Kingsview CIO Scott Martin On Fox Business Live 1.14.25
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CHERYL CASONE: So here’s what’s going on. Markets are paring their earlier gains after wholesale inflation came in lower than expected for December. That PPI number—yields are actually now up. They had moved lower earlier on the 10-year and the 2-year. Let’s get the read from Kingsview Asset Management CIO, Scott Martin. Scott, there’s been a role reversal here. We had a strong triple-digit gain when this economic data crossed at 8:30. That’s all gone. What’s happening?
SCOTT MARTIN: It’s bizarre, isn’t it, Cheryl? I mean, what does the market want here? We’ve got a cooler-than-expected report, and the market reverses, meaning rates go up again and equities go down. I’ll tell you what, Cheryl, I think this is all about the Fed. I’ve been talking about this with you and others on the network for the last three months. The Fed is off-sides here, and they need to get control of interest rates—like Janet Jackson did back in 1987, one of my favorite albums in the world—because they don’t have control over interest rates.
I mean, they’re cutting rates, Cheryl, in an economy that’s growing jobs, growing overall as far as GDP, showing the stock market going up as we did at the end of the year. And now rates are just skyrocketing with the Fed cutting on the short end. Something else is happening here. I think it is an inflationary story, but then again, a day like today kind of puts that to rest. So we have to be careful here as we go forward because the market is not acting right.
CHERYL CASONE: A lot of news is coming out today as we are now in the final countdown mode, just days until the inauguration next Monday. One of the headlines here on The Wall Street Journal is that President-elect Trump plans on day one to sign dozens of executive orders. We know that, but this one is going to focus on fossil fuels—energy dominance, if you will—and also taking away a lot of the electric vehicle mandates that have been in place. Look, he ran on this during the election. We know this is coming. But I’m wondering if the energy sector continues to be a play for you as we move into the next administration.
SCOTT MARTIN: It does to some degree. It depends on how you play that. I think some of the integrated oils are great, like Exxon or Chevron, Cheryl. We’ve been playing a lot of the pipeline stocks and the pipeline ETFs that are out there, which have a higher yield than some of those integrated energies.
So if you’re looking at some places to go with energy, I would look at pipelines versus, say, maybe those individual stocks themselves or the ETFs that do that. An MLP is one that we use and have used for the yield and the appreciation. But Cheryl, you’re right—the executive orders are probably scaring the market, I think, a little bit because it’s a lot in a short period of time. It’s a lot to take in right away.
Some of those executive orders I agree with; maybe some might be a little bit tentative and a little bit too soon. But overall, there is a change here—a sea change, if you will—and the market needs to get used to that. And that’s, again, back to why the Fed is screwing around here: 50 basis points in September, 25 more in November, 25 more in December. Now what are they going to do?
Now we’re hearing, possibly, Cheryl, that they may actually raise rates this year because rates are going back up because inflation is a concern. The Fed has no idea what they’re doing. They’re not integrated with Donald Trump. And so there are things going on here that I think the market is trying to take in very, very quickly, and that’s where we’re seeing all the volatility.
CHERYL CASONE: Well, I think my point, though, in particular with the energy sector, is that you’re going to see likely pressure on Brent, WTI, and natural gas. He’s talking about restarting LNG exports to Western Europe, for example. All of those things would actually keep energy prices in check, and that’s the inflation story, which would be a good thing for the consumer. But you’re right, the Fed is going to have to make some difficult decisions, especially if we’re looking at only one rate cut.
The other thing is we’re getting all the banks tomorrow, and I’m looking at these estimates now for what we’re going to see: JP Morgan, Wells Fargo, Citigroup, Goldman, BlackRock, Bank of New York Mellon. That’s all tomorrow, along with December CPI. So we’re going to have two major news stories to wake up to. We’re going to have inflation on the consumer side, and then we’re going to have all these bank earnings. What are you expecting?
SCOTT MARTIN: Inflation should be right in line, so I don’t think that’s going to be a big deal. We saw that a little bit with PPI—a little bit softer than we saw today—but I think the Consumer Price Index could be maybe just a little bit online, maybe just slightly higher, but I don’t think that’ll scare the markets too much.
The financial earnings, though, Cheryl, to your point—with the yield curve steepening, with rates going back up—should be good for the financials. I remember back in the day, a couple of years ago and certainly a year ago, everybody was talking about how financials were doomed, especially the regional banks. They’ve been one of the best trades so far this year, and I think they’ll continue to be because banks are sound and they’re ready to roll.
The problem too, though, is if the Fed does get back involved here, does mingle with interest rates, God knows what that’s going to do to the banks. But at least as far as earnings go tomorrow as they start with financials, I think the kickoff is going to be pretty good.
CHERYL CASONE: You do? Okay. And real quick, healthcare and technology are under pressure today. A lot of our guests are coming on and saying that they’re waiting for those buying opportunities, in particular if it’s like Nvidia or Palantir. Are you in that boat right now?
SCOTT MARTIN: We are, and we still own a lot of those names, Cheryl. We’ve ridden them up, and we’ve taken off some profits along the way. I think these are long-term buying opportunities that you have to just wait for—kind of that capitulation of those big days where a Palantir, an Nvidia, a Microsoft, or a Google is down, say, five, six, seven percent or something like that in a couple of days. Those are the times to jump in because the reality is going forward with these stocks, they’re going to be good long-term holds.
CHERYL CASONE: Alright, Scott Martin, thank you so much, Scott. Appreciate it.
CHERYL CASONE: China is reportedly considering selling its TikTok U.S. operations to Elon Musk. Now, TikTok is calling the report “pure fiction.” I want to bring in Scott Martin back with us. On the Elon Musk side of this, Scott, remember how leveraged Elon Musk was—and I would argue still is—with his purchase of Twitter, which he turned into X. Maybe he could go out, but there are several competing groups that would like to purchase TikTok. ByteDance doesn’t seem to want to sell, but that ban is Sunday, the 19th.
SCOTT MARTIN: Bingo.
CHERYL CASONE: Yeah.
SCOTT MARTIN: Right around the corner, Cheryl. Yeah, so they need to do something quick. I mean, they may not be up for the deal, but they may have no choice. What’s interesting about this is the idea of “interesting bedfellows,” to your point, Cheryl. But Elon Musk, to his credit, did clean up Twitter—now X—so that was good. I think it turned into a much better machine than it was back then.
You have to figure that Elon Musk could have a positive impact on TikTok. Now, what that deal looks like, what the structure of it is—maybe he IPOs it at some point. Cheryl, there are all kinds of things that could happen with TikTok. Don’t forget, I wasn’t a big fan of TikTok to begin with. I thought the thing was going to fail. Oh gee—170 million Americans later, users on the platform—it’s doing pretty darn well.
So, there’s a good line of meeting here that could happen. And listen, otherwise, TikTok is going to be gonzo. They’re going to be banned in the USA like 2 Live Crew was back in 1990, and nobody’s going to hear boo about them after that. They are almost at a point where they don’t have a choice, and Musk may be their savior.
CHERYL CASONE: Well, the Supreme Court does not appear to be their savior. What I find interesting is a Chinese company trying to use the issue of the First Amendment and freedom of speech—when you’re a Chinese company—but I digress. Do you think this ban hits on Sunday? Because I’m not sure the Supreme Court is going to help them at this point.
SCOTT MARTIN: I agree. I used to doubt Elon Musk back in the day. He and I share the same birthday, so I should have known better than to do that—June 28th, by the way, if you’re playing at home. So, I think Musk could pull this off. But your point is well taken—they’re using our First Amendment to steal our information and use it against us later.
If that is not an abuse of power, an abuse of the amendments, I don’t know what is. But I think Elon Musk is the only one who can save this deal, and I think it’ll be something very, very, very late in the process that comes through. Maybe they get something done, and then what happens after that will be super interesting—as we’ve seen so far with Twitter, now X, and what he’s done there.
CHERYL CASONE: Alright, real quick. A lot of headlines have been coming out from Mark Zuckerberg regarding changes to his platform. We’ve got headlines today about job cuts in particular. Final comment on this—because these are publicly traded stocks that we do watch on this network.
SCOTT MARTIN: We do, and they disclose a lot of things nowadays, Cheryl. They have to play a good public figure; they have to put a good public face on. I’ll tell you what—I appreciate what some of these platforms and companies have done. They’re doing what’s called “playing ball,” and I think they’re doing the right thing overall for Americans.
I think it’s the right thing they should have done all along. But my goodness, if you look at Mark Zuckerberg these days, take a look at Zuck as he is today versus how he was a couple of years ago—or even a couple of years before that. I don’t even recognize the guy—in speech, in appearance, in everything—but he seems like a better man. It seems like he’s finally got his head on straight, and I think other companies are going to follow suit.
CHERYL CASONE: Well, Scott, to your point, there’s the issue of free speech and then there’s the issue of China. Those two things do not go together, to be clear.
SCOTT MARTIN: Not even close.
CHERYL CASONE: Yeah.
SCOTT MARTIN: Not even close. Nor do I want to share our beautiful amendments and our beautiful freedoms with what China can do to us. That’s something, too, that Donald Trump—thank goodness—is over in the White House very, very soon to take care of that stuff.
CHERYL CASONE: Agreed. Agreed. Alright, Scott, thank you so much. See you. We are going to have more.
