June 17, 2023

Kingsview CIO Scott Martin on Fox Business Cavuto Live 6.17.23

Click here to listen to the full interview.

Program: Cavuto Live

Date: 6/17/2023

Station: Fox Business News

Time: 12:00PM

NEIL CAVUTO: I want to go to Scott Martin right now, Kingsview Asset Management CIO. Very smart money guy. But if you don’t mind, Scott, I’d like to veer into more of the politics of this, and I usually don’t do that, but I have a method to my madness here. With inflation now at this point becoming off its worst levels, I should say, and subsiding or that’s the hope, at least in the White House, is clinging to that as the president arrives right now in Philadelphia. That was not happening to Jimmy Carter when he was running for re-election in 1980. In fact, inflation was worsening. The uptick was getting much, much more nasty. And we know how that worked out for him. But could the opposite be benefiting Joe Biden? In other words, if we’re coming off a worst level where wholesale and retail inflation is now half what it was a year ago and continue to go down, job gains continuing to go up, that that that gives him 17 months to keep that going. And by then we’re we’re saying what inflation what do you think

SCOTT MARTIN: And that and that Neil becomes the lead narrative too. And it goes to show you, my friend, how if the government just gets out of the way and doesn’t try to affect the economy, say, in a good or bad way, as they usually do, inflation actually takes care of itself. The free markets operate. So yeah, Biden has something to stand on here. But more of the fact just because he’s been out of the way as far as his government policies. But it does go to show you, though, still, as Lydia pointed out, inflation has come down quite a bit, but it’s still very high and consumers are feeling it everywhere.

CAVUTO: You know, it’s interesting when they do polls on this president. Of course, overall, his poll numbers are worse than any prior White House occupant. I was surprised to see just the breadth of that, even with the so-called improving economy. Now, obviously, people have to feel it. We realized ironically in 1992, we were coming out of the recession that was bedeviling George H.W. Bush, George Bush senior. He still lost to Bill Clinton because people weren’t feeling it. What do you think about the difference this go round or too early to tell?

MARTIN: Folks have definitely felt it at different times, Neal. And I think the tough part that Biden has ahead of him is that the inflation has been everywhere. It’s been in food, shelter, apparel, travel. So if you try to avoid it in any part of your life, you really have failed in doing that and you’ve really felt the higher prices. So Biden is going to have a tough time explaining that away. But I think the trend is right now, his friend. And if you have the Federal Reserve now maybe at their last stop here, as far as their last interest rate hike may be coming up in the fall, maybe a couple more. But towards the end of their, say, mystique that they’ve been putting on in the last year or so, it goes to show you that the economy is functioning pretty well and will likely take care of itself going forward.

CAVUTO: By the way, as the president is making his way to his motorcade, it’s going to take him into Philadelphia later on. John Fetterman is with him, the Pennsylvania senator. You have to admire that. He feels no compulsion to dress up for the president, but wear shorts. You know, when you’re in the United States, Senator, you could do what you want. So there’s a quasi way of admiring that. But anyway, let me get your take on where this race is going and the backdrop of the economy. And I’m wondering the solution that the candidates are pushing to make things better, The hands off approach this administration has with the Fed, fingers crossed that it’s not going to overdo the tightening. But do you buy that, that that the Fed could destroy all this by overdoing the tightening, even with the pause and even with the hint that more rate hikes are coming later this year?

MARTIN: Yes, I think they already have overdone it, Neil, based on the data they have today. And that’s really the challenge I think the Fed has, is they usually do these interest rate hikes or cuts and then wait to see that impact, my friend, in the markets and economy. And they have not done that this time around. They’ve just kept pumping the gas pedal on the interest rate hikes through the last ten, say meetings, except for this most recent one this week. So this, I guess, goes to show you, though, that the Fed and the economy kind of do say dance together, but they’re not always on the same dance floor. And the respect that you’ve had the stock market doing very well as far as the, say, the performance of stocks vis a vis the rate hikes. But it goes to show you, too, that the markets love liquidity. They love low interest rates and they love what the Fed had to say this week because of the fact that in high interest rates and promise them more coming down the road. But that’s only if the data stays hot on inflation.

CAVUTO: You know the backdrop as well with this inflation news or not, because it was originally greeted surprisingly by the markets, they tanked on the notion that we’re going to be more rate hikes to come. But when all was said and done, we had a winning week for the S&P. Right now it’s higher, the fifth straight week, the Nasdaq eighth straight week. This market seems to be more than just climbing a wall of worry. It’s jumping over it. What do you make of that?

MARTIN: Jumping over a few of them? And I think that’s typically what we see in times like these when there’s just so many hits. I like to call it haters out there with respect to what the markets and economy are going to do this year. And they’ve done almost the exact opposite. So a lot of folks that had cash on the sidelines, a lot of folks that were rebalancing portfolios even say at our firm and some of our portfolios, we were adding to some of the more growthy areas as they started to come back. You have a lot of that money, Neil, that was on the sidelines chasing these higher prices. And then you mix in, say, the AI craze, get past that banking crisis we had in March and you’ve got a recipe for higher stocks. I. For the rest of the year.

CAVUTO: All right. I want to talk to you more about that and what dads can expect. You’re a young dad yourself. I understand your kids are trying to pitch in to get one share of Nvidia stock. But but that that’s coming up later in the show, so don’t wander too far. My friend Scott Martin. A very, very good read of all things markets.

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