Kingsview CIO Scott Martin On Fox Business Making Money with Charles Payne 6.20.2024
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CHARLES PAYNE: Alright folks, we have a Fox Business alert. My next guest says that the Magnificent Seven are overdone. Write that down, folks—overdone. I want to bring in now, from Kingsview Wealth Management, their Chief Investment Officer and also a Fox Business contributor, Scott Martin. Scott, sacrilege! What do you mean the Mag Seven are done? They’re just getting started, my man.
SCOTT MARTIN: First innings, batting practice. Listen, sorry to be the downer. It’s not that they’re overdone. It is that they’re overdone. I’ll admit it because it’s on every front page, every headline. My mom calls me about the Mag Seven, Charles, every couple of days. So that’s a problem in itself. Not that mom calls, but that it comes up so much because that’s when you know. Look in the past at other big bull markets, big runs in stocks—when everybody’s talking about them, when everybody’s behind them, that’s usually when the run is coming to an end. It doesn’t mean you have to sell them. I’m just not putting new money there, my friend, because I would wait for them to pull back before I jump in.
CHARLES PAYNE: See, you just hit the magic word. You still want to be a buyer. So I want to…
SCOTT MARTIN: Be cool.
CHARLES PAYNE: And I think that’s it. The irony, of course, is that the pullbacks are shallow and short-lived because everyone wants to buy them and they’re champing at the bit. You have passive investing pouring billions of dollars a day into the market, all earmarked to go into these same names. So why not just ride them until the wheels come off completely?
SCOTT MARTIN: Great point until they completely come off. Well, that’s no fun, but I’d ride that ride with you anytime, Charles. But I will tell you this: great point about the sentiment, though, because sentiment is something to watch very closely. Remember the last two Nvidia reports as far as quarterly earnings? This was the last one, the last kiss. The great story of Nvidia was coming to an end on one of these two earnings reports. But the market, or rather the stock itself, is up maybe another 10% since earnings. So the point is, watch sentiment, because sentiment will turn on these stocks enough to where maybe this show isn’t over. But that’s when you have to jump in, not when everybody’s talking about them like it’s all smoke and mirrors.
CHARLES PAYNE: What about the broader market? Are you looking for a pullback there?
SCOTT MARTIN: Yeah, a little bit. I think we’re going to get some summer doldrums here, Charles. You get some economic data that may be a little more inflationary, which continues to leave the Fed on pause, but that’s a good thing. I’m telling you, they’re not even going to cut rates at all this year. And I think the market needs to come to grips with that, but also be healthy.
CHARLES PAYNE: So this morning we have four economic data points, all were misses. Home starts, housing permits, the Philly Fed report was a disaster, and the initial job claims were higher. And yet what I think offsets that, to your point with the Fed, is that prices are going up. We saw that with the Philadelphia Fed report—prices paid ticking up, prices received ticking up. Isn’t it a mistake for the Fed, in your mind, to be too focused on these smaller price hikes when other parts of the economy are clearly slowing at a faster pace?
SCOTT MARTIN: Possibly. But that backs up their narrative and I think that’s good for them because open market interest rates, Charles, and say the 10-year bond note that you were talking about with Rebecca before—the 10-year bond of the US government, which does pay its bills, by the way. So I don’t think we’re going to get any default on debt or anybody not buying our debt, just as an aside. But Charles, the rates on the 10-year note are down to four and a quarter. We have it right there, yes, up a smidge today, but down from five a few months ago and even at five and a quarter some recent months ago. So the reality is that the Fed doesn’t necessarily need to cut because the open market rates are doing it for them.
CHARLES PAYNE: Let’s talk about some stock picks here. First, Tesla. You talked about buying some of these Mag Seven on the dip. I guess this has dipped enough for you?
SCOTT MARTIN: It’s a little dip and I think you have to keep dipping if it continues to dip because, Charles, the whole Elon Musk pay package, the delays in the Cybertruck, the RoboTaxi issues—they’ve all kind of been behind us now, or at least are baked into where the stock is at 180 or less. 170 would be a great spot to get in here. And we’ve ridden this one up and down in the past together, my friend.
CHARLES PAYNE: Home Depot, Workday—Workday is making a nice move here. I have some subscribers in it. I love Workday because of the management. The folks who put it together, Dave Duffield, he was with PeopleSoft, a great person. But what are the other reasons to own it?
SCOTT MARTIN: The fact that it got slammed after earnings on some earnings outlook and as well as just kind of the whole software service thing. They’re trying to figure out what the margins are going to look like in that space going forward. I think the market is, and so it’s one of those things where if you just take a look at the stock and look where it’s bounced in, say, pullbacks past, this would be a great spot to enter. And we have.
CHARLES PAYNE: And of course, Home Depot speaks for itself, right? I mean, you look up—I don’t care how bad it gets hit—you look up a few months later and it’s at an all-time high. It only has one competitor and is a pretty well-run company. Scott, thanks so much, my friend. Let’s talk again soon. See you.
