September 1, 2023

Kingsview CIO Scott Martin on Fox Business Cavuto Coast to Coast 9.1.2023

Click here to listen to the full interview.

NEIL CAVUTO: I want to go to Scott Martin. He’s in Chicago, but he knows about crime. Certainly a lot of it happening in his neck of the woods. Scott, I do understand where the government is coming from. You know, they don’t want people to be in harm’s way. I get that. But putting the burden then and the costs on the retailer, that’s adding insult to injury, isn’t it?

SCOTT MARTIN: Yes. And it kind of takes away with what I think the retailer expected, the city and the community to do for them and paying the taxes and being a good steward of that community, Neil, was to protect their business. And I mean, you want to talk about how much proliferation this is doing to these businesses or at least into the community itself, into the problem. It is you’re looking at $100 Billion this year of retail theft across the board. So that’s something that’s now eating into earnings. We saw that with Dollar General just recently and obviously some other companies, too, on the apparel side, Walgreens to name one. So those are areas to Neil that are starting to get affected as far as their stock prices.

CAVUTO: You know, I was talking to an analyst earlier in the week, Scott, when alluding to what’s going on at Dollar Tree, and I think it was Dick’s Sporting Goods and even Nordstrom that had this telegraph that all this thievery and everything is impacting their bottom line and could impact sales going forward. And usually it starts he said like a brushfire like that that more will will start doing that. Whether it’s a legitimate excuse or real one, it doesn’t seem to matter, but it is real enough that they’re citing it. Does this make you think twice about retailers?

MARTIN: It does and it should, because as you mentioned, the brushfire becomes a forest fire if somebody doesn’t do something. And I don’t think it’s the actual employees at the business or the retail, it’s actually the the police force, the community, the community leaders, obviously those in charge politically that should step up and take care of this. But instead, like you mentioned with William, they’re they’re actually putting it back on the retailer, but saying you can only do this and you can’t do that and therefore, that’s not protecting their business.

CAVUTO: Let’s talk about September. We’re kicking it off today. Fairly muted start. We had a big pop on the jobs data that it would probably not prompt the Federal Reserve to hike rates at the September meeting later this month. Now kind of flattish, but September people don’t know. This is actually a scarier month in October. Historically. How do you think this one’s going to go?

MARTIN: Yeah, and you’ve got 911 in there. Two Neil affecting the data points. But look, I think you look at the year to date and you see that we’ve probably got some air under this market, meaning there’s probably going to be a lot of volatility here in the fall. Probably the market I think is going to fall a bit back and then we’re going to see buyers come in just because a lot of these weak hands, my friend, came in towards the end of July, early August, chased these prices higher and then came right out of there as fast as they came in. So once a lot of that last, say, dollar money comes in and then comes out, that’s typically when you have your stock price lows or at least the low of that cycle. And then good long term money comes in and takes prices even higher than they were before. All right.

CAVUTO: We were mentioning before as well on this show about the strength of the consumer. You’ve marveled at that as well. Sure enough, in this latest jobs report, where there is growth, substantial growth that’s in the leisure and hospitality industry that’s been leading the way. Other sectors are slowing a little bit. Play that out for me.

MARTN: I think it stays that way, actually. I mean, you take a look around, you go to a restaurant, you travel, you try to book something, say like a sporting event. And there’s still a lot of that demand in, say, that hospitality space. A lot of the services sector is still doing very well in travel, of course. So I think that continues, Neil, in to say the holiday season here. But then next year we probably have that maybe reset or that restart with regards to maybe all these Fed rate hikes coming to roost and therefore probably putting through a recession of some kind, maybe a very short lived one, a very shallow one. But still, I think through the end of the near year, you can count on the services and the hospitality sector to lead.

CAVUTO: All right. As far as the market and where it goes the rest of the year, last year was horrible. This year is the mirror opposite of that. You think that will continue being the case? Do you think we get now into a more historical norm or is it just sort of taking it month by month?

MARTIN: It’s month by month, but I like where we are vis a vis where we were a couple of years ago with the Fed just starting to hike rates, say, last March in 2022. But however, I think that’s the key point here going forward is that what is the Fed going to do going into the election year next year? Because they’ve talked about slowing down the rate hikes. They’ve only kind of slowed it and then talked about more rate hikes coming down the pike. So if they continue to hike rates, we see that affect stock prices. We’d see that effect. The consumer leverage obviously gets more expensive. That makes the world go around, my friend. That makes the stock market go up. So as leverage gets more expensive, stock prices will tend to fall. So therefore, it’s really on the Fed here to kind of take a chill pill and relax. On what they’ve done so far with regards to the Fed rate hikes.

CAVUTO: All right. Yeah, we’ll see if they take that chill pill. Maybe maybe just this month after that. Anyone’s guess. Scott, always good to see you, my friends. Thank you, Scott Martin On all of that.

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