Kingsview CIO Scott Martin discusses the interest rate curve, tech earnings, the airlines, Telsa and restaurants.
Program: Making Money with Charles Payne
Station: Fox Business News
CHERYL CASONE: I want to bring in now advisor groups Phil Blancato and Kingsview Wealth and Fox business contributor Scott Martin. It’s great to see both of you as always. And Phil, I’m going to start with you. I just mentioned this with Bob picking up on earnings. Earnings are coming in hot next week. Do you think we’re going to see anything to get the market out of this Fed rut, especially the banks who normally benefit from higher rates?
PHIL BLANCATO I do. You’re looking at more than half of the S&P 500 has a buy rating right now, 57%. That’s the highest number in ten years. Add to that, I don’t disagree with Bob. We’re just getting back to normal. A normal means normal earnings growth. The normal earnings growth means a positive. S&P 500 is not negative. So we’re going to get through some of this volatility in the next few weeks. Here, we hope to see a resolution, Ukraine and Russia. But more importantly, I think the markets prepare for a Fed hike and the earnings season could give us that little boost we need when things are going to be more positive than negative.
CASONE: Now, Scott, what are you looking at?
SCOTT MARTIN: I agree with Phil. I mean, I think financials are a really interesting aspect of the market right here, Cheryl, because to your point, I mean, the interest rate curve, depending on whether you look at threes versus sixes as far as six months or you look at the three versus the tens, I mean, it’s it’s kind of crazy how you can kind of parse that out and find your own reason to predict the next recession. But the reality is the banks are in good shape. So we’re actually looking at financials here, Cheryl, kind of looking at what I would also say is maybe the tail end of this great reopening trade. I mean, the great reopening trade in our opinion, was March. I mean, that was like the second half of March. So now it’s this April angst, if you will, Cheryl, as we come in to tech earnings, what their outlook and guidance is going to look like going in here to say Q3 and Q4, because those are the areas of the market where we’re likely to see the biggest bounce back once they finally hit some firm lows.
CASONE: Oh, gosh. Okay. Phil, I thought that the great reopening trade was last year story. Maybe not. What do you say?
BLANCATO: I completely agree. I actually think there’s more room to run. I when a consumer got over $2 trillion of spend, look at the regional banks and how they’re set up. Well, they’ll make money and cash balances and be able to loan some money to consumer. Actually, they were in the middle stage of this reopening trade. I think there’s still plenty more to come. I think you can still make money in the hotels and the airlines and the restaurants, and you do better than the growth sector, which gets hurt by rising rates. What’s pivot to a cyclical recovery based on consumer spending and you’ll do just fine in your portfolios. Case in point, value stocks this year are mostly up, not down. Growth stocks are down. So let’s parcel it out for what it is. If you were a tactical mover in your portfolio and you favored the consumer here, you’re doing just fine. I think we’ve forgotten that.
CASONE: Yeah. Now, I’m glad you brought up the airlines. Scott, I want to take this to you. You’ve got Spirit Airlines saying that talks are underway for a $3.6 billion takeover by JetBlue. Do you play either of these stocks or spy another buyout in the works? And we got to bring in the whole frontier side of this drama, which is turning into kind of a movie, to be honest with you.
MARTIN: Yeah, it’s going to be a total catfight. Don’t play those airlines because I don’t fly them. I got to tell you, though, guys, I disagree. I mean, if you look at the airlines and look at some of the restaurants, I mean, the reopening trade looks like dog food, frankly, in the last couple of weeks with respect to those stocks. So it looks like they’re already turning over. So my point is the following. I think the reopening will continue to happen. But you guys know this as well as I do. The market has front run just about every moment of, say, this COVID effect in the last two years. So with respect to how the market does bounce back, I think finding reasonable, appropriate valuation, which is not in the airlines right now, frankly, Cheryl, is how you’re going to make money in this market if you do get back into growth. Phil’s right. Value has been, in a word, valuable this year. But I do think that growth, trade does reignite, especially if we get further and further away from this COVID veil that we’re trying to lift.
CASONE: All right. Let’s pick up on that growth story, Phil, with you and this issue with Elon Musk. I mean, again, another piece of drama playing out. This makes businesses fun, right? You’ve got Elon Musk. He’s going to be meeting with Twitter employees after being appointed to the board. They’re now saying that he’s going to meet with them. We don’t know when, but are you going to buy Twitter or Tesla or anything that comes of this? And what do you think that this really means for Twitter? And also, I got to mention, Phil, those social media stocks were all getting a bounce when all of this news broke earlier in the week.
BLANCATO: So I’m not a fan. For example, a little comparison, Delta Airlines trading down 8% of the year below its historical average. To me, at the cheap stock, that’s got a chance to grow much higher. So I’ll take the other side of that versus the Twitter that’s trading above its P average. Does it have the kind of revenue we’re looking for? Valuations that don’t make sense to me. A classic growth story, looking for a recovery trade when interest rates are going higher. Just because Elon’s in it doesn’t mean it makes it a great stock with great earnings growth, especially as interest rates are higher. So I say, no, it’s not a buy. I’m not there yet. Maybe in the fall. Look back the growth. I just think they’re still too expensive.
CASONE: Well, maybe it’s too soon to see what he’s going to do. Scott But there is a lot of conversation around the fact that he might make it more, more free on Twitter, that they will kind of back off of their woke agenda of silencing let’s be honest here, conservative voices.
MARTIN: Yeah. Because Elon Musk says they should. I mean, look, I love Elon Musk. We own Tesla. It’s been great. And other than sharing a birthday with him, which is June 28th, thank you very much. I don’t think there’s much he can do with Twitter, honest to God. I mean, Phil’s right. Like that’s a tough mountain to climb. We actually sold our Twitter that we had for a lot of our clients this week. Just because we got that final bounce, because the stock has been a disaster.
CASONE: Yeah, we’ll have to see. I mean, I went on the air in the early days, you know, questioning Elon Musk’s outfits and words and, you know, sometimes his relationship choices. And I’ve been wrong on all of that. So, you know, who knows? Phil Scott, guys, thank you very much. Appreciate it. It’s good to.
Kingsview CIO Scott Martin discusses Elon Musk and Tesla, spending problems, and whether expenditures will come under control.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: Scott Martin joins us. He always says controversial things, but you know, he’s good at what he does as is Susan
SCOTT MARTIN: By accident,
CAVUTO: by accident. I hear you, buddy. They it very nice hair, very nice hair. Scott The most important question, then, is with all the money. Why does why does Elon Musk cut his own hair? What do you think?
MARTIN: Well, from a guy that doesn’t cut his own hair, I think he feels like he can do anything he wants. And as Susan said, he’s the richest man in the world. A lot of that is stock options, but he’s created a lot of wealth for others to make money besides employees, also investors. So I think Neil, he kind of goes to the beat of his own drum and obviously, depending on who he’s attacking over Twitter on any particular day, he tends to win those arguments too.
CAVUTO: You know, and and you raise a good point when talking about, you know, we tend to look at these things linearly, like how much you’re paying a tax. It turns out he’s spent quite a bit in taxes. Thank you. But even if you were to take and confiscate all the funds of the richest, it wouldn’t come close to addressing, you know, the twenty three, twenty four trillion dollars in debt. We just pile up pile up. That isn’t the result of not taxing them enough. It it’s really the result. And this has happened to Republican and Democratic administrations alike of spending much, much more than we have.
MARTIN: That’s right. It’s not a tax problem. It’s a spending problem. And obviously, if you look at the Treasury Department receipts over the last several years, we’re at record levels. So that tells you they have the money, they just overspend. So will they ever get it together as far as the Democrats or Republicans no, because the government likes to spend and where they spend on things that are actually worthwhile or whether it’s or whether it’s waste fraud and abuse is up to anybody’s debate. But the regardless point is that they do overspend and they have the tax dollars to actually be a little more responsible. But they’re not, you
CAVUTO: know, long before you were born, probably when we had the the Bill Clinton internet boom going on and we were had surpluses for a while. It really took something like that to to pay our, you know, our debt down to size. Certainly, the deficits went away and started surpluses. But short of something like that was, do you ever think we’ll we’ll we’ll get this solved?
MARTIN: I don’t know, because it’s kind of funny money, I mean, the dollar is the world’s reserve currency to add an increase in the debt ceiling, as we just recently did, or to add numbers to a balance sheet that’s at the Treasury Department is a win. It’s not really anything that takes a lot of work. So there’s really no adult in the room when it comes to the spending that we get out of D.C. and therefore I don’t think they’re going to stop.
CAVUTO: All right. We’ll watch it closely. Scott Martin, thank you very much.
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
Kingsview CIO Scott Martin discusses buying opportunities, volatile stocks and the electric vehicle space.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: All right, at such a loss for the Dow here, we’re still waiting, by the way, on really in the electric vehicle maker backed by the likes of Amazon and Ford. This one has been a fascinating story to follow because it was originally going to be priced in the 72 to 74 bucks a share level that was essentially doubled from the early talk. And then now they’re saying, you know what? It does debut maybe a hundred fourteen or fifteen dollars a share. So this thing’s like a rocket here, although we be watching it closely. But again, still waiting for that debut, a good opportunity to talk to Scott Martin back with us right now. Kingsview Asset Management. You know, it’s got the right IPO at the right time can tell a lot about what clicks with investors too early to say, whether that you know this electric vehicle maker will be right. But it does seem to get the advanced positive buzz. How do guys like you decide where attention is warranted and where maybe standing back is just as well?
SCOTT MARTIN: Yeah, I think get a look at the space first and foremost, Neil. As far as where some of these companies are located, you mentioned that this happens to be in the electric vehicle space, which is very hot. Obviously, the price is being chased up as we speak. So that’s an area where I think you’ve got to start with respect to where the company is operating. And then secondarily, look at the pricing. As you mentioned, it’s already called up another 30 points above the initial IPO price. Usually don’t chase things like that, but companies that actually come in say around the appropriate IPO valuation, those are companies that we like to buy into because usually the chasing starts happening after they start publicly trading.
CAVUTO: You know, a lot of people get into ideas of all sorts here, and that does seem like you just stated to be a fairly, you know, reliable rule of thumb that the faster you come out the gate, sometimes the more problematic, the longer term. Conversely, you know, sometimes when you stumble, coming out of the former Facebook comes to mind. It took, you know, almost a year before things stabilize and then it was off to the races. All these controversies notwithstanding. Do you play these at all or do you just hold off until the dust settles?
MARTIN: We do play them. You mentioned Facebook. What a great buying opportunity that was felt by about 50 percent. And then those who were lucky enough to scoop it in the high 20s did very well. Bumble is a recent one that did that as well, Neil. And then, of course, Airbnb as well, and DoorDash too. So we do play in that space. But as you mentioned, I mean, some of these things come hot right out of the gate, and they’re just not good stocks to chase. But as long as they come back with some relative valuation, as you mentioned with the latest IPO that we talked about just a second ago, I mean, they’re losing money hand over fist every quarter. So we don’t chase ones that aren’t as fundamentally strong. But there are companies out there coming public that are attractive.
CAVUTO: You know, that’s to Tesla for a second electric vehicle players. But you know, the stock lost about $2 billion in market value over the last couple of days. And now it’s up about it looks like at about 40 bucks or so, it’s around one thousand sixty four a share. But what’s interesting is it all started with Elon Musk, you know, putting out the Twitter this poll to say, I think I should sell some stock up to 21 billion. He lost more than 50 billion on paper in the interim. But it does remind you how dependent that that stock is, you know, joined at the hip to its owner.
MARTIN: Yeah, I mean, he is a rock star, and so what he does affects all aspects of the company and certainly the stock price. It’s kind of funny how he did take the the poll or the opinion of Twitter. It end up costing him more than he actually sold. But the reality is that stock’s volatile and it’s at some near all time highs, and therefore it’s going to move around quite a bit. But that space, the electric vehicle space is so hot that that company is going to do very well, especially with a lot of the cars that they have coming down the line.
CAVUTO: Thank you, my friend. Scott Martin. Following all of these developments.
Kingsview CIO Scott Martin discusses holding volatile stocks, Tesla as a long-term investment, and what might surprise investors and analysts.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: All right, stop me if you heard this before, but Tesla is a stock of the day. I mean, it’s a top performer in the S&P 500, bringing a consumer discretionary to the top of the pack. Morgan Stanley up their target to twelve hundred. This after their hurts, they’ll want to bring in Scott Martin and Michael Lee to discuss Mike, you buying here in this on Tesla?
MICHAEL LEE: Well, look, it depends what your thoughts are on Tesla. Or if you’re a trader, I think you buy here and play the momentum. But you got to have an exit price mapped out because Tesla for years has had no correlation to any reasonable valuation. In my mind, it’s the original meme stock. And today there was a gamma squeeze combined with some fantastic news for them and the stock just exploded. If you’re a longer term investor. I’ll wait for some bad news to come out, which kind of invariably happens with kind of the National Transportation Board investigations of the company, the Elon’s propensity to over promise and under deliver. So I think if you want to be a long term investor, you wait to get in. I think if you were a trader, you could probably make some fast money on the back of this momentum
PAYNE: And so interesting with all of that. And then that’s sort of been the backdrop for the last half dozen years. It’s a trillion dollar stock, and Elon Musk is by far now the richest person on the planet. You know, Scott, when reminds me of is, I think about all the people who stopped out of this stock over the years. And I think there stocks that you have, regardless of how volatile they are, no matter what you plan to hold, you’re going to hold and you’re not going to let volatility get you out of this stock because I’m pretty sure I’ve been stopped at a Tesla in the past.
SCOTT MARTIN: Yeah, for sure, and I think like like Mike said, you know, it’s stuff that kind of has become meme ish. I guess if that’s a word, you know, stocks that have gotten this fanfare and then just been pushed down because of of things surrounding the company, I mean, Facebook, certainly one of them over the years, things like AMD to, you know, where have they just been slammed because of supply issues and other things a couple of years ago with respect to product development or product completion? So I think the intersting thing on Tesla for me, Charles, just quickly is that for me, it’s actually not really a trade right here. I think it is a good long term investment. I think the stock’s pretty much overdone considerably here to the upside, at least short term. But gosh, this is still to your point, a story of Tesla that’s maybe, you know, rags to riches or Ali to the highway with respect to how the stock has done. And I think it’s a great company owned for the future, but for many, many years in the future as well.
PAYNE: I think if you think of it that way, then you won’t get shaken out. You won’t get spooked out on those periodic air pockets that it does it. Let’s talk about Facebook, guys, they report after the close. It’s just simple, Mike. Buy, sell or hold? I mean, where are you on this stock right now?
LEE: Yeah, I buy this into into the close, and then if if for whatever reason, it sells off more tomorrow, I buy more. I think a lot of these names tend to go into going to earnings calls with enormous expectations. I don’t think that’s the case for Facebook. I think there’s a cloud over it. I think they’re going to blow through it. But on the odd chance, something on the call spooks investors, I’d be adding more.
MARTIN: Yeah, I think Mike’s right expectations have come down a bit, which is good. You’re going to get a great opportunity to pick up some of these names in tech land this week, and I do believe that the one thing that could surprise investors and analysts if they do start talking about maybe ameliorating some of those security issues are some of the content issues that have been plaguing them for the last few months. So that was what I’d be kind of concerned about. If you’re not in the stock here and looking to buy it after earnings, because you may get some of that news.
PAYNE: In your mind, what would it be better to do? Buy it now before the close or wait until after the numbers come out and then look at it in the morning?
MARTIN: I’d buy it before the close
PAYNE: And real quick got, let’s say, a minute ago, is there something that might that people should be in this week before they report?
LEE: Besides Facebook, I don’t think so, a lot of these big fake names have a tendency to sell off fast and hard after their earnings, basically something on the call spooks investors. And that’s the time you want to add them because by the next call, they’ve almost completely recovered.
PAYNE: And to that point, you could have bought Netflix on temporary weakness last week and Tesla on a little bit of weakness for a brief moment. Last week, Scott Michael, thank you both very, very much.