully vaccinated. I think these concerns are just temporary and the stock market continues to slowly grind higher.
CAVUTO: Interesting because, Scott, you know, you could make the very argument that this is happening, it’s going to be beneficial to stocks, right? Because the lower those yields go, obviously dividend yields of the S&P 500 are a lot higher. You could make the argument that you’re getting squat in bonds. It might be safe, but you’re not getting much bang for the buck. So it might as investors try to regroup through this, be a good thing for stocks. What do you think?
SCOTT MARTIN: Right, that’s the funny thing, Neil, it’s just I think if you look at the pace of this interest rate plummet, as you kind of highlighted at the beginning of the show there, that’s concerning. I mean, we were up near one point seven three percent in the 10 year just a few months ago. Everybody calling for two, two and a half even heard some threes out there by the year and now everybody’s calling for maybe one. And so I think it’s the pace of that
fall in the yield that’s really concerning. And then also, if you juxtapose that, though, versus stocks, like you said, yield on stocks, dividend yields, their earnings yield on the S&P, the fact that a lot of techland is highly leveraged, therefore, their borrowing costs are falling by the day as the 10 year rate is falling in itself. Those are reasons to be somewhat constructive, but it just goes to show you how the market gets in these weird moods, whereas Luke kind of pointed out where maybe it’s investors wanting both things both ways or just the fact the market gets in this kind of sell first, ask questions later kind of mood and any news is a bad news and a reason to go for the sidelines.
CAVUTO: You know, you could use it. I think you guys are very good at spelling out the big picture here. Look, you could use the argument here that this could be a worrisome development for technology stocks. But however you look at their downdraft today, they’re still up, up and away over the last year. Amazon going into today, it gained about one hundred and thirty dollars billion in market cap. So I’m beginning to wonder whether this is just a a slight adjustment to that and nothing more ominous. How do you play technology stocks?
LLOYD: Yeah, I think it is a slight adjustment all around, but all all around. I think that’s actually bullish for US domestic stocks. And the reason why is, you know, first off, the US economy is essentially so hot right now and that’s causing issues. Companies can’t hire enough workers to grow like they want to, and that’s scaring investors. And then you have the Delta variant freaking people out again, about Covid. You know, as Americans, sometimes we get tunnel vision and forget about the world. In America, things are looking pretty good. We are open and partyin over here where you take a look globally, things aren’t that pretty. Many countries are still shut down. Listen, you know, here’s the thing. I think this is an opportunity for US domestic stocks to outperform international stocks over the coming years. Not only are we open, but international investors want to own US stocks because we are open. This is bullish for US stocks and technology stocks over the next coming years.
CAVUTO: You know Scott, you could also use the argument that lower rates, whatever the rationale behind them, certainly will help those looking for a home or those who want to refinance the one they’re already in. That typically happens with these type of spurts and activity. And we’ve seen housing ebb a
little bit, maybe because of the price of homes themselves have gotten so high. But what do you expect on the housing front?
MARTIN: Housing feels a little bubbly to me and Neil, not so much, say, 05, 06 or even in the mid teens, but it just feels a little bit hot right now to kind of hot to handle. You’re right, though. I mean, Reifies have definitely been a big boom in the last couple of years for consumers, and that could happen again. My goodness, rates are falling here with the Fed still in play, buying a ton of mortgages, all they can handle. So, look, I mean, housing, staying strong here, I think does help us pull through some of the difficulties here with maybe a resurgence with the Delta variance, maybe just a slowdown in general with the economy. But the one concern I do have to Luke’s point, though, is this overseas issue. Yes, I agree. Domestically, things are pretty strong. But if you look at the S&P, five hundred boys and girls, half of the earnings in the S&P 500 come from overseas. So if the global situation isn’t as good as, say, the US situation, eventually that does concern me for the overall performance of equities going forward.
LLOYD: That’s why you don’t own the S&P Five Hundred.
CAVUTO: Yeah, you could say that. Or the Nasdaq a proxy that. But I do want to pursue that a bit with you later in the show, because I want to get into the fact whether China created this technology round and might be doing that right now. But that’s a little later in the show. In the meantime, I want to go to my buddy.
Kingsview CIO Scott Martin discusses comments from China’s President Xi, and the influence recent events have had on Chinese stocks.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: So it’s really a it brought in this selloff that ensues right now, not as bad as it was when we’re off with more than 500 points, the Dow up about 250 points. The Nasdaq has taken on the chin. Technology stocks in particular have been saying take it on the chin. This actually began in China overnight, in Asia by extension, after people saw what was happening. The technology sector there. And China might lay a lot of the blame for this on the reversal of fortunes and its once thriving technology arena because it’s clamping down on technology. And that is not only hurting Chinese investments there, but now technology in general everywhere. Scott Martin back with us. Luke Lloyd, back with us. You know, Luke, I mean, the Chinese might have started this, the interest rate thing notwithstanding, by cracking down on their own offerings to say nothing of what they used to do to Alibaba and all the rest showing more their military concerns than their economic ones. What do you think’s going on here and how long does it last?
LUKE LLOYD: Yes, so I talked to earlier about how you should stay away from international companies. I think China is where you should stay away from the most. You know, China probing US companies should absolutely. One hundred percent concern investors. You shouldn’t be buying Chinese stocks at this point. The regulatory headwinds that could come from both sides aren’t worth the risk DiDi listing over here in the US then being taken off the App Store in China was a big middle finger from China. They could have done that before the IPO, but they chose to wait. And then the US is already talking about reacting by withdrawing the ADR from the US exchanges. I like to invest in free market countries and China is not that at the snap of a finger they can choose to destroy a company. And unless a company was trading an extremely low valuation at a price that I was willing to pay, I wouldn’t be a buyer.
CAVUTO: It’s very, very interesting, you know, Scott, what’s also interesting is the fact that either China doesn’t much care or it wants its cake and wants to
eat it, too, which is a dumb expression because you have the cake, please just eat it. But I digress. I’m wondering whether China, you know, played this out in their heads and now is shocked at the market fallout to say nothing of growing US pressure to crack down on this sort of stuff, as Luke said, maybe just not to buy their stuff all together. What do you think?
SCOTT MARTIN: Well, it’s a hard thing to avoid, typically, because a lot of companies do business in China. China is on pace to be the largest economy in the world in a matter of years. Billions of people, obviously, the companies want access to. I’m not sure China even lets their people eat cake, Neil, which means there’s more for us in the United States. But if you look at President Xi comments just about a week ago at the 100th anniversary celebration, I guess you’d call it a party on Chinese terms. You know, the things that he said at that at that presentation were actually pretty shocking, pretty aggressive, pretty militaristic and pretty scary for the rest of the world. So when you look at what China is doing, whether they mean to cause an uproar or whether they mean to cause selloffs or not, I don’t think they really care. Neil, I think China is ready to take on anyone and everyone, and it’s something we should all be aware of with respect to how the markets, at least initially, at least as we started to figure out who the real state President Xi is, as the markets have started to figure that out, they haven’t liked what they’ve seen so far.
CAVUTO: All right, good point, gentlemen, I’m sorry to truncate this, but with this breaking news, unfortunate, we have to. We’re going to.
Kingsview CIO Scott Martin discusses market expectations, employment numbers, and earnings from the S&P.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: Dow. Wow, stocks rocking in the first half of the year with investors shaking off those price spikes at the store. So are we in store for more green? Let’s get the read from our market gurus, Scott Martin, any Gábor and Melissa Aamot. Scott, what’s the second half look like?
SCOTT MARTIN: I think it’s going to be bumpy, Charles, and it’s look, it’s great how we finish the first half of the year. There was a lot of anticipation, a lot of sentiment increase and frankly, a lot of deliverance on the part of the economy. But now the expectations are high. We’re expecting a big economic reopening. We’re expecting a lot of folks to go back to work and oh, by the way, be productive. And we’re expecting earnings to deliver from the S&P. Five hundred companies. So for my money, I think it’s more of a say watch and be more careful than we were maybe in the first half of the year just because of all the expectations that are out there, of which one or two of those is likely to fall flat, in my opinion.
PAYNE: You know, Melissa, what’s really interesting is I don’t know we’ve ever seen it. Well, once that we have five quarters in a row of five percent plus gains in the market only happened one other time in nineteen fifty-four, the rest of the next year, it was up twenty five percent. Can lightning strike again?
MELISSA ARMO: Well, I will say this, I think the summer is going to be bullish. I think the next two months we’re going to continue to be on a tear and many people are expecting that we’re going to fall and it’s just not handling. So shorts are getting trapped if you’re in the market long term and just ride it out is what I say. I think the second half of the year in the fall, though, it’s a little harder to predict what’s going to happen. God forbid something happens with this Delta variant that they’re talking about with Covid or any kind of shutdown.
PAYNE: Yeah, no doubt there’s a whole lot of things that normally investors don’t have to worry about exoticness events, things on the horizon, things bubbling up, the Federal Reserve, it’s hard to navigate it. But what do you think’s going to happen?
EDDIE GHABOUR: So, look, it’s been a heck of a six months, and I guess the reason why my Twitter handle is common sensible is when you’ve had a huge run up, it never hurts to take a little bit off the table. So our playbook is we think July, we’re going to continue to see a bullish trend upwards because we’re going to refer to that as our catch-up trade, because a lot of people have missed this move. But Jackson Hole in August has our attention and we think that’s when you’re going to start to see the markets really sell off. And we could see a pretty good sized 10 to 15 percent, because I find it hard to believe that by August, the Fed is going to continue to ignore the inflationary pressure that’s going to hit. It’s going to be higher than they’re anticipating and leading the market to believe. And they’re going to have to change your language and start pivoting. So we think that’s going to be the star of the short term correction that we will see and then we will get hopefully that Santa Claus rally that we’d like to see in a bull market. So 12 months out, we like it, but that’s our playbook here in the next six months.
PAYNE: Scott, you mentioned earnings. I think earnings are going to be phenomenal, like I think this last quarter was one of the best earnings periods ever. I think the next one is going to be better. And I hear what everyone’s saying about the Fed, but they keep fooling everyone, I think Jay Powell is going to ignore the data. What happens if we keep this momentum going? Do you want to guess at where the top is going to be?
MARTIN: Well, Jay Powell has to ignore the data, Charles, because that fits his narrative and he’s right. I mean, come J-Hole or the Jackson Hole meetings, really, I mean, he’s going to have to ignore the inflationary data that’s right in front of his face. As far as the earnings go, though. I’m with you, Charles. I’m expecting great earnings as well, but so are a lot of market participants. So is the market action. So unless these earnings are getting basters, unless they blow the doors off, I think the market might be ho hum.
PAYNE: All right. Let me switch gears here, folks, because more states over the weekend dropping those extended unemployment benefits before they run out in September. Melissa, do you think it’s working? Do you see any evidence that people are now going back to the labor force?
ARMO: As far as New York City where I live, it’s not happening. Yes, I mean, it’s a big, big problem in a city like New York where you have regular people that you need to do the jobs, the delivery people, the people in the retail stores, the people in the salons. People are not back to work. It’s difficult to get a cab. Cab drivers are not even working about 15 percent of the cabs of running the elections in New York City. We have to get people back to work because people are not working. Then it takes longer to get goods, products and services. If you’re ordering furniture or anything that you want right now, even if you call in the phone you want to pay a bill, you’re on hold forever. Why? Because people aren’t working. They’re not handling the service isn’t. Their productivity is low. People got to get back to work.
PAYNE: You know, Eddie, I say this the greatest jobs market ever, and it’s being met with the greatest general strike ever. I mean, it’s amazing. What do you think? Is it going to we’re going to get any relief. People going to go back to work.
GHABOUR: I think they are looking at jobs data. Last week, we started to see an uptick in the states that changed their stance on the extra unemployment benefits. So I think as they start to roll off, you will see an uptick. But look, the labor cost is a big issue, which is another big inflationary thing that I think the Fed is missing. My 14 year old just got his first job. He’s getting paid fifteen dollars an hour to scoop ice cream. I mean, let’s go. I mean, it’s insane what the labor market is going to look like moving forward. So it’s going to be a small, slow recovery. But I think you’re starting to see that trend happen already in a short period of time.
PAYNE: Fifteen dollars a day would have been phenomenal when I was 14. Any Melissa, Scott, thank you all very much.
Kingsview CIO Scott Martin discusses valuations in big tech, rallying stocks and dropping bond yields.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: All right, I want to bring in Veritas financial managing partner Greg Branch, along with Kingsview Wealth Management CIO Scott Martin. Scott, you’ve been cautious on this market, but does this report give the Fed in your mind, ammo to stay the course? And if so, shouldn’t that generally help stocks move higher?
SCOTT MARTIN: Yeah, we’ve been careful, Charles, with these valuations, especially in some of the big tech names now granted, we own a lot of those still and we didn’t sell them, we didn’t sell the apples, the adobes, the Microsoft, the videos. But I just want add to them here, it gives the Fed, Charles, another thirty one days to relax until the next jobs report. And the one after you’re talking about with Constance, which is probably what they need leading up into the Jackson Hole meeting a couple of months from now, Charles. So to me, yes, the market is obviously relieved from what we saw this morning. I mean, but you noted it in the intro here to the show. I mean, you’ve got stocks rallying, you got bond yields dropping, which a lot of people aren’t talking about. How much that has been reversed from the top that we saw just a few months ago when people are freaking out about two percent, three percent on the 10 year that’s totally gone. We’re headed back towards one, my friends. So it allows the Fed a little pass here, gives the market some relief. But there’s a lot baked in here, as we’ve talked about over the weeks, Charles, that I think the market needs to see happen. And I’m not so concerned or because so sure, rather and I’m concerned that a lot of that stuff not not going to come to fruition.
PAYNE: You know, Greg, of course, when we saw that spike that Scott just referenced, most folks on the street said, hey, we’re going to real quick, maybe two and a half that listen to the bond market. It’s smart. It’s the canary in the coal mine. Since then, it’s gone the exact opposite way. And a lot of people on Wall Street are saying, well, ignore the bond market. Where do then?
GREG BRANCH: So, you know, when we look at history, I think it teaches us how to react in some cases. And after the GFC, it took us actually 10 years to get beyond two percent. Now, my interpretation, though, of this data is probably the exact opposite of yours, Charles. I think that this will actually turn attention to the other of the Fed’s mandates because the labor market is well at hand. Right. We see that our problem was that job consumption problem and we see that that is starting to abate. Like you said, we had nine million openings last month. So our labor market failings were not due to a lack of job offering or job growth. It was due to job consumption. And I think that we’ll see that trend continue as we move into the school months, as we move into some of the rich benefits starting to to expire. And so the question now becomes second.
PAYNE: And Greg, let me jump in. Let me jump in one second. President Biden, he spoke this earlier this morning. You know, he took a victory lap, but he said something that struck me about black and Hispanic unemployment. And the reason I bring that up is because it feels like this has become a de facto next mandate for Jay Powell. And while, yeah, they’re there, the you know, the job growth is good. We’re six point eight million away. And those and those unemployment numbers for blacks and Hispanics are significantly higher than other folks. So it seems to me that the Fed wants to get those down. They’re going to have to go way past to two and a half, maybe even three percent inflation for quite a period of time. And I think maybe the market knows that.
BRANCH: Maybe, Charles, you know, the question is, is are we using the right tools to address that? Right and easy money and a low, low interest rate environment is great for stimulating job growth, but those aren’t the tools in terms of job consumption that would spur on job consumption. And so the larger question you raise is, are we creating jobs that are available across all segments, races, genders of our economy? And that’s a very different question than saying let’s keep interest rates low and liquidity high.
PAYNE: Well, listen, by the way, I agree with you on that, it’s just that the Fed has picked up and they think they can play a role. I don’t have a lot of time, gentlemen. So let me ask you, all these jobs, all these wages, all this money, you know, seven percent GDP, wherever we’re going, it’s got one benefits from that. Isn’t aren’t there, like, in your mind, do any retail names or these specific industries, neches stocks that should benefit at least short term from this big boost, this big bonanza of money that people have in their pockets?
MARTIN: Yeah, MT numbers, money supply numbers are off the charts, as you mentioned, Charles. And the benefits here, I mean, we’re in the thick of it. I mean, this is the fun part. The hard part, I think, is three to six months. But I a couple of suggestions, a couple ideas we put into portfolios recently because of valuation, because of, say, strong free cash flow. And I love these names. I mean, there’s so much affection in these names. Charles is like love. Southwest Airlines and Honeywell, each win, I mean, love. And when you’ve got to love the stock and how they pick these tickers, but also stuff like waste management, for example, bloomin onions, bloomin brands. Yes. And my friends, Outback Steakhouse. Yes. I think those are areas, like you said on the retail side, that help kind of go with things, waste management, kind of a little bit more of a gross initiation there. But still, it had great company, great free cash flow and ones that benefit from the flows in the markets.
PAYNE: And only thing is, you got the wrong holiday, you should have given me those right before Valentine’s Day. Hey, Greg, I wish we had more time sharing with you here. Greg Scott, have a great fourth, gentlemen. I appreciate it. Charles.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: All right, we still got a couple hours to go with the markets are looking at fairly hefty advances, certainly on the month of the quarter, the half year it all wraps up today. So how are we doing? John Tamny, Real Clear, markets editor. We’ve also got Scott Martin, Kingsview Asset Management. Scott, you know, anything can happen in the second half, but given all the crazy undercurrents and news developments and concerns about festering new cases of the Delta Covid and all the rest, it’s amazing to me that we’re looking at the gains we are, but they’re substantial. What do you make of it?
SCOTT MARTIN: Agree. Anything can happen and usually does, Neil, as we’ve learned over these last several years. I like how you set it up, though, because I was thinking, as you were asking the question, people are almost getting a little bit too sanguine about the markets these days. I mean, you talk about all this economic growth, you talk about all this job growth and it’s everybody’s like, oh, my God, the economy’s going to reopen and things are going to be great. But there are these worries about the Delta variant. I believe there are certainly worries about folks maybe not coming all the way back to the workforce. I mean, I don’t know if anybody’s tried to call a customer service of really any company at home these days, but it certainly doesn’t work out very well because nobody seems to be there. So the reality is, is that that’s just a personal problem I have. The reality is, though, is that there’s enough kind of push and pull here, Neil, going on to where I believe the markets can keep rising as long as some of the news and some of the worry stays out there.
CAVUTO: When I’m on the phone with them and say, I’m Scott Martin, dammit, usually..
MARTIN: they’re going to hang up on you.
CAVUTO: John, what do you make of this and the underlying economy, which is more data today that shows pending home sales, the best than the growth, the best we’ve seen since 2005, record prices for average homes, that sizzling retail sales, cars going over sticker price. Now because people are just, you know, in such demand, that’s a pretty good backdrop. What do you make of it?
JOHN TAMNY: Well, yes and no. Let’s never forget that just broadly, markets respond and make big moves based on surprise. And so what we’ve seen, and I think this explains the rally, is that Joe Biden was promising a major infrastructure package, which would be a tax on growth. He’s not going to get it. There is all this talk of major, major tax increases. There is no vote in a divided Congress to give Biden what he wants. And so I think there’s broad market optimism that he’s being clipped off at the knees. When you look at housing, though, that’s a different thing. Housing is not investment. Housing is consumption. And if you look at periods when housing is done best, the 1970s, the 2000s, it’s not a very bullish indicator because it signals a move of precious wealth into the consumption of something that doesn’t make us more productive or cure cancer or create better software and away from the savings and investment that actually drives progress. So to me, that’s kind of a bearish signal.
CAVUTO: All right, well, I differ with you on that, but, Scott, it is the bullish underpinning for people to be in this position at all said something, but to his point that it could be lead to longer term issues. The market doesn’t see those longer term issues for the time being.
MARTIN: Not at the moment, but you get a few more data points like we’ve seen in housing lately, Neil, and I’ll tell you, those data points I think will back up kind of what John was talking about. And I think one of the other problems about housing is, as we’ve seen, like you mentioned, in some of the periods when housing has risen so well, it’s crashed pretty darn hard afterwards. So I feel like if we continue on this wild slope upward as housing is on right now, we may soon have a similar crash going forward in the next few years.
CAVUTO: All right, guys, I very much apologize for the truncated nature of this, given all the breaking news, but very interesting read on all of this.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: You know, we focus on energy prices, what’s happening, because the last two big inflationary spirals we had dating back to the early 1970s and again in the late 1970s, they started with oil. Now, those of a certain age might recall those long gas lines in 1973, with the first big OPEC oil embargo that was under Richard Nixon, started with oil, extended to a whole lot of other stuff after that. Then a few years later, when OPEC was at it again. But we were hit much harder that second time because that quickly went from the pump to pumping up prices of almost everything else and then slowing things down as interest rates were spiked. And all of a sudden we were dealing with a slowing economy with higher prices, what they famously called stagflation. Could that be happening right now? Most experts say no. But again, the experts were saying that in both of those crises. Let’s go to Connell McShane. He’s following all of this, as is Scott Martin, at Kingsview Asset Management. You know, it’s interesting, Scott, when you look at the history of inflation and some of the more serious spikes we had, it did start with oil. It extended to other areas. Now, there were other foreign developments to keep an eye on. To be fair and to be sure. But again, oil at the center of it. What do you think?
SCOTT MARTIN: Yeah, and a lot of foreign reliance back in those days, Neal, which I do remember because I read about them very extensively, didn’t have to live through them, thank goodness, at least for the most part. But, yeah, I know just how to throw that out there, just to remind you. But a lot of the foreign reliance back in those ages, let’s say, Neil, we’re relying on other foreign countries to provide that oil and that supply to us nowadays, at least depending on where the administration stands or let’s say what administration is in power there is less reliant on, say that that foreign relationship. The other issue, though, if you just look at production in general of things that are out there that we use every day, oil is such a big part of so many things that go into what we use and what we have on our daily lives. So when you have a spike in oil prices, like we’ve really seen frankly, over the last several months, it does still bring up that fright of some of those days in the 70s when oil prices went up markedly and that affected final prices of goods at the consumer level.
CAVUTO: You know, you think about it too Connell, we have much faster markets, you know, heavier markets that can change on a dime. A lot of times that. So the reaction can be swift and it can it can also be, you know, headaches. And I’m just wondering now, localized as this is on the energy front, some of the other pressures, for example, on food related items have eased a tad, not a lot, but at least a tad when you’re out on the hustings and you’re going around the country. How big a factor those higher gas and energy prices?
CONNELL MCSHANE: I think for now they are a big factor and one of the many areas that we see rising prices, I think that same book that Scott read about the 1970s, though, would say that when you look back on that time, you also realized that there were mistakes made on the policy front and we’d have to rely on the Federal Reserve under Jay Powell to make the same sort of mistakes that the I guess, the Arthur Burns Federal Reserve made back then. And Powell, as he’s been speaking in recent days, has been adamant that they’re they’re going to avoid having history repeat itself. I think the one thing right now and some of those numbers that we just flashed up a moment ago speak to this argument that I think is the reason why the so-called experts don’t see this as a huge problem yet. You you can really make a logical argument that this is a temporary spike we’re seeing in prices. I mean, think about you know, we’ve been traveling a lot for reporting on a number of stories. It’s tough to get a car right now, car rental. So there’s a shortage there. There’s a shortage, certainly, of workers that maybe it gets resolved later in the year. The shortage of computer chips that we reported on over and over. So some of the shortages that we’re seeing will likely resolve themselves over time. So the idea of the higher prices in the energy market spreading all over and leading to a long term, higher prices across the board does seem to be less likely. And I think that’s what Jay Powell is talking about. No, please write.
CAVUTO: You know, we’ve been also following Bitcoin, that’s a proxy if things get a little tenuous or a little dicey that people have fled to Bitcoin as they fled the gold. Mark Cuban comes along and says, Scott, that as things stand now, Bitcoin is better than gold. Now, he’s a pretty successful investor in his own right, so he’s not giving up on it, even with the whipsawing. What do you make of that?
MARTIN: If you’ve got Mylanta handy, yeah, bitcoin is OK. I mean, Bitcoin is crazy. I mean, look at some of the movements overnight, Neil and Bitcoin in the last few days, it’s been wild. We like gold better just because it’s less volatile. I believe it’s still a little bit more reliable from a price standpoint. But look, if you’re up for some of the volatility that that stands to to reckon in Bitcoin, great, you just got to buy on some of these dips. I mean, you really have to buy when it’s darkest before dawn in Bitcoin. But it is, to your point, a declaration as kind of gold is against government policy. In this case, all the printing that’s going on, all the spending that’s going on in D.C. tax policy coming down the road here, asset classes like Bitcoin. like Ethereum like gold, in our opinion, which we own. Those are asset classes to hold in your portfolio as a subsequent hedge to further erroneous government policy. That’s sure to come down the road here.
CAVUTO: You know, this battle, you know, back and forth with the Bitcoin bulls versus the bears, obviously a great deal is predicated on on having it available, having it readily available. And I guess, you know Connell, when China crack down on mining and even crack down on countries that that do mine it and explore for it, I was just thinking here, well, you might not be able to get your hands on anyway, but I would always think that that would help the underlying Bitcoin arena, all the crypto currencies, and that it would be a limited amount of supply that for which is a considerable amount of demand. I haven’t seen that part work out, though.
MCSHANE: It might, though, over the longer term, right? I mean, because the laws of supply and demand shouldn’t change, but it has been interesting to see what’s been going on in China. And that’s certainly, I think, part of the battle we’ll see back and forth, maybe not as reported as it should be kind of geopolitically between the United States and China over these these crypto miners. And that will probably continue. I mean, broadly speaking and Scott’s the the investment guru among us, I don’t even attempt to play one on TV. But having the idea of having at least part of your portfolio in some alternative investments doesn’t seem so crazy, depending on what your risk appetite is. And, you know, you can make a decent return and in Bitcoin is not going away. So the idea of having some portion of your portfolio there as opposed to all of it or taking huge chances still doesn’t seem to be too crazy to me, especially if I end up being right on that supply demand front over the long term.
CAVUTO: I like to put all my kids education money on the line with Bitcoin just for the hell of it. All right, this works out, kids. It’s going to be great if it doesn’t. Well, your mom and I are going to have a party. But guys, don’t go away too far. I want to touch on you with what’s happening right now globally.
Kingsview CIO Scott Martin discusses what the return of professional sports and the opening of a new Las Vegas mega casino means for the economy.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: Making sure you have air conditioning is a big issue in Vegas right now, where temperatures later this week are going to be hovering around one hundred and ten degrees. But it’s a dry heat, I’m told. But that has not stopped at four point three billion dollar mega casino from opening up on the strip. The first new opening we’ve seen on the strip in the better part of a decade. Scott Martin here comment on that. Connell McShane as well. You know, if that isn’t proof of the demand and the comeback going on in Vegas, where I’m told in this particular place, rooms have been pre-booked. That says a lot, Scott. What do you think?
SCOTT MARTIN: It does, and if that’s any indication that the three of us are going to get our annual Vegas trip back on the schedule, hey, I’m all for it. Here’s the other thing. And maybe that was somebody else maybe got you guys confused with somebody else. But the point is, Neil, look at some of the sporting events going on….
CAVUTO: Varney, I think it was Varney
MARTIN: That’s right. It was Varney. That’s right. It’s easy to confuse it, especially late at night. But look at how the venues are filled. Look at how the just excitement is surrounding the NBA, the NHL, MLB and, of course, the NFL season that’s going to have full stadiums out in the fall. Vegas is coming back in a big way. Sin is back in. And the fact that we have all these sports now getting really exciting and some of the games and especially like last night with the Phoenix L.A. game, those are reasons that Vegas is back with a vengeance and probably going to be even back bigger than it was before the pandemic.
CAVUTO: All right, so apparently these are all sports references you were making, Connell, what do you make of what’s happening there? Again, I always say you’ve been going around the country more than any other anchor business reporter, and you’ve seen it for yourself. But in Vegas, they were stumped. They were no business conferences, crowds. I mean, they certainly need this, don’t they?
CONNELL MCSHANE: Yeah, they’re almost back, I mean, the last numbers that we had were from April, so a few months ago, and they were at seventy three percent of their pre pandemic levels with over two and a half million people going to Vegas. So they’re almost back by now, you would think. And certainly as we move into the fall, they’ll be back to kind of where we were. So, yeah, I mean, on a domestic level, I think Vegas is where it needs to be or even above that. There’s probably two challenges that remain. One of the business conferences they’ve started to return. But that’s going to be slower, right? For a couple of reasons. One, I guess, is the pandemic, but the other is that a lot of especially big businesses realize that they don’t need to spend the money on those types of conferences anymore. You might not see the attendance you saw in the past. And the other thing is the international visitors for now. And despite what you hear about Scott’s propensity for for gambling when he hits Vegas, some of those international visitors, those are the real high rollers. So they need to get them back as well. But on the domestic side, you need to get more of those guys.
CAVUTO: They need to get more of them real quickly.