Kingsview CIO Scott Martin On Fox Business News – Cavuto Coast to Coast 11.7.24
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NEIL CAVUTO: I don’t know if you heard this, but the guy who runs 1-800-FLOWERS says we’re going to have a good Christmas after all. And he credits that to the election being resolved quickly and smoothly, without much fuss or craziness. He says that’s a positive sign for the economy and a cozy Christmas. Let’s bring in Scott Martin, CIO of Kingsview Asset Management. Scott, what do you think?
SCOTT MARTIN: Speaking of cozy, Neil, did you get the flowers I sent you? Maybe that’s what’s helping 1-800-FLOWERS’ stock! But seriously, 1-800-FLOWERS could use a boost this Christmas; they’ve had a rough few years. A quick resolution in the election is good for everyone, including businesses and those who believe in the democratic process. I think a lot of companies will say similar things, but truthfully, the economy was strong enough even without that quick resolution. So I expect 1-800-FLOWERS and others relying on a good holiday season to do well either way.
NEIL CAVUTO: So you’re saying you like what 1-800-FLOWERS is, well, “pedaling” here. Got it. But seriously, Scott, markets really hate uncertainty. The last thing they wanted was a prolonged election with unresolved results coming in from all over. Now, although we still don’t know the exact makeup of the House, it might end up Republican. How do you think this affects the market? Is the next big issue now the question of rate cuts? Most expect a quarter-point cut today, maybe another next month. What are you thinking?
SCOTT MARTIN: Honestly, I’m skeptical about these rate cuts, Neil. Look at September’s cut—50 basis points—and yet the 10-year note yield rose by about 40 or 50 basis points afterward. It didn’t work out well. I think the Fed should hold steady. Rate cuts aren’t the main concern here; it’s policy—trade, taxes, immigration. Trump has signaled he’ll reverse a lot of the current administration’s policies, and that’s why markets are responding optimistically. The pace and aggressiveness of those changes will impact things, but the promise of a shift is energizing markets.
NEIL CAVUTO: Right, these “animal spirits” in the markets have been let loose. But bond vigilantes are also reacting. With rates rising, we can’t have both happening for too long, can we?
SCOTT MARTIN: Exactly. Rising rates likely indicate a more inflationary environment, which actually means the Fed shouldn’t be cutting rates. It also signals a stronger economy. People have gotten so used to low rates that they’re a bit rattled. But higher bond rates mean bonds are paying something meaningful again, which hasn’t been the case in recent years. As long as rates don’t spike out of control, this could be a good balance, especially if the economy keeps strengthening.
NEIL CAVUTO: Alright, so it’s a mixed blessing. Thanks, Scott. Always great insights!
