April 7, 2023

Kingsview CIO Scott Martin on Fox Business Cavuto Coast to Coast 4.7.23

Click here to listen to the full interview.

Program:  Cavuto Coast to Coast

Date:  4/7/2023

Station:  Fox Business News

Time:  12:00PM

NEIL CAVUTO: Scott Martin is here at Kingsview Asset Management. Gary Kaltbaum Kaltbaum Capital Management, both geniuses and both here to weigh in. Scott, to you first on what you made of the jobs report and kind of the tentative response we saw from a market that’s not technically open but liking what it saw.

SCOTT MARTIN: Yes. Good report, Neal. Right down the middle of the fairway, as we’re seeing at the Masters these days, or at least I was when I was kind of flipping back between the report, the reaction and then the golf, because, look, the market is in that mood, as you mentioned, to kind of I think take things say a little bit better these days than it had been because things are becoming a little bit more predictable, certainly along the lines of inflation, say, topping out or leveling off. And the Federal Reserve, depending on who you listen to, whether it’s Jim Bullard or Loretta Meister this week looking at kind of ending this rate hike pilgrimage that they’ve been on for what seems like forever now. So as long as these reports come in, as you mentioned, right along the lines of expectations or in some cases with wage growth a little better than expectation, I think you have a reality going forward where the Fed steps out of the way and the market can take over here and go up.

CAVUTO: You know, there’s a flip to that, though, Scott, and maybe I could explore with Gary that given the inherent job strength, the Fed has wiggle room if it wanted to, to go ahead and raise rates again in May. What do you think?

GARY KALTBAUM: I think the Fed is watching these job numbers and they continue to be strong. I think the Fed’s got another quarter point in it. But, Neil, the ten year yield is down at 3.4%. So I think they got room to actually cut. My biggest worry and why why I’m wary is what the markets are doing. The three month Treasury bills at 5%. The inversion is like the worst I have seen pretty much in history and very often presages worry. And I just have to add, in the last couple of weeks, the markets went after everything economically sensitive from Caterpillar and Deere to so many other stocks in the industrials. I mean, they really crumbled. And the best stocks in the market over the last couple of weeks are the food, drug beverages and utilities, the most defensive recession resistant areas. So I am wary on the economy right here. I am wary about a peak in the job market and a peak in the economy. I hope I am wrong.

CAVUTO: You know, it’s interesting when you look at the breakdown of the report and where the jobs are gaining. No surprise. You know, Scott, in the latest period, leisure, hospitality, something in Gary’s neck of the woods he’s used to seeing in the Orlando area with all the amusement parks and destination sites. So not a surprise there. That would increase right over 72,000. But that momentum is beginning to slow a little bit. And, you know, a gain is a gain, I grant you. But that’s been the ringleader and now it’s not as much. What do you make of that?

MARTIN: It has been the ringleader, Neil, in some cases, I think a lot stronger of a ringleader or a better ringleader than we expected along the way. And we got better data and leisure and hospitality and spending that we thought. But the craziest thing, though, for me besides Gary K, going to Disney World every day, as he does as I wish I could do, frankly, Did I just hear him talk or advocate maybe easy money from the Federal Reserve? I mean, Fox News alert here. It’s shocking to think about this, Neil, but that’s the other point. And Gary K is right. And if he’s on board, I’m on board. If there is a slowdown coming, say, in housing, as you mentioned, with the consumer bank lending, the Fed does have some wiggle room, in fact, quite a bit here, I believe, to start cutting or start getting easy again, which probably does support market prices here, at least to go, at least to be steady, but possibly to go up in the future because the market, as we all know, loves free and easy money from the Fed and or the Treasury.

CAVUTO: You know, and Gary, you always get sick of this one. I do mention where you are in Orlando, but that is sort of like the microcosm of this, you know, hospitality and leisure juggernaut. And I’m wondering what you’re seeing there, because I’ve always argued, you know, when you look at the economy and the aggregate, we’ve got plenty of problems with the banking thing. Don’t get me started. And that we’re not maybe over that, but the one thing you could always go back on is job job gains that we didn’t see during the Carter period with stagflation and all the rest. And we still see people freely spending on those very pricey Disney tickets and universal tickets and and packed restaurants that you’ve alluded to. Is the consumer going to remain that resilient? What do you see happening?

KALTBAUM: Well, it better. The consumer is about 70% of the economy. And as I’ve said to you, Neil, the two things that are sticking out for me is savings rates are plunging and credit card usage is skyrocketing. I don’t know how long that can last. Now, if you use Central Florida as an example, it’s still going great. Guns fly every week. And all I can tell you is the adults, we are mouse ears going in and out. And I can tell you this weekend, Disney World, you can’t get in unless your last name is Cavuto. It is sold out. So business is very good business. Business is very brisk here. 75 million people show up every year, 75 billion into the economy. So that’s going great guns. But to me, I just watched the job market. I watch the consumer. If we lose that, I think we have a fragile, debt laden economy. Let’s hope they continue to spend like crazy.

CAVUTO: All right. We just don’t know. I do know that as soon as you mention my name, though, Goofy popped up in the video there. I don’t know whether that was deliberate. Yeah. By my tech staff. Gentlemen, hope you have a wonderful, peaceful weekend. Great seeing you again.

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